EXHIBIT 10.78 Page 1 of 10
CORPORATE EXECUTIVE EMPLOYMENT AGREEMENT
THIS CORPORATE EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is made as of
November 1, 2002, by and between ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("Executive"), and ABM
INDUSTRIES INCORPORATED ("Company") for itself and on behalf of its subsidiary
corporations as applicable herein.
WHEREAS, Company is 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, Company has 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, Executive wishes to, or has been and desires to remain employed by
Company, and to utilize such proprietary trade secrets, other confidential
business information and goodwill, and
WHEREAS, Company has disclosed or will disclose to Executive such proprietary
trade secrets and other confidential business information which Executive will
utilize in the performance of this Agreement;
NOW THEREFORE, Executive and Company agree as follows:
A. EMPLOYMENT: Company hereby agrees to employ Executive, and Executive
hereby accepts such employment, on the terms and conditions set forth
in this Agreement.
B. TITLE: Executive's title shall be Executive Vice President of Company
and President of the Company's janitorial services subsidiaries,
subject to modification as mutually agreed upon by both Company and
Executive.
C. DUTIES & RESPONSIBILITIES: Executive shall be expected to assume and
perform such executive or managerial duties and responsibilities as are
assigned from time-to-time by the Chief Executive Officer of the
Company, or his or her designee, to whom Executive shall report and be
accountable.
D. TERM OF AGREEMENT: Employment hereunder shall be deemed effective as of
November 1, 2002, for a term of one year ("Initial Term"), unless
sooner terminated pursuant to Paragraph O hereof, or later extended
pursuant to Paragraph N hereof ("Extended Term").
E. PRINCIPAL OFFICE: During the Initial Term and any Extended Term, as
applicable, of this Agreement, Executive shall be based at a Company
office located in San Francisco in the state of California ("State of
Employment"), or such other location as shall be mutually agreed upon
by Company and Executive.
F. COMPENSATION: Company 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:
1. SALARY: A salary paid in equal installments of no less
frequently than semi-monthly at the annual rate set forth in
Paragraph X.1 hereof ("Base Salary").
2. BONUS: A bonus or other incentive or contingent compensation,
if any, pursuant to Paragraph X.2. hereof.
3. FRINGE BENEFITS: Executive shall receive the then current
fringe benefits generally provided by Company to all of its
Executives. Such benefits may include but not be limited to
the use of a
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EXHIBIT 10.78 Page 2 of 10
Company-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 Company policy at all times. Executive
expressly agrees that should he or she terminate employment
with Company for the purpose of being re-employed by a Company
affiliate, he or she shall "carry-over" any accrued but unused
vacation balance to the books of the affiliate.
Company reserves the right to add, increase, reduce or
eliminate any fringe benefit at any time, but no such benefit
or benefits shall be reduced or eliminated as to Executive
unless generally reduced or eliminated as to comparable
executives within the Company.
4. LIMIT: To the extent that any compensation to be paid to
Executive under this Agreement would be non-deductible by the
Company as a result of the $1 million compensation limit
provisions of Section 162(m) of the Internal Revenue Code of
1986, as amended, (the "Code"), then such compensation shall
not be paid out to Executive at that time but shall instead be
deferred and paid without interest to Executive (subject to
applicable withholding and only to the extent that payment of
such deferred amount is fully deductible under Code Section
162(m)) in the first month of the taxable year following the
taxable year of the deferral. If the subsequent payment of the
deferral is itself subject to further deferral pursuant to
this Paragraph F.4, then such further deferred amount shall
instead be paid in the first month of the next following
taxable year.
G. PAYMENT OR REIMBURSEMENT OF BUSINESS EXPENSES: Company shall pay
directly or reimburse Executive for reasonable business expenses of
Company incurred by Executive in connection with Company business, and
approved in writing by the person(s) with the title set forth in
Paragraph C hereof, upon presentation to such person(s) by Executive
within sixty (60) days after incurring such expense of an itemized
request for payment including the date, nature, recipient, purpose and
amount of each such expense, accompanied by receipts for all such
expenses in excess of Twenty-Five Dollars ($25) each.
H. 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:
1. GOOD FAITH: Executive shall not act in any way contrary to the
best interest of Company.
2. BEST EFFORTS: During all full-time employment hereunder,
Executive shall devote full working time and attention to
Company, and shall not at any time be directly or indirectly
employed by, own, operate, assist or otherwise be involved,
invested or associated in any business that is similar or
competitive to any business of Company; except that Executive
may own up to five percent (5%) of any such publicly-held
business(es), provided that Executive: (a) shall give Company
notice(s) of such ownership in accordance with Paragraph W
hereof, and (b) shall not at any time be directly or
indirectly employed by or operate, assist, or otherwise be
involved or associated with any such business(es).
3. 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.
4. DRIVER'S LICENSE: Executive shall have and carry a valid
driver's license issued by his or her state of domicile or the
State of Employment hereunder and a driver's permit issued by
the Company whenever Executive is driving any motor vehicle in
connection with Company business. Executive agrees to
immediately notify Company in writing if Executive's driver's
license is lost, expired, restricted, suspended or revoked for
any reason whatsoever.
I. NO CONFLICT: Executive represents to Company 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 or she is not bound by
any other contracts or covenants
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EXHIBIT 10.78 Page 3 of 10
that in any way restrict or limit Executive's activities in relation to
his or her employment with Company that have not been fully disclosed
to Company prior to the signing of this Agreement.
J. COMPANY PROPERTY: Company 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 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 passwords and
documents are the property of Company, notwithstanding their
preparation, care, custody, control or possession by Executive at any
time(s) whatsoever.
K. GOODWILL & PROPRIETARY INFORMATION: In connection with Executive's
employment hereunder:
1. Executive agrees to utilize and further Company's goodwill
("Goodwill") among its customers, sales prospects and
employees, and acknowledges that Company may disclose to
Executive and Executive may disclose to Company, proprietary
trade secrets and other confidential information not in the
public domain ("Proprietary Information") including but not
limited to specific customer data such as: (a) the identity of
Company's customers and sales prospects, (b) the nature,
extent, frequency, methodology, cost, price and profit
associated with its services and products purchased from
Company, (c) any particular needs or preferences regarding its
service or supply requirements, (d) the names, office hours,
telephone numbers and street addresses of its purchasing
agents or other buyers, (e) its billing procedures, (f) its
credit limits and payment practices, and (g) its organization
structure.
2. Executive agrees that such Proprietary Information and
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. Company would not make such Proprietary Information and
Goodwill available to Executive unless Company is assured that
all such Proprietary Information and Goodwill will be held in
trust and confidence by Executive. Executive hereby
acknowledges that to use this Proprietary Information and
Goodwill except for the benefit of Company would be a breach
of such trust and confidence and in violation of Executive's
common law Duty of Loyalty to the Company.
L. RESTRICTIVE COVENANTS: In recognition of Paragraph K, above, Executive
hereby agrees that during the Initial Term and the Extended Term, if
any, of this Agreement, and thereafter as specifically agreed herein:
1. Except in the proper performance of this Agreement, Executive
shall at no time directly or indirectly solicit or otherwise
encourage or arrange for any employee to terminate employment
with Company.
2. 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.
3. 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 of Company, or by any other
unfair or unlawful business practice.
4. Executive agrees that for a reasonable time after the
termination of this Agreement, which Executive and Company
hereby agree to be one (1) year, Executive shall not directly
or indirectly, for Executive or for any other person or
business, seek, solicit, divert, take away, obtain or accept
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EXHIBIT 10.78 Page 4 of 10
any customer account or sales prospect with which Executive
had direct business involvement on behalf of Company within
the one (1) year period prior to termination of this
Agreement.
5. 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.
M. MODIFICATION OF EMPLOYMENT: At any time during the then current Initial
or Extended Term, as applicable, of this Agreement, a majority of the
Board of Directors of Company shall have the absolute right, with or
without cause and without terminating this Agreement or Executive's
employment hereunder, to modify the nature of Executive's employment
for the remainder of the then current Initial or Extended Term, as
applicable, of this Agreement, from that of a full-time employee to
that of a part-time employee ("Modification Period"). The Modification
Period shall commence immediately upon Company giving Executive written
notice of such change.
1. Upon commencement of the Modification Period: (a) Executive
shall immediately resign as a full-time employee of Company
and as an officer and/or director of Company, as applicable,
(b) 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 J hereof, and (c) Company shall pay
Executive all previously earned and vested but as yet unpaid,
salary, prorated bonus or other contingent compensation,
reimbursement of business expenses and fringe benefits.
2. During the Modification Period: (a) Company shall continue to
pay Executive's monthly salary pursuant to Paragraph F.1
hereof, and to the extent available under the Company's group
insurance policies, continue to provide Executive with the
same group health and life insurance (subject to Executive
continuing to pay the employee portion of any such premium) to
which Executive would be entitled as a full-time employee,
with the understanding and agreement that such monthly salary
and group insurance, if available, shall constitute the full
extent of Company's obligation to compensate Executive, (b)
Executive shall not be eligible or entitled to receive or
participate in any bonus or fringe benefits other than the
aforementioned group insurance, if available, (c) in the
alternative, Executive may exercise rights under COBRA to
obtain medical insurance coverage as may be available to
Executive, (d) Executive shall be deemed a part-time employee
and not a full-time employee of Company, (e) Executive shall
provide Company with such occasional executive or managerial
services as reasonably requested by the person(s) with the
title set forth in Paragraph C hereof, except that failure to
render such services by reason of any physical or mental
illness or disability other than Total Disability or death as
set forth in Paragraph O.2 hereof, or unavailability because
of absence from the State of Employment hereunder, shall not
affect Executive's right to receive such salary and (f)
Company shall pay directly or reimburse Executive in
accordance with the provisions of Paragraph G hereof for
reasonable business expenses of Company incurred by Executive
in connection with such services requested by the person(s)
with the title set forth in Paragraph C hereof.
3. The Modification Period shall continue until the earlier of:
(a) Total Disability or death as set forth in Paragraph O.2
hereof, (b) termination of this Agreement by Company for "just
cause" as hereinafter defined, (c) Executive accepting
employment or receiving any other compensation from operating,
assisting or otherwise being involved, invested 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 (d) expiration of the then
current Term of this Agreement.
N. EXTENSION OF EMPLOYMENT:
1. Absent at least ninety (90) days written Notice of Termination
of Employment or Notice of Non-Renewal from Company 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
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EXHIBIT 10.78 Page 5 of 10
Term (or another Extended Term, as applicable) of one year, by
which Executive and Company intend that all terms and
conditions of this Agreement shall remain in full force and
effect for another twelve (12) months, except that the highest
base salary specified in Paragraph X.1.a shall be increased
annually as set forth in Paragraph X.1.b for each year of the
Extended Term.
2. In the event that Notice of Non-Renewal is given ninety (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. In such event, Company shall
have the right to change the terms and conditions of
Executive's employment, including but not limited to
Executive's position and/or compensation.
O. TERMINATION OF EMPLOYMENT:
1. a. Subject to at least ninety (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. Company has the option, without
terminating this Agreement, of placing Executive on a
leave of absence at the full compensation set forth
in Paragraph F hereof, for any or all of such notice
period.
b. Except as provided in Paragraph O.1.a, the Company
shall have the right to 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
Directors of Company of "just cause." "Just cause"
includes but is not limited to any (i) theft or other
dishonesty, (ii) neglect of or failure to perform
employment duties, (iii) inability or unwillingness
to perform employment duties, (iv) insubordination,
(v) abuse of alcohol or other drugs or substances,
(vi) breach of this Agreement; (vii) other
misconduct, unethical or unlawful activity, or for
(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.
c. At any time during the then current Initial or
Extended Term, as applicable, of this Agreement, with
or without cause, Executive may terminate employment
hereunder by giving Company ninety (90) days prior
written notice.
2. Employment hereunder shall automatically terminate upon the
total disability ("Total Disability") or death of Executive.
Total Disability shall be deemed to occur on the ninetieth
(90th) consecutive or non-consecutive calendar day within any
twelve (12) month period that Executive is unable to perform
the duties set forth in Paragraph C hereof because of any
physical or mental illness or disability. Company shall pay
when due to Executive or, upon death, Executive's designated
beneficiary or estate, as applicable, all prorated salary,
bonus or 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.
3. Upon termination of employment hereunder, Executive shall
immediately resign as an employee of Company and as an officer
and/or director of Company, 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 J hereof. Company shall pay
Executive, when due, all previously earned and vested but as
yet unpaid, salary, bonus or other contingent compensation,
reimbursement of business expenses and fringe benefits.
P. GOVERNING LAW: This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Employment hereunder.
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EXHIBIT 10.78 Page 6 of 10
Q. ARBITRATION CLAUSE:
1. Except for the interpretation and enforcement of injunctive
relief pursuant to Paragraph R hereof (which shall be subject
to litigation in any court having proper jurisdiction), any
claim or dispute related to or arising from this Agreement
(whether based in contract 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 a neutral arbitrator agreed upon by both
parties, through mandatory, final, binding arbitration in
accordance with the procedural and discovery rules of the
American Arbitration Association.
2. The cost of such arbitration shall be borne by the Company.
Any such arbitration must be requested in writing within one
(1) 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. Any such
arbitration (or court proceeding as applicable hereunder)
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.
R. REMEDIES & DAMAGES:
1. The parties agree that, in the event of a material breach or
threatened material breach of Paragraphs K and/or L hereof,
the damage or imminent damage to the value of Company's
business shall be impractical and/or impossible to estimate or
ascertain, and therefore any remedy at law or in damages shall
be inadequate. Accordingly, the parties hereto agree that
Company shall be entitled to the immediate issuance of a
restraining order or an injunction against Executive in the
event of such breach or threatened breach, in addition to any
other relief available to Company pursuant to this Agreement
or under law.
2. Executive agrees that the actual amount of damages resulting
from any material breach of any of the provisions of
Paragraphs K and/or L hereof would be impractical or
impossible to estimate or ascertain. It is therefore agreed
that the damages resulting from any such breach which involves
any customer of Company shall be liquidated damages, not a
penalty, in an amount equal to four (4) times the lost monthly
revenue to the Company based on the average monthly revenue
which was payable by that customer to Company during the four
(4) months immediately preceding such breach. This provision
for liquidated damages is in addition to any other relief
available to Company pursuant to this Agreement or under law.
3. To the full extent permitted under the laws of the State of
Employment hereunder, Executive authorizes Company to withhold
from Executive's compensation and from any other funds held
for Executive's benefit by Company, any damages or losses
sustained by Company as a result of any material breach or
other material violation of this Agreement by Executive,
pending arbitration between the parties as provided for
herein.
S. 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.
T. 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 to consider
such provision void.
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U. 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 Restrictive Covenants and
Arbitration Clause herein, shall remain in full force and effect after
the termination of this Agreement.
V. CONSTRUCTION: This Agreement was negotiated in good faith by the
parties hereto, who hereby agree to share the responsibility for any
ambiguities, uncertainties or inconsistencies herein. Paragraph
headings are used herein only for ease of reference, and shall not in
any way affect the interpretation or enforcement of this Agreement.
W. NOTICES:
1. 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: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
COMPANY: ABM INDUSTRIES INCORPORATED
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President & CEO
COPY: ABM INDUSTRIES INCORPORATED
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Employment Counsel
2. Any such Notice shall be assumed to have been received when
delivered in person, or forty-eight (48) hours after being
sent in the manner specified above.
X. SPECIAL PROVISIONS:
1. SALARY:
a. Four Hundred Twenty Two Thousand, Four Hundred
Fifteen Dollars ($422,415) per year effective
November 1, 2002 through October 31, 2003 at the
monthly rate of $35,201.25 payable semi-monthly.
b. For any Extended Term hereafter, the Salary in
Paragraph X.1.a. will be adjusted upward to reflect
the percentage increase change in the WorldatWork
(TM)/(formerly, the American Compensation
Association) Total Salary Increase Budget Survey for
the Western Region ("ACA Index") with a six percent
(6%) maximum increase. The adjustment, if any, shall
be based upon the projected ACA Index as published
for the current year, immediately preceding the
effective date of the proposed increase hereunder.
Notwithstanding the foregoing, there shall be no
annual increase in Salary for such year unless the
Company's net earnings per share ("EPS"), excluding
WTC Related Gain (as defined below) for the fiscal
year of the Company, commencing November 1 and ending
October 31 ("Fiscal Year"), then ending are equal to
or greater than the Company's EPS for the previous
Fiscal Year.
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2. BONUS: Subject to proration in the event of modification or
termination of employment hereunder and further subject to the
potential prospective re-set provisions set forth in
Subparagraph c, below ("Reset"), Executive shall be paid a
bonus ("Bonus") based on the profit ("Profit") for each Fiscal
Year, or partial Fiscal Year, of employment hereunder during
the Initial Term, and during the Extended Term, if any, of
this Agreement, as follows:
a. Subject to the maximum bonus payable under
subparagraph c., such Bonus for each Fiscal Year
shall be 0.23747% of the Company's Profit on a
pro-rata basis.
b. Profit for purposes of determining such Bonus, shall
be defined as the consolidated income (in accordance
with generally accepted accounting principles) before
income taxes of the Company, excluding: (i) gains or
losses on sales or exchanges of real property or on
sales or exchanges of all or substantially all of the
stock or assets of a subsidiary corporation or any
other business unit of Company, (ii) gains or losses
on the discontinuation of any business unit of
Company, and (iii) WTC Related Gain. At any time the
Board of Directors of the Company (the "Board")
reserves the right to further adjust Profit for
purposes of determining a Bonus in the event of a
Significant Transaction (as defined below) during a
Fiscal Year and/or for any unanticipated and material
events that are beyond the control of the Company,
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, and/or the New York Stock Exchange or for
any other reason which the Board determines, in good
faith, to be appropriate.
Notwithstanding the foregoing, Profit for purposes of
determining the Bonus in any Fiscal Year during the
Initial or Extended Term of this Agreement, shall
include WTC Related Gain and WTC Related Carry-Over
Gain in an aggregate amount not to exceed a maximum
of $10 million per Fiscal Year. For purposes of this
Agreement, the term "WTC Related Gain" shall mean the
total amount of all items of income included in the
Company's audited consolidated financial statements
for any Fiscal Year that result from the Company's
receipt of insurance proceeds or other compensation
or damages due to the Company's loss of property,
business or profits as a result of the destruction of
the World Trade Center on September 11, 2001. Also,
for purposes of this Agreement, the term "WTC Related
Carry-Over Gain" shall mean the aggregate amount of
WTC Related Gain not previously taken into account in
determining a Bonus for a prior Fiscal Year. Finally,
for purposes of this Agreement, the term "Significant
Transaction" shall mean the Company's acquisition or
disposition of a business or assets which the Company
is required to report under Item 2 of the SEC Form
8-K.
c. Subject to proration in the event of modification or
termination of employment under this Agreement, and
further subject to a Reset in the event Executive's
Bonus for Fiscal Year 2002 has been limited as
hereinafter provided, Executive's maximum Bonus for
each Fiscal Year shall be fifty percent (50%) of the
Base Salary for that year set forth in this
Agreement. If, however, in Fiscal Year 2002 the Bonus
which might have been earned by Executive for that
year exceeds said fifty percent (50%) maximum,
Executive's Base Salary and Bonus percentage for
Fiscal Year 2003 shall be Reset as follows: (i)
notwithstanding the six percent (6%) maximum set
forth in paragraph X.1.b. of the Agreement, the
Executive's Salary shall be adjusted to equal
seventy-five percent (75%) of the prior Fiscal Year's
combined Salary and Bonus, plus an amount equal to
the increase, if any, set forth in Paragraph X.1.b of
the Agreement based upon said ACA Index; and (ii) the
Bonus percentage set forth in Subparagraph a (above)
shall be adjusted by multiplying the prior Fiscal
Year's combined Salary and Bonus by twenty-five
percent (25%), and dividing that product by the
actual Profit earned in the prior Fiscal Year.
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EXHIBIT 10.78 Page 9 of 10
d. The Chief Financial Officer of the Company shall
calculate the Profit and Bonus for purposes of this
Agreement. Company shall pay Executive the Bonus for
the Fiscal Year following completion of the audit of
the Company's financial statements, but no later than
seventy-five (75) days after the end of each Fiscal
Year. The Company in its sole discretion may pay any
Bonus earlier. The Bonus for any partial Fiscal Year
shall be prorated for the fraction of the Fiscal Year
for which such Bonus is payable. Absent bad faith or
material error, any calculations of the Chief
Financial Officer and any conclusions of the Board,
with respect to the amounts of the Profit or Bonus,
shall be final and binding upon Executive and
Company.
e. Notwithstanding the foregoing, no Bonus for any
Fiscal Year of the Company shall be payable unless
the Company's EPS for the Fiscal Year then ending is
equal to or greater than eighty percent (80%) of the
Company's EPS for the previous Fiscal Year of the
Company, in each case excluding any WTC Related Gain.
f. Nothing contained in this Agreement shall entitle
Executive to receive a bonus or other incentive or
contingent compensation from Company based on any
sales or profits made (including but not limited to
any WTC Related Gain or WTC Related Carry-Over Gain
realized) by Company after termination of the Initial
or Extended Term of this Agreement or of employment
hereunder.
g. Notwithstanding any other provision hereof, the Board
may, prior to the beginning of any Fiscal Year,
approve and notify the Executive of a modification to
the Bonus percentage determined hereunder (either
higher or lower), based on such performance and
financial measures and other factors as the Board
shall determine in its sole discretion. The Board's
decision in this regard shall be deemed final and
binding on Executive regardless of the amount of
Bonus otherwise calculated pursuant to the foregoing
provisions. In addition, the Board reserves the
option at any time to grant a discretionary incentive
bonus, which shall not be subject to the maximum
Bonus or Reset provisions described in paragraph
X.2.c. above.
h. Executive herein acknowledges receipt of Bonus for
Fiscal Year 2001 and agrees that he or she is not
entitled to any further bonus for that year, for any
reason whatsoever.
3. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN ("SERP") Following
Executive's retirement, resignation and/or termination from
employment with Company (but commencing no earlier than what
is or would have been Executive's sixty-fifth (65th) birthday
and concluding no later than ten (10) years thereafter),
Company shall pay to Executive: 120 equal monthly installments
each of 1/120th of the Supplemental Benefit accrued, pursuant
to the terms of the Plan Document, provided herewith.
Y. SCOPE OF CERTAIN PROVISIONS: All references to Company in Paragraphs H,
J, K, L, O.3 and R in this Agreement shall include Company, and its
subsidiary corporations and other Company affiliates.
Z. ENTIRE AGREEMENT: Unless otherwise specified herein, this Agreement
sets forth every contract, understanding and arrangement as to the
employment relationship between Executive and Company, and may only be
changed by a written amendment signed by both Executive and Company.
1. 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.
2. It is specifically understood and accepted that this Agreement
supersedes all oral and written employment agreements between
Executive and Company prior to the date hereof, as well as all
conflicting provisions of Company's Guidelines for Corporate
Approval and its Human Resources
INITIALS: EXECUTIVE /s/JPMcC COMPANY /s/DMD
EXHIBIT 10.78 Page 10 of 10
Manual, including but not limited to the termination,
discipline and discharge provisions contained therein.
3. This Agreement may not be amended except in a writing signed
by the Executive and two (2) officers of the Company, and
approved by the Company's Board of Directors.
FULL KNOWLEDGE & UNDERSTANDING: Executive and Company hereby acknowledge that
they have carefully read and fully understand all terms and conditions of this
Agreement, that they have been given an opportunity to review all aspects of
this Agreement with an attorney if they so choose, and that they are voluntarily
entering into this Agreement with full knowledge of the benefits and burdens,
and the risks and rewards, contained herein.
IN WITNESS WHEREOF, Executive and two (2) officers of the Company have executed
this Agreement as of the date set forth above:
EXECUTIVE: Signature: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Date: 2/20/03
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COMPANY: ABM INDUSTRIES INCORPORATED
Date: 3/4/03
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Signature: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Title: President and Chief Executive Officer
Signature: /s/ ▇▇▇▇▇ ▇. Dell
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Title: Senior Vice President of Human Resources
and Chief Employment Counsel
INITIALS: EXECUTIVE /s/JPMcC COMPANY /s/DMD