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| ABM > SEC Filings for ABM > Form 8-K on 7-Jan-2008 | All Recent SEC Filings |
7-Jan-2008
Change in Directors or Principal Officers
On January 1, 2008, James S. Lusk became the Chief Financial Officer of ABM
Industries Incorporated (the "Company"). Mr. Lusk became an Executive Vice
President of the Company in March 2007. Mr. Lusk's biographical information and
2007 compensation information are set forth in the Company's Current Report on
Form 8-K dated March 8, 2007, which is by this reference incorporated herein.
Mr. Lusk's 2008 base compensation, target bonus, and equity compensation have
not yet been established.
Mr. Lusk has entered into an employment agreement with the Company, with an
initial term ended March 19, 2009. Under the employment agreement, he is
compensated at a base salary set by the Company, eligible for a bonus that may
range from 0 percent to 180 percent of a target bonus in accordance with the
bonus incentive program, and is eligible to participate in the Company's equity
grant program. He is subject to a number of restrictive covenants, including
post-employment non-disclosure, post-employment non-solicitation of employees
and customers, and non-disparagement. Mr. Lusk may terminate his agreement with
90 days written notice. 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 term, the agreement renews for a period of one year. The
Company may terminate Mr. Lusk's agreement for cause at any time.
The Company has adopted new forms of executive employment agreement and
anticipates that Mr. Lusk will enter into a new form of employment agreement in
2008, as described in the Company's Current Report on Form 8-K dated October 22,
2007, which is by this reference incorporated herein. When Mr. Lusk enters into
the new employment agreement, he will be eligible for the Company's severance
program for senior executives as described in the Current Report on Form 8-K
dated October 22, 2007, which is by this reference incorporated herein.
The Company has also entered into an agreement with Mr. Lusk, similar to those
of other top senior management, that governs his compensation should his
employment with the Company be terminated under certain defined circumstances
following a change in control. The agreements are considered to be "double
trigger" arrangements where the payment of severance compensation is predicated
upon the occurrence of two triggering events: (1) the occurrence of a change in
control; and (2) either the involuntary termination of employment with the
Company (other than for "cause" as defined in the agreement) or the termination
of employment with the Company for "good reason" as defined in the agreement.
The stated benefits consist of (1) a lump sum payment in an amount equal to two
times the sum of base salary (at the rate in effect for the year in which the
termination date occurs) and current target bonus; (2) the continuation of all
health benefits or reasonably equivalent benefits for 18 months following the
date of termination; and (3) a lump sum cash payment equal to the sum of any
unpaid incentive compensation that was earned, accrued, allocated or awarded for
a performance period ending prior to the termination date plus the value of any
annual bonus or long-term incentive pay earned, accrued, allocated or awarded
with respect to service during the performance period. Any payments under the
severance agreement will be reduced to the extent that the executive receives
payment under his employment agreement with the Company or the Company's
severance program following a termination of employment.
Payments and benefits under the Company's severance agreements (as well as under
all other agreements or plans covering an executive) are subject to reduction in
order to avoid the application of the excise tax on "excess parachute payments"
under the Internal Revenue Code, but only if the reduction would increase the
net after-tax amount received by the named executive officer (the "modified
cap") with one exception. The exception is that the reduction may be made to the
extent the executive would be entitled to receive, on a net-after tax basis, at
least 90% of the severance payment he would otherwise be entitled to under the
severance agreement. In consideration for the protection afforded by the
severance agreements, the executive agrees to non-competition provisions for the
term of employment and for varying periods of time thereafter.
On January 1, 2008, Joseph F. Yospe became Chief Accounting Officer and
Corporate Controller of the Company. Mr. Yospe, 49, was elected Senior Vice
President, Finance of ABM in October 2007. Prior to that appointment, he was
Vice President and Assistant Controller of The Interpublic Group of Companies
Incorporated from September 2004 to September 2007; and Corporate Controller and
Chief Accounting Officer Genmab A/S from September 2002 to September 2004.
Mr. Yospe has entered into an employment agreement with the Company, under which
he is compensated at a base salary set by the Company, eligible for a bonus in
accordance with the bonus incentive program, and eligible to participate in the
Company's equity grant program. He is subject to a number of restrictive
covenants, including post-employment non-disclosure, post-employment
non-solicitation of employees and customers, non-disparagement, and
post-employment non-competition restrictions. Mr. Yospe may terminate his
agreement with 60 days written notice. Mr. Yospe's agreement does not have a
specific term, and the Company may terminate the agreement at any time. In the
event he is terminated without a good faith determination of "cause" as defined
in the agreement, he will be eligible for severance pay and other benefits in
accordance with the ABM Severance Program in effect at the time of such
termination. In those circumstances under the ABM Severance Program currently in
effect, Mr. Yospe would be eligible for payments of 12 months base salary and
target bonus, as well as payment of the Company's portion of medical benefits
for employees for that period, and up to 12 months of outplacement services. The
employment agreement provides that any severance payments upon a change of
control will be limited to amounts not subject to excise taxes as "excess
parachute payments" under Section 162(m) of the Internal Revenue Service of 1986
as amended.
Mr. Yospe's base compensation is $330,000 annually and beginning with the fiscal
year ended October 31, 2008, he will be eligible for a target bonus equal to
40 percent of his annual base salary. For fiscal year 2008, the Company has
guaranteed that Mr. Yospe's bonus will be at target or higher. Mr. Yospe also
received a signing bonus of $105,000. Mr. Yospe is eligible to participate in
the 2006 Equity Incentive Program as approved by the Compensation Committee of
the Company's Board of Directors. Mr. Yospe was awarded an equity grant on
October 1, 2007, consisting of 7,708 restricted stock units, which will vest 50%
on the second anniversary and 50% on the fourth anniversary of the date of
grant; a nonqualified stock option grant for 11,546 shares with an exercise
price of $20.43, which will vest over the four years after the date of grant;
and 5,628 performance shares, which represent a contingent right to receive
shares of common stock based on two-year profit margin and revenue targets in
the period ended October 31, 2009. Dividend equivalent rights accrue on the
restricted stock units and performance shares.
The resignation of George B. Sundby, former Executive Vice President & Chief
Financial Officer, became effective on December 31, 2007. As contemplated in
Mr. Sundby's employment agreement, Mr. Sundby will receive a 2007 incentive
bonus equal to 50% of his salary, a $100,000 bonus related to the timely filing
of the Company's 2007 Form 10-K and effectiveness of the Company's internal
control over financial reporting. Upon execution of a release, Mr. Sundby will
also receive a severance payment of $540,000 and reimbursement for the cost of
certain continuing health insurance benefits. To the extent Mr. Sundby provides
consulting services after December 31, 2007, he will receive $300 per hour.
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