EXHIBIT 10.32 FIRST AND SECOND AMENDMENT OF CORPORATE EXECUTIVE
EMPLOYMENT AGREEMENT WITH JOHN F. EGAN
November 1, 1993
Mr. John F. Egan
American Building Maintenance Industries, Inc.
50 Fremont Street
San Francisco CA 94105
RE: AMENDMENT OF EMPLOYMENT AGREEMENT
Dear Jack:
This letter of amendment ("Letter") is being sent as a follow up to the letter
sent to you by Sydney J. Rosenberg wherein you were given formal notice that
your Corporate Executive Employment Agreement dated as of November 1, 1991
("Agreement") would not be automatically renewed.
As you are aware, Sydney's letter was sent to you upon the authority of ABM's
Board of Directors and its Executive Compensation Committee, which is in the
process, with the assistance of its compensation consultants, of re-evaluating
the Company's program for compensating its senior corporate executives in light
of: (1) changes which have been made in the manner in which public companies
must report executive compensation to their stockholders and (2) increased
emphasis being placed upon financial performance as a determining factor in
setting executive compensation.
Because of the complexities of this examination, the Board of Directors has
authorized the Company to extend your Agreement on the identical terms and
conditions for the period of November 1, 1993 through October 31, 1994 at the
annual salary in effect on October 31, 1993, as set forth in Paragraph X.1 of
the Agreement plus an increase of five (5%) per cent.
All other terms and conditions of your Agreement will remain unchanged with the
following exceptions:
Mr. John F. Egan
November 1, 1993
Page Two
(A) PARAGRAPH X.2 (a) BONUS shall be rewritten to read as follows:
SUCH BONUS FOR EACH FISCAL YEAR COMMENCING NOVEMBER 1, 1992 SHALL BE
.3132 PER CENT OF THE PROFIT OF THE JANITORIAL DIVISION OF THE COMPANY
PLUS 1.25% PER CENT OF THE PROFIT OF THE JANITORIAL SUPPLY DIVISION OF
THE COMPANY
(B) The first phrase of PARAGRAPH X.2(b) SPECIAL PROVISIONS: BONUS shall
be rewritten to read:
PROFIT IS DEFINED AS THE CONSOLIDATED INCOME BEFORE TAXES OF THE
JANITORIAL DIVISION AND THE JANITORIAL SUPPLY DIVISION OF COMPANY,
EXCLUDING...
(C) PARAGRAPHS X.2(b)(5) AND (7) SPECIAL PROVISIONS: BONUS shall be
rewritten to read as follows (Note: Paragraphs X.2(b) (1), (2), (3),
(4) and (6) remain unchanged):
(5) THE PRIOR-YEAR PORTION OF ANY YEAR-END INSURANCE RESERVE
ADJUSTMENTS,
(7) THE DISCRETIONARY PORTION OF ANY COMPANY CONTRIBUTION MADE TO ANY
PROFIT
Please note that the changes set forth in Paragraphs A & B above are
retroactive to November 1, 1992 while the changes to Paragraph C are retroactive
to November 1, 1991.
Please sign and date all three (3) originals of this Letter and return two
(2) of them to me. If you have any questions, please do not hesitate to call.
Very truly yours,
W. W. Steele
WWS/dar
Enclosures
I hereby agree to the foregoing amendments of the Agreement.
Dated: , 1993
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November 14, 1994
Mr. John F. Egan
ABM Industries Incorporated
50 Fremont Street
San Francisco CA 94105
RE: SECOND AMENDMENT OF CORPORATE EXECUTIVE EMPLOYMENT AGREEMENT
Dear Jack:
As you are aware, your Corporate Executive Employment Agreement ("Agreement") in
effect for the fiscal year ending October 31, 1994 did not automatically renew
pending further action by the Company's Executive Compensation Committee
("Committee") and Board of Directors. On October 25, 1994 the Board of
Directors accepted the recommendations of the Committee, and it is the purpose
of this letter to amend that Agreement effective November 1, 1994 in accordance
with the Committee's recommendations as follows:
The name of the Company as set forth in the first paragraph of the Agreement
shall be amended to: ABM Industries Incorporated.
PARAGRAPH N. EXTENSION OF EMPLOYMENT shall be amended (except for its last
sentence which shall remain unchanged) to read: "Absent at least ninety (90)
days written notice of termination from either party to the other party prior to
the expiration of the Initial Term or any Extended Term of the Agreement,
employment hereunder shall continue for an Extended Term of two years ("Extended
Term") by which Executive and Company mean that all terms and conditions of this
Agreement during the Extended Term shall remain in full force and effect except
that the highest base Salary specified in Paragraph X1 shall be increased
annually as provided in Paragraph X.1(b) each year during the Extended Term.
PARAGRAPH X.1 SALARY shall be amended in its entirety to read:
"(a) Three Hundred Fourteen Thousand Four Hundred Eight Dollars
($314,408.00) from 11/1/94 through 10/31/95.
(b) Effective 11/1/95 through 10/31/96, and for each year of an Extended
Term of this Agreement, if any, the Salary in Paragraph X.1(a) will be
adjusted upward annually to reflect the percentage increase change in
the American Compensation Association
Mr. John F. Egan
November 14, 1994
Page Two
("ACA") Index for the Western Region ("ACA Index") with a six per
cent (6%) maximum increase. The adjustment, if any, shall be based
upon the projected ACA Index as published for the ACA fiscal year
ending on the June 30th immediately preceding the effective date of
the proposed increase hereunder. Notwithstanding the foregoing, there
shall be no annual increase in Salary for any such year unless the
Company's earnings per share ("EPS") 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 of the Company. There shall be no downward
adjustment in salary in the event the ACA Index shows a decrease from
the prior Fiscal Year.
For example: for the Company's Fiscal Year commencing November 1,
1995, there would be no Salary increase unless the Company's EPS for
the Fiscal Year of the Company ending October 31, 1995 equaled or
exceeded the Company's EPS for Fiscal Year of the Company ending
October 31, 1994;
PARAGRAPH X.2 BONUS Subparagraphs (a) and (c) through (e) remain unchanged;
Introduction, and sub-paragraphs (x), (b) and (f) shall be amended to read:
"Subject to the provisions of Paragraph X.2(f) and further subject to proration
in the event of modification or termination of employment hereunder, Executive
shall be paid a bonus ("Bonus") based on the profit ("Profit") for each Fiscal
Year or partial Fiscal Year of the Company of employment hereunder during the
Initial Term and during the Extended Term, if any, of this Agreement.
(b) Profit is defined as the consolidated income before income taxes of
the Janitorial Division and the Janitorial Supply Division of Company,
excluding: (1) 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, (2) gains or losses on the discontinuation of any business
unit of Company (3) the discretionary portion of any contributions
made to any profit sharing, service award or similar plans and (4) any
so-called corporate charges imposed by the Company as a percentage of
sales.
(f) Notwithstanding the foregoing, no Bonus for any Fiscal Year of the
Company shall be payable: (i) unless the Company's EPS for the Fiscal
Year then ending is equal to or greater than 80% of the Company's EPS
for the previous Fiscal Year of the Company and (ii) in no event
unless the Company's EPS for any Fiscal Year of the Company is equal
to or greater than 80% of the Company's EPS for Fiscal Year ending
October 31, 1994.
For example: for the Company's Fiscal Year ending October 31,1996
there would be no Bonus payable unless: (x) the Company's EPS equals
or exceeds 80% of the Company's EPS for the Company's Fiscal Year
ending October 31, 1995; and (y) the Company's EPS for the Fiscal Year
ending October 31, 1996 equals or exceeds 80% of the Company's EPS for
the Fiscal Year of the Company ending October 31, 1994.
Mr. John F. Egan
November 14, 1994
Page Three
PARAGRAPH X.4 CONSULTANCY shall be amended (except for subparagraph (a) and (b)
which remain unchanged) to read: Upon Executive's retirement from employment
with the Company, but commencing no earlier than Executive's sixty-fifth (65th)
birthday, Company shall pay to Executive consulting fees ("Consulting Fees")
equal to the sum of (i) $471,428.56 plus (ii) $42,857.14 times the number of
years of Executive's full-time employment commencing November 1, 1994.
Consulting Fees shall be payable in equal monthly installments determined by
dividing the sum of (i) plus (ii) by 120 months ("Consultancy").
In all other respects the Agreement, as previously amended, shall remain
unchanged.
Please sign all three (3) copies of this letter and return two (2) copies to
Harry Kahn, Vice President and General Counsel, at the ABM Legal Department.
Salary and Bonus increases will not be processed until both signed copies are
received by Harry Kahn.
Sincerely,
William W. Steele
WWS/dar
Encl.
I agree to the foregoing.
Date:
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