EXHIBIT 10.69
AGREEMENT
THIS AGREEMENT ("Agreement"), is made between Harry H. Kahn ("Executive")
and ABM Industries Incorporated ("ABM") for itself and on behalf of its
subsidiary corporations, and shall become effective upon the Effective Date set
forth in Section 22.
RECITALS
WHEREAS, Executive is a full-time employee and officer currently employed
by ABM.
WHEREAS, ABM recognizes Executive's many contributions to ABM and desires
to enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
representations set forth below and other good and valuable consideration, the
parties agree as follows:
1. Resignation and Retirement; Title.
(a) From the Effective Date through the Date of Resignation and
Retirement (as defined below), Executive will continue to serve as Senior Vice
President and General Counsel of ABM.
(b) Executive agrees to resign and retire as a full-time employee and
officer of ABM. Such resignation and retirement shall become effective, without
further action by Executive, on a date to be determined by notice in writing
from ABM's Chairman of the Board and Chief Administrative Officer ("CAO") to
Executive ("Date of Resignation and Retirement"), but in no event shall the
Date of Resignation and Retirement occur later than October 31, 2002. Executive
agrees that on or before the Date of Resignation and Retirement, he shall turn
over to ABM all Company confidential files, records, and other documents. In
addition, Executive shall return all property in his possession owned by ABM,
including any motor vehicles, equipment or supplies.
(c) Executive may voluntarily terminate his employment with ABM as
Senior Vice President and General Counsel only upon thirty days' prior written
notice to ABM.
2. On-Call Employment.
(a) From the Date of Resignation and Retirement through December 31,
2004, Executive shall be retained by ABM as an on-call employee with the title
"Of Counsel." As Of Counsel, Executive shall provide ABM with such occasional
executive or managerial services as reasonably requested by ABM's CAO or
President and Chief Executive
Officer ("CEO"), including providing assistance in connection with the
transition to a new General Counsel.
(b) Executive agrees that from the Date of Resignation and
Retirement through December 31, 2004, he shall make every effort to be
reasonably available to provide the services outlined in this Section 2, except
that failure to render such services by reason of any physical or mental
illness or disability, or unavailability because of absence from the State of
California, shall not affect Executive's right to receive the compensation set
forth in Section 3.
3. Payment of Good and Valuable Consideration. In consideration of
Executive's acceptance of this Agreement and the release contained herein, ABM
will provide the following:
(a) From the Effective Date through October 31, 2003, Executive
shall be paid a salary ("Salary") of Two Hundred Seventy Eight Thousand Six
Hundred Twenty Five Dollars ($278,625) per year, at the monthly rate of $23,219
payable semi-monthly.
(b) Executive Shall be paid a bonus ("Bonus") based on the profit
("Profit") for the fiscal year ending October 31, 2002 and the fiscal year
ending October 31, 2003, as follows:
(i) Such Bonus for each such fiscal year shall be 0.1399% of
ABM's Profit on a pro-rata basis.
(ii) 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 ABM, excluding: (1) gains or
losses on sales or exchanges 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 ABM, (2) gains or losses on the discontinuation of any
business unit of ABM, (3) the discretionary portion of any contributions made to
any profit sharing, employee retirement savings or similar plan and (4) WTC
Related Gain. At any time, ABM's Board of Directors ("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 ABM,
including 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 ("SEC"), and/or the New York Stock Exchange.
In addition Profit shall be subject to such other adjustments as are made to the
"Profit" used in calculating bonuses generally for the other Senior Vice
Presidents of ABM.
(iii) Notwithstanding the foregoing, Profit for purposes of
determining the Bonus in any such fiscal year shall include WTC Related Gain
and WTC Related Carry-Over Gain in an aggregate amount not to exceed a maximum
of $10 million. For purposes of this Agreement, the term "WTC Related Gain"
shall mean 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
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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. Lastly, for purposes of this Agreement, the term
"Significant Transaction" shall mean ABM's acquisition or disposition of a
business or assets which ABM is required to report under Item 2 of SEC Form 8-K.
(iv) The Chief Financial Officer for ABM shall calculate the
Profit and Bonus for purposes of this Agreement. ABM shall pay Executive the
Bonus for the fiscal year following completion of the audit of ABM's financial
statements, but no later than seventy-five (75) days after the end of such
fiscal year. ABM 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
conclusions of the Board with respect to the amounts of the Profit or Bonus
shall be final and binding upon Executive and ABM.
(v) Notwithstanding the foregoing and unless generally waived as
to all Senior Vice Presidents of ABM, no Bonus for any fiscal year of ABM shall
be payable unless ABM's EPS for the fiscal year then ending is equal to or
greater than eighty percent (80%) of ABM's EPS for the previous fiscal year of
ABM.
(vi) Executive acknowledges receipt of a Bonus for the fiscal
year ended October 31, 2001, and agrees that he is not entitled to any further
bonus for that fiscal year for any reason whatsoever.
(c) From the Effective Date through October 31, 2003, Executive shall
receive the then current fringe benefits generally provided by ABM to all of its
full-time employees who are Senior Vice Presidents; provided, that (i) Executive
shall not receive any additional stock option grants, and (ii) Executive shall
not be entitled to receive or participate in any additional retirement benefit
other than as described in Paragraph X.3. of the Corporate Executive Employment
Agreement, dated as of November 1, 1999, between Executive and ABM. Such fringe
benefits may include a 401(k) employee savings plan, deferred compensation plan,
employee stock purchase plan, 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. ABM
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 all Senior Vice
Presidents of ABM.
(d) From November 1, 2003 through December 31, 2004, ABM shall
continue to pay Executive's monthly Salary pursuant to Section 3(a). Such salary
shall be subject to a right of offset, dollar for dollar, as against any
compensation received by Executive from employment (including on an independent
contractor basis) or self-employment in exchange for services performed by
Executive during the period from November 1, 2003 through December 31, 2004.
From November 1, 2003 through December 31, 2004 ABM shall continue to provide
Executive with the same group health and life insurance (subject to Executive
continuing to pay the employee portion of the premiums due thereunder) and
employee stock
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purchase plan to which Executive would be entitled as a full-time employee,
with the understanding and agreement by Executive that such monthly salary,
group insurance and employee stock purchase plan shall constitute the full
extent of ABM's obligation to compensate Executive. Executive shall not be
eligible or entitled to receive or participate in any bonus or fringe benefits
other than the aforementioned group insurance and employee stock purchase plan.
(e) From the Effective Date through December 31, 2004, ABM shall pay
directly or reimburse Executive for reasonable business expenses of ABM incurred
by Executive in connection with ABM business and approved in writing by the CAO,
upon presentation to such person by Executive within sixty (60) days after
incurring such expense or 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.
(f) Any tax obligations of Executive and tax liability therefore,
including any penalties and interest based upon such tax obligation, that arise
from the benefits and payments made to him under this Agreement shall be
Executive's responsibility and liability. ABM will report each payment provided
for in this Section 3 on form W-2 for the tax year to which the payment was
made.
4. No Other Benefits; No Admission of Liability. Executive acknowledges
that except for any vested or vesting benefits and except as specifically set
forth in Section 3, Executive shall not be entitled to any other compensation or
benefits after the Effective Date. It is understood and agreed that the
furnishing of the consideration for this Agreement shall not be deemed or
construed at any time or for any purpose as an admission of liability by ABM or
Executive.
5. Business Conduct. While employed by ABM (in either a full-time or on
call capacity), 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 ABM,
including the following:
(a) GOOD FAITH: Executive shall not act in any way contrary to the
best interest of ABM.
(b) BEST EFFORTS: Prior to the Date of Resignation and Retirement,
Executive shall devote full working time and attention to ABM, and shall not at
any time from the Effective Time through December 31, 2004 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
ABM; except that Executive may own up to five percent (5%) of any such
publicly-held business(es), provided that Executive (x) shall give ABM notice(s)
of such ownership in accordance with Section 23 hereof, and (y) 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).
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(c) VERACITY: Executive shall make no claims or promises to any
employee, supplier, contractor, customer or sales prospect of Company that are
unauthorized by ABM or are in any way untrue.
(d) 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
California and a driver's permit issued by ABM whenever Executive is driving
any motor vehicle in connection with Company business. Executive agrees to
immediately notify ABM in writing if Executive's driver's license is lost,
expired, restricted, suspended or revoked for any reason whatsoever.
6. Indemnification Against Claims. ABM agrees to indemnify and hold
Executive harmless from any liability, claim, demand, cost, expense and
attorneys' fees incurred by him as a result of any actions or omissions by him
in the course of his employment by ABM to the extent other officers would be so
indemnified.
7. Goodwill and Proprietary Information.
(a) Executive agrees to utilize and further ABM's goodwill
("Goodwill") among its customers, sales prospects and employees, and
acknowledges that ABM may disclose to Executive and Executive amy disclose to
ABM, proprietary trade secrets and other confidential information not in the
public domain ("Proprietary Information") including 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
its 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.
(b) Executive agrees that such Proprietary Information and Goodwill
have unique value to Company, are not generally known or readily available to
ABM's competitors, and could only be developed by others after investing
significant time and money. ABM would not make such Proprietary Information and
Goodwill available to Executive unless ABM 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 ABM would be a breach of such trust and
confidence and in violation of Executive's Duty of Loyalty to ABM.
8. Restrictive Covenants. In recognition of Section 7, Executive hereby
agrees that from the Effective Date through December 31, 2004, and thereafter as
specifically agreed herein:
(a) 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 ABM.
(b) 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, ABM.
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(c) Executive agrees that at all times he shall not seek, solicit,
divert, take away, obtain or accept the patronage of any customer or sales
prospect of ABM through the direct or indirect use of any Proprietary
Information of ABM, or by any other unfair or unlawful business practice.
(d) 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 ABM within the one (1) year period prior to December
31, 2004.
(e) 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 as a result of any law regulating competition or proscribing unlawful
business practices.
9. Non-Disparagement. Both Executive and ABM, through its directors and
officers, agree not to make any unfavorable or disparaging remarks about the
other to third parties or non-officer employees of ABM. However, Executive
acknowledges and agrees that ABM's non-disparagement obligation pursuant to
this Agreement shall extend solely to the actions of ABM's directors and
officers. For this purpose, "officers" is defined as those persons identified
by the Board as subject to the reporting requirements of Section 16 of the
Securities Exchange Act of 1934, as amended.
10. Cooperation. Executive agrees to reasonably cooperate with ABM, its
attorneys or experts retained by ABM or its attorneys in connection with any
litigation matters involving ABM that are pending on the Date of Resignation and
Retirement or that may arise thereafter regarding events prior to the Date of
Resignation and Retirement.
11. No Other Claims. Executive represents and warrants that he has not
filed against ABM or any of its representatives any claim (other than with
respect to any applicable group insurance benefit), complaint, charge or suit
with any federal, state or other agency, court, board, office or other forum or
entity, including any application for workers' compensation benefits. Executive
agrees that he will not, at any time hereafter, file any such claim, complaint,
charge or suit based upon circumstances arising before the Effective Date, other
than a claim arising from a breach by ABM of this Agreement (which shall be
subject to Section 12) and other than a claim with respect to any applicable
group insurance benefit, and that if any agency, court, board, office, forum or
other entity assumes jurisdiction of any such claim, complaint, charge or suit,
he will request such entity to withdraw from the matter. A breach of this
Section 11 shall entitle ABM to damages as provided by law and shall relieve ABM
of all obligations to Executive as provided in this Agreement.
12. General Release.
(a) Executive, on behalf of himself and his heirs, executors,
administrators, successors and assigns, does hereby irrevocably and
unconditionally release, acquit and forever discharge ABM and its affiliates and
all of its and their stockholders, subsidiaries, directors, officers, employees,
representatives, successors, assigns, agents and attorneys (collectively,
"Company") from any and all charges, complaints, grievances, claims,
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liabilities, obligations, promises, agreements, controversies, damages, actions,
causes of action, suits, rights, demands, costs, losses, debts and expenses
(including attorneys' fees and costs actually incurred), of whatever kind or
nature, known or unknown, suspected or unsuspected, joint or several ("Claims"),
which Executive has had or may hereafter claim to have had, against Company by
reason of any matter, act, omission, cause or event whatever that has occurred
up to and including the Effective Date other than those obligations set forth in
this Agreement. This release and waiver of Claims specifically includes: (i) all
Claims arising from or relating in any way to any act or failure to act by any
employee, officer or director of ABM, (ii) all Claims arising from or relating
in any way to the employment relationship of Executive with ABM and/or the
termination thereof, including any Claims which have been asserted or could have
been asserted against Company, and (iii) any and all Claims which might have
been asserted by Executive in any suit, claim, or charge, for or on account of
any matter or things whatsoever that has occurred up to and including the
Effective Date, under any and all laws, constitutions, statutes, orders,
regulations, or any other claim of right(s), including any claim under Age
Discrimination in Employment Act of 1967, as amended, Title VII of the Civil
Rights Act of 1964, as amended (including the amendments of the Civil Rights Act
of 1991), the Employee Retirement Income Security Act of 1976, as amended, the
Americans with Disabilities Act, State antidiscrimination statutes and any Claim
in contract or tort.
(b) ABM, on behalf of itself and its successors and assigns, does
hereby irrevocably and unconditionally release, acquit and forever discharge
Executive and his heirs, executors, administrators, successors and assigns from
any and all Claims which ABM has had or may hereafter claim to have had, against
Executive by reason of any matter, act, omission, cause or event whatever that
has occurred up to and including the Effective Date, other than the obligations
set forth in this Agreement.
(c) For the purpose of implementing a full and complete release and
discharge, each of the parties expressly acknowledges that this Agreement with
the general releases set forth in this Section 12 are intended to include in
their effect, without limitation, all Claims which the parties do not know or
suspect to exist in their favor at the time of execution of this Agreement, and
that this Agreement and such general releases contemplate the extinguishment of
all such Claims. Each of the parties expressly waives and relinquishes all
rights and benefits he or it may have under Section 1542 of the California Civil
Code which provides.
A GENERAL RELEASE DOES NOT EXTENT TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.
Executive represents that he has read and understood the provisions of
California Civil Code Section 1542.
13. Arbitration and Equitable Relief.
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(a) Any claim or dispute related to or arising from this Agreement
(whether based in contract or tort, in law or equity) including claims or
disputes between Executive and ABM or its directors, officers, employees and
agents regarding Executive's employment or termination of employment hereunder,
or any other business of ABM, 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.
(b) The cost of such arbitration shall be borne by ABM. Any such
arbitration must be requested in writing within one (1) year from the date
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.
(c) Provided that the complaining party has given to the other party
no less than one (1) week's prior written notice of the alleged breach, the
parties may apply to any court of competent jurisdiction for a temporary
restraining order, preliminary injunction or other interim or conservatory
relief as may be necessary, without breach of this Agreement and without
abridgment of the powers of the arbitrator. The parties hereby submit
themselves to the court of California in and for the County of San Francisco
for the purpose of enforcing this Agreement.
14. Confidentiality of Agreement.
(a) Executive represents and agrees that he has not disclosed the
terms of this Agreement and, until such time that ABM is required by law to
publicly disclose the terms of this Agreement. Executive agrees that he will
keep the terms, amounts and all other specific facts of this Agreement
completely confidential and that he will not disclose any information
concerning this Agreement to any person or entity, other than that which is
legally required and other than to his immediate family and professional
representatives; provided, that disclosure to his immediate family or
professional representatives is conditioned on the fact that they agree to keep
said information confidential and not disclose it to others.
(b) In the event Executive discloses, in violation of Section 14(a),
the alleged facts upon which this Agreement is based, the amount of
consideration tendered to him, or the terms of the Agreement, ABM shall be
entitled to terminate any payment due under this Agreement or take any other
action legally allowable.
15. Death of Executive. This Agreement shall automatically terminate upon
the death of Executive. ABM shall pay when due to 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 death occurs.
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16. Binding Agreement. This Agreement shall be binding upon and inure to
the benefit of Executive and ABM and their respective heirs, administrators,
representatives, executors, successors and assigns. Executive hereby designates
his wife, Candace Kahn, as his beneficiary under this Agreement.
17. Attorneys' Fees. Each party shall bear its own costs and attorneys'
fees incurred in the achieving the settlement and release of the matters set
forth in this Agreement. If one party commences an action against the other to
enforce or interpret the terms of this Agreement, or to obtain a declaration of
rights under this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees, costs and expenses incurred in such action or any
appeal or enforcement of such action, in addition to any other relief to which
that party may be entitled under this Agreement.
18. Voluntary Participation. Each of the parties acknowledges that he or
it has read the Agreement, and that he or it enters into this Agreement freely,
voluntarily, without coercion and based on the party's own judgment and not in
reliance upon any representations or promises made by the others, except those
contained in this Agreement.
19. Method of Execution. This Agreement may be executed in counterparts
and each counterpart shall be deemed a duplicate original.
20. Governing Law. This Agreement is deemed to have been made and entered
into in the State of California and shall in all respects be interpreted,
enforced and governed under the laws of the State of California. The language
of all parts of this Agreement shall in all cases be construed as a whole
according to its fair meaning and not strictly for or against any party.
21. Severability. The provisions of this Agreement are severable and
should any provision of this Agreement be declared or be determined by any
arbitrator or court to be illegal or invalid, any such provision shall be
stricken, and the validity of the remaining parts, terms or provisions shall
not be affected.
22. Older Workers Benefit Protection Act. Pursuant to the requirements of
the Older Workers Benefit Protection Act, Executive has up to 21 days from
April 8, 2002 to consider and sign this Agreement, although Executive may
accept it at any time within those 21 days. Executive hereby acknowledges that
he has consulted an attorney or been advised to consult an attorney about this
Agreement. Once Executive accepts the terms of this Agreement and signs this
Agreement, he has seven days to revoke his acceptance. To revoke this
Agreement, Executive must send to the CAO a written statement of revocation by
registered mail, return receipt requested. If he does not revoke this
Agreement, this Agreement shall become effective on the eighth day after he
signs it ("Effective Date").
23. Notices.
(a) 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.
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EXECUTIVE: 2444 Leavenworth St.
San Francisco, CA 94133
ABM: ABM Industries Incorporated
160 Pacific Avenue, Suite 222
San Francisco, CA 94111
Attention: President & CEO
with a copy to:
ABM Industries Incorporated
160 Pacific Avenue, Suite 222
San Francisco, CA 94111
Attention: Sr. VP & Chief Employment Counsel
(b) 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.
24. Interpretation. When a reference is made in this Agreement to Sections,
such reference shall be to a Section of this Agreement unless otherwise
indicated. Whenever the words "include," "includes" or "including" are used in
this Agreement they shall be deemed to be followed by the words "without
limitation."
25. Entire Agreement. This Agreement sets forth the entire agreement
between the parties as to the subject matter hereof and supersedes any and all
prior agreements or understandings between the parties written or oral. No
waiver, alteration, or modification of any of the provisions of this Agreement
shall be binding unless in writing and signed by the party against whom
enforcement of the change or modification is sought. Failure or delay on the
part of either party to enforce any right, power, or privilege under this
Agreement shall not be deemed to constitute a waiver thereof.
Date: April 8, 2002 /s/ HARRY H. KAHN
----------------------------
Harry H. Kahn
Date: April 8, 2002 ABM INDUSTRIES INCORPORATED
By: /s/ HENRIK C. SLIPSAGER
------------------------
Name: Henrik C. Slipsager
Title: President and Chief
Executive Officer
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