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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
American Building Maintenance Industries, Inc.
- - - --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Harry H. Kahn, Esq.
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- - - --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- - - --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11.
- - - --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- - - --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- - - --------------------------------------------------------------------------------
(2) Form, schedule or registration statement No.:
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(3) Filing party:
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(4) Date filed:
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AMERICAN BUILDING
(ABM LOGO) MAINTENANCE
INDUSTRIES, INC.
50 Fremont Street, 26th Floor
San Francisco, California 94105
------------------------
NOTICE OF THE 1994 ANNUAL MEETING OF STOCKHOLDERS
TUESDAY, MARCH 15, 1994
10:00 A.M.
------------------------
To Our Stockholders:
The 1994 Annual Meeting of Stockholders of American Building Maintenance
Industries, Inc. will be held at 50 Fremont Street, 40th Floor, Bayview Room,
San Francisco, California 94105, on Tuesday, March 15, 1994 at 10:00 a.m. for
the following purposes:
(1) To elect four directors, each to serve for a term of three years;
(2) To amend the Company's Certificate of Incorporation to change the
name of the Company to ABM Industries Incorporated;
(3) To approve amendments to the Company's 1985 Employee Stock
Purchase Plan as set forth and further described in the attached
Proxy Statement, including an amendment to increase the number of
shares authorized for issuance thereunder by 500,000 shares;
(4) To approve amendments to the Company's 1987 Stock Option Plan as
set forth and further described in the attached Proxy Statement,
including an amendment to increase the number of shares authorized
for issuance thereunder by 500,000 shares; and
(5) To transact such other business as may properly come before the
meeting or any adjournments thereof.
Only stockholders of record on the books of the Company at the close of
business on February 4, 1994 will be entitled to vote at the Annual Meeting and
any adjournments thereof.
By Order of the Board of Directors
Harry H. Kahn
Vice President, General Counsel and
Secretary
San Francisco, California
February 14, 1994
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE MARK, DATE,
SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE.
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AMERICAN BUILDING
(ABM LOGO) MAINTENANCE
INDUSTRIES, INC.
50 Fremont Street, 26th Floor
San Francisco, California 94105
------------------------
PROXY STATEMENT
The accompanying proxy is solicited on behalf of the Board of Directors of
American Building Maintenance Industries, Inc., a Delaware corporation (the
"Company"), for use at the 1994 Annual Meeting of Stockholders of the Company
(the "Annual Meeting") to be held at 10:00 a.m. on March 15, 1994, and at any
adjournments of the Annual Meeting, for the purposes set forth in the
accompanying notice.
Only stockholders of record on the books of the Company at the close of
business on February 4, 1994 will be entitled to vote at the Annual Meeting. At
the close of business on that date, there were outstanding 8,842,277 shares of
Common Stock of the Company and 6,400 shares of Preferred Stock of the Company.
Each share of Common Stock and each share of Preferred Stock is entitled to one
vote upon each of the matters to be presented at the Annual Meeting.
The representation in person or by proxy of at least a majority of the
outstanding shares entitled to vote is necessary to provide a quorum at the
Annual Meeting. Abstentions and broker non-votes are counted as present in
determining whether the quorum requirement is satisfied. With regard to the
election of directors, votes may be cast "For" or "Withheld For" each nominee;
votes that are withheld will be excluded entirely from the vote and will have no
effect. Abstentions may be specified on all proposals except the election of
directors. Since the amendment of the Certificate of Incorporation (Item 2 in
this Proxy Statement) requires the approval of a majority of the outstanding
shares, abstentions will have the effect of a negative vote. Abstentions on the
other two proposals (Items 3 and 4 of this Proxy Statement) will have the same
effect because they require the affirmative vote of a majority of shares present
in person or by proxy and entitled to vote. Under the rules of the New York
Stock Exchange, brokers who hold shares in street name have the authority to
vote in their discretion on "routine" items when they have not received
instructions from beneficial owners. With respect to "non-routine" items, no
broker may vote shares held for customers without specific instructions from
such customers. Under Delaware law, a broker non-vote will have the same effect
as a vote against "non-routine" items requiring the approval of a majority of
the outstanding shares, but will have no effect on the outcome of "non-routine"
items requiring the affirmative vote of a majority of the shares represented at
the Annual Meeting and entitled to vote thereon. The New York Stock Exchange has
advised the Company that it will treat Items 3 and 4 of the Proxy Statement as
"non-routine" items.
If the enclosed form of proxy is properly signed and returned, the shares
represented thereby will be voted at the Annual Meeting in accordance with the
instructions specified thereon. If the proxy does not specify how the shares
represented thereby are to be voted, the proxy will be voted as recommended by
the Board of Directors. Any person signing a proxy in the form accompanying this
proxy statement has the power to revoke it prior to or at the Annual Meeting. A
proxy may be revoked by written request delivered to the Secretary of the
Company stating that the proxy is revoked, by a subsequent proxy signed by the
person who signed the earlier proxy or by attendance at the Annual Meeting and
voting in person.
The expense of soliciting proxies in the enclosed form will be paid by the
Company. Following the original mailing of the proxies and soliciting materials,
employees of the Company may solicit proxies by mail, telephone, telegraph and
personal interviews. The Company will request brokers, custodians, nominees and
other record holders to forward copies of the proxies and soliciting materials
to persons for whom they hold shares of the Company's Common Stock or Preferred
Stock and to request authority for the exercise of proxies; in such cases, the
Company will reimburse such holders for their reasonable expenses.
This Proxy Statement and the accompanying proxy were first sent to
stockholders on or about February 14, 1994.
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ITEM 1--ELECTION OF DIRECTORS
The Company's Board of Directors is divided into three classes with each
director serving a three-year term and one class being elected at each Annual
Meeting. The total number of directors comprising the Board of Directors is
currently set by the Company's By-Laws at eleven. Of this number, four members
of the Board of Directors have terms expiring at this year's Annual Meeting,
three members have terms expiring at the 1995 Annual Meeting and four members
have terms expiring at the 1996 Annual Meeting. Directors elected at this year's
Annual Meeting will hold office until the 1997 Annual Meeting, or until their
successors have been elected and qualified, whichever is later.
In the absence of instructions to the contrary, shares represented by the
accompanying proxy will be voted for the election of the four nominees
recommended by the Board of Directors, who are named in the following table. The
four nominees receiving the highest number of votes will be elected. If a
stockholder withholds authority to vote for one or more of the nominees, such
stockholder's shares will be counted for purposes of determining whether a
quorum is present at the Annual Meeting but will have no effect on the outcome
of the election.
The Company has no reason to believe that the nominees for election will be
unable or unwilling to serve if elected as directors. However, if any such
nominee is unable or unwilling to be a candidate for the office of director at
the date of the Annual Meeting, or any adjournment thereof, the proxy holders
will vote for such substitute nominee as they shall in their discretion
determine.
The Company's By-Laws provide that stockholders intending to nominate
candidates for election as directors must give the prescribed notice to the
Secretary of the Company at least 60 days prior to the applicable meeting of
stockholders. No such notice has been given with respect to this year's Annual
Meeting.
The following table indicates certain information concerning the nominees
and the Company's other directors which is based on data furnished by them.
PRINCIPAL OCCUPATIONS AND SERVED AS
BUSINESS EXPERIENCE DIRECTOR
NAME AGE DURING PAST FIVE YEARS SINCE
--- ----------------------------------------------------
NOMINEES FOR ELECTION AS DIRECTORS
FOR A TERM ENDING AT THE 1997 ANNUAL MEETING
Martinn H. Mandles....... 53 Executive Vice President and Chief Administrative 1991
Officer of the Company since November 1991; Vice
President of the Company from October 1972 to
November 1991
Sydney J. Rosenberg...... 79 Chairman of the Board of the Company since June 1962
1984; Chief Executive Officer of the Company since
November 1991(1)
Theodore Rosenberg....... 85 Chairman of the Company's Executive Committee since 1962
June 1984(1)(2)
William W. Steele........ 57 President and Chief Operating Officer of the Company 1988
since November 1991; Executive Vice President and
Chief Operating Officer of the Company from April
1988 to November 1991; President of the Company's
Janitorial Division from June 1984 to April 1988
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PRINCIPAL OCCUPATIONS AND SERVED AS
BUSINESS EXPERIENCE DIRECTOR
NAME AGE DURING PAST FIVE YEARS SINCE
--- ----------------------------------------------------
DIRECTORS CONTINUING IN OFFICE FOR A
TERM ENDING AT THE 1995 ANNUAL MEETING
----------------------------------------------------
Claude M. Ballard, Jr.... 64 Limited Partner of the Goldman Sachs Group, L.P. 1979
since March 1989; Limited Partner of Goldman, Sachs
& Co. from December 1988 to March 1989; Partner of
Goldman, Sachs & Co. from November 1981 to
December 1988(3)
Robert S. Dickerman, 74 Attorney at Law and Business Advisor(5) 1967
Esq....................
William E. Walsh......... 62 Head Football Coach at Stanford University since 1993
1992; Professional Football Analyst for National
Broadcasting Company from 1989 to 1991; Head
Football Coach of the San Francisco Forty-Niners
from 1979 to 1988(4)
DIRECTORS CONTINUING IN OFFICE FOR A
TERM ENDING AT THE 1996 ANNUAL MEETING
----------------------------------------------------
Maryellen B. Cattani, 50 Senior Vice President, General Counsel and Secretary 1993
Esq.................... of American President Companies, Ltd. since July
1991; Partner at Morrison & Foerster, a law firm,
from February 1989 to July 1991; Senior Vice
President, General Counsel and Secretary of
Transamerica Corporation from December 1983 to
February 1989(6)
John F. Egan............. 58 Vice President of the Company since 1978; President 1988
of the Company's Janitorial Division since April
1988; Chairman of the Company's Janitorial
Division from June 1984 to March 1992
Charles T. Horngren...... 67 Littlefield Professor of Accounting, Graduate School 1973
of Business, Stanford University(7)
Felix M. Juda............ 84 Registered Representative, Sutro & Co., investment 1962
brokers
- - - ------------
(1) Theodore Rosenberg and Sydney J. Rosenberg are brothers and may each be
deemed to be a "control person" of the Company within the meaning of the
General Rules and Regulations adopted by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended.
(2) Effective as of December 31, 1989, Theodore Rosenberg retired as an officer
and employee of the Company. Theodore Rosenberg has retained his Board
position as Chairman of the Executive Committee. Theodore Rosenberg is
currently serving as a consultant to the Company.
(3) Claude M. Ballard, Jr. is Chairman of the Board of Merit Equity Partners,
Inc. and Rockefeller Center Properties, Inc., and is also a member of the
Board of Directors of Bedford Property Investors Inc., CBL & Associates
Properties, Inc., Mutual Life Insurance Company of New York, and Taubman
Centers Inc.
(4) William E. Walsh is a member of the Board of Directors of Orchard Supply
Hardware Corporation.
(5) Robert S. Dickerman is a member of the Board of Directors of Easton Sports,
Lawry's Restaurants, and Logicon, Inc.
(6) Maryellen B. Cattani is a member of the Board of Directors of Bank of the
West, a wholly-owned subsidiary of Banque Nationale de Paris.
(7) Charles T. Horngren is a member of the Board of Directors of Logicon, Inc.
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FURTHER INFORMATION CONCERNING THE BOARD OF DIRECTORS
COMMITTEES OF THE BOARD
The standing committees of the Company's Board of Directors are the
Executive Committee, Audit Committee and Executive Compensation Committee. The
Board does not have a nominating committee. The entire Board designates nominees
for election as directors. The members and functions of these committees are as
follows:
Executive Committee. Except for the declaration of dividends and
certain other powers which may be exercised only by the full Board under
Delaware law, the Executive Committee has the authority to exercise all
powers of the Board with regard to the business of the Company. The current
members of the Executive Committee are Theodore Rosenberg, Chairman;
Martinn H. Mandles; Sydney J. Rosenberg; and William W. Steele.
Audit Committee. The Audit Committee meets periodically with
management and the independent public accountants for the Company to make
inquiries regarding the manner in which their respective responsibilities
are being discharged and reports thereon to the full Board of Directors.
The Audit Committee also recommends the annual appointment of the
independent public accountants with whom the Audit Committee reviews the
scope of the audit and non-audit assignments and related fees, the
accounting principles applied by the Company in financial reporting,
internal financial auditing procedures and the adequacy of internal
controls. The current members of the Audit Committee are Charles T.
Horngren, Chairman; and Robert S. Dickerman.
Executive Compensation Committee. The Executive Compensation
Committee reviews and recommends to the Board of Directors compensation and
other terms and conditions of employment for the executive officers of the
Company; administers the Company's stock option plans and authorizes grants
thereunder; and administers the Company's stock purchase plan. The current
members of the Executive Compensation Committee are Claude M. Ballard, Jr.,
Chairman; Maryellen B. Cattani; and Theodore Rosenberg.
MEETINGS AND ATTENDANCE
During the fiscal year ended October 31, 1993, the Board of Directors met
nine times, the Executive Committee met 22 times, the Audit Committee met three
times and the Executive Compensation Committee met two times. During this
period, William E. Walsh attended fewer than seventy-five percent of the total
number of meetings of the Board of Directors held during the period for which he
has been a director.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company ("Outside Directors") are
paid directors' fees of $12,000 per year and $1,000 for each Board meeting
attended. Each Outside Director also receives $1,000 for each Audit and
Executive Compensation Committee meeting attended, as applicable. In addition,
Outside Directors serving as Chairpersons of the Executive Committee, Audit
Committee and Executive Compensation Committee each receives $1,500 per year.
Maryellen B. Cattani received $2,000 in fiscal 1993 for serving as Chairperson
of the Company's ad hoc Litigation Committee.
The Company has entered into Outside Director Retirement Benefit Agreements
with Claude M. Ballard, Jr., Maryellen B. Cattani, William H. Coleman, Robert S.
Dickerman, Charles T. Horngren, Felix M. Juda, Theodore T. Rosenberg, William E.
Walsh and E.R. Zumwalt, Jr. These agreements provide that, upon the retirement
of such Outside Directors, the Company will pay them the monthly retainer they
were receiving at the time of their retirement (subject to a 10% reduction for
every year of service as an Outside Director less than ten) for a maximum period
of ten years. Upon or after attaining the age of 72 years, the retired Outside
Director may elect to receive such payment monthly, or in a lump sum discounted
to present value at the time of such election. Outside Directors under the age
of 72 years who retire with fewer than five years of service as Outside
Directors, however, are not entitled to any benefits under these agreements.
William H. Coleman and
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E.R. Zumwalt, Jr., who retired as directors in 1993, each received a lump sum
payment of $80,521 pursuant to such agreements.
See "Executive Compensation Committee Interlocks and Insider Participation"
for a discussion of certain payments made to Theodore Rosenberg.
ITEM 2--AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION
In September 1993, the Board of Directors approved, subject to approval of
the stockholders at the Annual Meeting, a change in the name of the Company from
American Building Maintenance Industries, Inc. to ABM Industries Incorporated,
by adopting an amendment to the Certificate of Incorporation of the Company. The
affirmative vote of a majority of the outstanding shares will be necessary to
approve adoption of the name change. It is intended that, unless otherwise
directed by stockholders, proxies will be voted for approval of the name change.
The Board of Directors believes that the new corporate name "ABM Industries
Incorporated" is more representative of the overall business conducted by the
Company. The Company, which began primarily as a provider of building
maintenance services, now engages in nine lines-of-business, some of which are
unrelated to building maintenance. The old corporate name, which focused on
building maintenance, is no longer reflective of the Company's diversified
services. Accordingly, the Board of Directors recommends a vote FOR adoption of
the name change.
ITEM 3--AMENDMENT TO THE COMPANY'S 1985 STOCK PURCHASE PLAN
Since 1970, the Company's stockholders have approved seven separate stock
purchase plans to provide employees of the Company with an opportunity to
purchase Common Stock through payroll deductions. The 1985 Employee Stock
Purchase Plan (the "1985 Plan") was approved by stockholders and became
effective in April 1985. Under the 1985 Plan, 2,000,000 shares were reserved for
issuance. All employees, including officers and other executives, are eligible
to participate in the 1985 Plan. Employees can elect to invest up to 10% of
their cash compensation through payroll deductions for the purchase of shares in
the individual offerings. The purchase price of the shares is 85% of the average
of the high and low prices of the Company's Common Stock on the New York Stock
Exchange (i) on the first day of the purchase period for the offering or (ii) on
the last day of any pay period when a participant has a sufficient amount
accumulated from payroll deductions to purchase ten or more shares, whichever is
less. As of December 31, 1993, approximately 27,923 employees were eligible to
participate, and 932 employees were actively participating, in the 1985 Plan. As
of such date, 385,287 shares remained available for future issuance under the
1985 Plan.
In December 1993, the Board of Directors adopted certain amendments to the
1985 Plan. The Board amended the 1985 Plan to (i) increase the number of shares
of Common Stock authorized for issuance under the 1985 Plan by 500,000, (ii)
extend the term of the 1985 Plan from March 31, 1995 to April 30, 1997, and
(iii) give the Board of Directors the discretion to amend the 1985 Plan unless
such amendment requires the approval of stockholders to assure the 1985 Plan's
continued compliance with Rule 16b-3 of the rules and regulations promulgated
under the Securities Act of 1933, as amended ("Rule 16b-3"). A copy of the 1985
Plan, as proposed to be amended, is attached hereto as Exhibit A. The amendments
to the 1985 Plan are subject to approval of the stockholders at the Annual
Meeting.
It is intended that, unless otherwise directed by stockholders, proxies
will be voted for approval of the amendments to the 1985 Plan. The affirmative
vote of a majority of the shares represented at the Annual Meeting and entitled
to vote on this matter will be necessary to approve adoption of the amendments.
The Board of Directors believes that the 1985 Plan has been valuable to the
Company in attracting and retaining the services of employees upon whom the
Company's success depends. Accordingly, the Board of Directors recommends a vote
FOR adoption of the amendments.
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ITEM 4--AMENDMENT TO THE COMPANY'S 1987 STOCK OPTION PLAN
In March 1987, the stockholders adopted the 1987 Stock Option Plan (the
"1987 Plan") pursuant to which 600,000 shares of the Company's Common Stock were
reserved for issuance. The 1987 Plan provides for the grant of both nonqualified
stock options and, within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended, incentive stock options ("ISO's"). The 1987 Plan is
administered by the Executive Compensation Committee of the Board of Directors,
which has the sole discretion to determine the employees to whom options shall
be granted, the number of such options, the form of payment upon exercise of an
option, and to otherwise administer the 1987 Plan. No option granted under the
1987 Plan is transferable by the optionee other than by will or the laws of
descent and distribution, and each option is exercisable, during the lifetime of
the optionee, only by such optionee. Approximately 135 persons currently
participate in the 1987 Plan.
The exercise price of options granted under the 1987 Plan must be at least
99% of the fair market value of Common Stock on the date of grant. In the case
of any ISO, the exercise price must be at least 100% of the fair market value of
Common Stock on the date of grant. With respect to any participant who owns
stock representing more than 10% of the total combined voting power of all
classes of the Company's capital stock, the exercise price of any ISO must be at
least 110% of the fair market value of the Company's Common Stock on the date of
the grant. The term of each option is determined by the Committee, provided that
no option shall be exercisable after the expiration of ten years and one month
from the date of grant, and no ISO shall be exercisable after the expiration of
ten years from the date of grant (five years in the case of a more-than-10%
stockholder). Under the terms of the 1987 Plan, the aggregate fair market value
of the Common Stock (determined at the date of the option grant) with respect to
which ISO's are exercisable for the first time by an optionee in any calendar
year (under all incentive stock option plans maintained by the Company) may not
exceed $100,000.
Based on current federal income tax laws, the tax consequences of options
granted under the 1987 Plan generally are as follows:
Recipients of nonqualified stock options will not have taxable income at
the time of grant, but will have ordinary income upon the exercise of such
options in the amount, if any, that the fair market value of such shares on the
date of exercise exceeds the option price of such shares. Any gain or loss
recognized by such recipient upon the sale of such shares generally will be a
capital gain or loss (short-term or long-term, as applicable).
Recipients of ISO's will not have taxable income at the time of grant, or
upon the exercise of such options, but will (i) if the recipient does not hold
such shares for a minimum period, generally have ordinary income upon the sale
of such shares in the amount, if any, that the selling price of such shares on
the date of sale exceeds the lesser of the option price of such shares on the
date of grant or the fair market value of the stock on the date of exercise, or
(ii) if the recipient holds such shares for such minimum period, generally have
a capital gain or loss (short-term or long-term, as applicable) upon the sale of
such shares in the amount, if any, that the selling price of such shares on the
date of sale exceeds the option price of such shares.
The Company will be entitled to a federal income tax deduction from the
exercise of options and/or the sale of stock under the 1987 Plan only if and to
the extent that the recipient recognizes ordinary income from such exercise of
options and/or sale of stock, and only if applicable withholding requirements
are met.
As of December 31, 1993, options to purchase 483,865 shares of Common Stock
were outstanding under the 1987 Plan at a weighted average exercise price of
$13.78 per share and no shares remained available for future grant. No options
were granted under the 1987 Plan during fiscal 1993. The closing price of a
share of the Common Stock on the New York Stock Exchange on February 7, 1993 was
$17.88.
In December 1993, the Board of Directors adopted certain amendments to the
1987 Plan. These amendments are summarized below. A copy of the 1987 Plan, as
proposed to be amended, is attached hereto as Exhibit B. The amendments to the
1987 Plan are subject to approval of the stockholders at the Annual Meeting.
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Proposed Amendments:
(i) To increase the number of shares of Common Stock reserved for
issuance under the 1987 Plan by 500,000.
(ii) To specify in the 1987 Plan that all future options granted under
the 1987 Plan will vest at a rate of 20% per year beginning one year after
the date of grant. Currently the 1987 Plan provides that the Executive
Compensation Committee may set the vesting schedule for each option in its
discretion.
(iii) To provide for the grant of options to each of the Company's
non-employee directors in the amount of 2,000 shares of Common Stock per
year at an exercise price equal to 100% of the fair market value on the
date of grant. For current directors, the first grant date would be the
date that the stockholders approve this amendment. For new directors,
options would be granted on the date of their election or appointment to
the Board of Directors. After receiving an initial grant, each such
director would receive additional options in the amount of 2,000 shares of
Common Stock on the first day of each subsequent fiscal year. The other
terms and conditions of such non-employee directors' options will be as set
forth in the 1987 Plan with respect to options generally.
(iv) To provide that no person may receive options covering more than
25,000 shares in any fiscal year. Currently, there is no such limit in the
1987 Plan.
(v) To give the Board of Directors discretion to amend the 1987 Plan
unless such amendment requires the approval of stockholders to assure the
1987 Plan's continued compliance with Rule 16b-3.
Option Grants:
The following table discloses the number of shares covered by options
that have been approved for grant under the 1987 Plan, as amended, as of
the date of the Annual Meeting. These options are subject to the approval
by stockholders at the Annual Meeting of the proposed amendment to increase
the number of shares of Common Stock reserved for issuance under the 1987
Plan. All such options will have an exercise price equal to the fair market
value of the Common Stock at the close of business on the date of the
Annual Meeting, and will vest at a rate of 20% per year beginning one year
after the date of grant.
NUMBER OF OPTIONS
NAME AND POSITION TO BE GRANTED
----------------- ------------------
Sydney J. Rosenberg......................................... 25,000
Chairman of the Board and
Chief Executive Officer of the Company
William W. Steele........................................... 25,000
President and Chief Operating Officer
of the Company
John F. Egan................................................ 20,000
Vice President of the Company and
President of the Janitorial Division
Jess E. Benton, III......................................... 15,000
Vice President of the Company and
President of Amtech Services
David H. Hebble............................................. 7,500
Vice President and Chief Financial
Officer of the Company
Executive Group(1).......................................... 150,000
Non-Executive Director Group(2)............................. 14,000
Non-Executive Officer Employee Group(3)..................... 290,500
- - - ------------
(1) Consists of all current executive officers, as a group.
(2) Consists of all current directors who are not executive officers, as a
group.
(3) Consists of all employees other than executive officers, as a group.
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It is intended that, unless otherwise directed by stockholders, proxies
will be voted for approval of the amendments to the 1987 Plan. The affirmative
vote of a majority of the shares represented at the Annual Meeting and entitled
to vote on this matter will be necessary to approve adoption of the amendments
to the 1987 Plan. The Board of Directors believes that the 1987 Plan promotes
the long-term success of the Company and the creation of stockholder value by
attracting and retaining eligible individuals with exceptional qualifications by
encouraging such individuals to focus on long-range objectives, and by linking
participants directly to stockholder interests through increased stock
ownership. Therefore, the Board of Directors recommends a vote FOR adoption of
the amendments.
EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
The compensation for each of the five most highly compensated executive
officers of the Company for services in all capacities rendered to the Company
and its subsidiaries during the fiscal years ended October 31, 1993, 1992 and
1991 is set forth below. Columns regarding "Other Annual Compensation,"
"Restricted Stock Awards," "Long-Term Incentive Plan [LTIP] Payouts" and "All
Other Compensation" are excluded because no reportable payments were made to
such executive officers for the relevant years.
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION(1) SECURITIES
NAME AND FISCAL ---------------------- UNDERLYING
PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#)
- - - ----------------------------------- ------ --------- -------- ------------
Sydney J. Rosenberg................ 1993 $350,000 $50,916 0
Chairman of the Board and 1992(2) 335,000 39,674 20,000
Chief Executive Officer 1991 275,268 4,050 0
of the Company
William W. Steele.................. 1993 350,000 50,916 0
President and Chief Operating 1992(3) 335,000 39,674 20,000
Officer of the Company 1991 260,467 60,000 0
John F. Egan....................... 1993 287,091 69,454 0
Vice President of the Company 1992 273,420 74,902 8,000
and President of the Janitorial 1991 260,400 54,889 0
Division
Jess E. Benton, III................ 1993 236,250 65,750 0
Vice President of the Company 1992 225,000 55,150 8,000
and President of Amtech 1991 202,585 68,000 0
Services
David H. Hebble.................... 1993 239,629 23,870 0
Vice President and Chief 1992 228,218 22,271 6,000
Financial Officer of the 1991 217,350 26,250 0
Company
- - - ------------
(1) Includes amounts deferred under the Company's Deferred Compensation Plan.
(2) Sydney J. Rosenberg was promoted to Chief Executive Officer as of November
1, 1991.
(3) William W. Steele was promoted to President as of November 1, 1991.
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OPTIONS GRANTED TO EXECUTIVE OFFICERS
The Executive Compensation Committee of the Board of Directors currently
has authority to grant stock options under either the Executive Stock Option
Plan (the "1984 Plan") or the 1987 Stock Option Plan (the "1987 Plan"). The
following table sets forth certain information regarding stock options exercised
and owned by the executive officers named in the foregoing Summary Compensation
Table. A table captioned "Option Grants in Last Fiscal Year" is omitted because
the Company granted no options during the last fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF NUMBER OF
SECURITIES SECURITIES
UNDERLYING UNDERLYING VALUE OF
UNEXERCISED UNEXERCISED UNEXERCISED
OPTIONS AT OPTIONS AT IN-THE-MONEY
FY-END FY-END OPTIONS UNDER
SHARES UNDER THE UNDER THE BOTH PLANS AT
ACQUIRED 1984 PLAN(#)(1) 1987 PLAN(#) FY-END($)(2)
ON VALUE EXERCISABLE/ EXERCISABLE/ EXERCISABLE/
NAME AND POSITION EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE UNEXERCISABLE
- - - ------------------------------------ ----------- --------------- ------------ ----------------
Sydney J. Rosenberg...... None n/a 0/0 4,000/16,000 $ 0 (3)
Chairman of the Board
and Chief Executive
Officer of the Company
William W. Steele........ None n/a 0/20,000 34,000/16,000 $187,350/$ 98,700(4)
President and Chief
Operating Officer of
the Company
John F. Egan............. None n/a 0/23,000 31,600/6,400 $204,150/$113,505(5)
Vice President of the
Company and President
of the Janitorial
Division
Jess E. Benton, III...... None n/a 0/20,000 11,600/6,400 $42,450/$ 98,700(6)
Vice President of the
Company and President
of Amtech Services
David H. Hebble.......... None n/a 0/16,000 11,200/4,800 $42,450/$ 78,960(7)
Vice President and
Chief Financial Officer
of the Company
- - - ------------
(1) Options granted under the 1984 Plan may be exercised only by option holders
who remain employees or members of the Board of Directors of the Company or
its subsidiaries until the last day of the month coinciding with or next
following their 67th birthday, and the options may be exercised only during
the period from that date and continuing, if they are not then retired,
until 30 days after their actual retirement date. The right to exercise such
options will terminate if they are not exercised by the employee or director
during such period. However, the options may be immediately exercised in the
event of dissolution or liquidation of the Company or a merger or
combination in which the Company is not the surviving corporation.
(2) Based on a price per share of $16.38, which was the price of a share of
Common Stock on the NYSE at the close of business on October 31, 1993.
(3) None of Sydney J. Rosenberg's options were in-the-money options. Since
Sydney J. Rosenberg beneficially owns more than 10% of the Company's Common
Stock, grants of incentive stock options to him under the 1987 Plan are at
110% of the market price on the date of grant.
(4) Includes 20,000 nonqualified stock options granted in 1983 at an exercise
price of $11.44 per share, 30,000 incentive stock options granted in 1988 at
an exercise price of $10.13 per share and 20,000 incentive stock options
granted in 1991 at an exercise price of $16.97 per share.
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(5) Includes 23,000 nonqualified stock options granted in 1983 at an exercise
price of $11.44 per share, 30,000 incentive stock options granted in 1988 at
an exercise price of $9.57 per share and 8,000 incentive stock options
granted in 1991 at an exercise price of $16.97 per share.
(6) Includes 20,000 nonqualified stock options granted in 1983 at an exercise
price of $11.44 per share, 10,000 incentive stock options granted in 1988 at
an exercise price of $12.13 per share and 8,000 incentive stock options
granted in 1991 at an exercise price of $16.97 per share.
(7) Includes 16,000 nonqualified stock options granted in 1983 at an exercise
price of $11.44 per share, 10,000 incentive stock options granted in 1988 at
an exercise price of $12.13 per share and 6,000 incentive stock options
granted in 1991 at an exercise price of $16.97 per share.
SERVICE AWARD BENEFIT PLAN
The Company's Service Award Benefit Plan became effective on November 1,
1989. This plan is an unfunded "severance pay plan" as defined in the Employee
Retirement Income Security Act of 1974, as amended. All qualified employees, as
defined in said Service Award Benefit Plan, earning more than the Internal
Revenue Service determination of a highly compensated individual as determined
each calendar year (currently over $64,245), are eligible for benefits under the
plan. The Company has a separate Profit Sharing and Employee Savings Plan for
all qualified employees, as defined in said Profit Sharing and Employee Savings
Plan, who earn less than such amount.
The plan provides that, upon termination, eligible employees will receive
seven days pay for each full fiscal year of employment subsequent to November 1,
1989. The Company, at its discretion, may also award additional days each year.
The amount of the payment is based on the average annual compensation, up to a
maximum of $150,000, received by the employee in the current calendar year and
the two calendar years preceding termination. The amount of the payment under
the plan, together with any other severance pay paid to the employee, cannot
exceed two times the compensation received by the employee in the 12 month
period preceding the termination of employment.
If an employee's employment terminates before the employee has been
employed for five years, except in the case of death, disability or normal
retirement of the employee, if the employee is terminated for cause (such as
theft or embezzlement), or if the employee subsequently engages in competition
with the Company, such employee forfeits any benefits payable under the plan.
Following termination, eligible employees will receive their payments under
the plan in two equal installments. Executives, managers and salespersons of the
Company will receive their first payment in the eleventh month following
termination and the second payment no later than the last day of the
twenty-third month following termination. Other eligible employees will receive
their first payment as soon as administratively possible following termination
and their second payment in the thirteenth month following termination. The
payment schedule may be waived for employees who terminate employment after
reaching age 62, or if termination results from death or total disability.
In fiscal 1993, the Company paid an aggregate of $25,785 to two former
executive officers under this plan.
EMPLOYMENT CONTRACTS
The Company has entered into written employment contracts with each of the
executive officers named in the foregoing compensation tables. These contracts
are dated as of November 1, 1991 and provide for an annual base salary
(currently set at the following amounts for fiscal 1994, which amounts represent
a five percent increase over such executive's annual base salary for fiscal
1993: $370,000 for each of Sydney J. Rosenberg and William W. Steele, each of
whom has voluntarily elected to receive only $360,500 which is a three percent
increase over their annual base salary for fiscal 1993; $301,446 for John F.
Egan; $248,063 for Jess E. Benton, III who has voluntarily elected to receive
only $243,338 which is a three percent increase over his annual base salary for
fiscal 1993; and $251,610 for David H. Hebble), and an annual bonus based on
pre-tax profits, plus other customary benefits such as participation in the
Company's other employee benefit plans, payment of premiums on group insurance
policies and payment of club membership fees. In addition, the
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contracts provide that upon such persons' retirement or other specified events,
the Company will pay to such persons consulting fees for a period of ten years
in the aggregate amounts of $1,000,000 in the case of Sydney Rosenberg; between
$474,285 and $1,000,000 in the case of William W. Steele, depending upon the
number of years of his employment with the Company after November 1, 1993;
between $428,571 and $600,000 in the case of John F. Egan, depending upon the
number of years of his employment with the Company after November 1, 1993; and
$120,000 each in the cases of Jess E. Benton, III and David H. Hebble. These
employment contracts continue for an initial term of three years ending on
October 31, 1994 in the cases of Sydney J. Rosenberg and William F. Steele, and
two years ending on October 31, 1993 in the cases of John F. Egan, Jess E.
Benton, III, and David H. Hebble, unless earlier terminated by either party or
later extended pursuant to the terms of each contract. The contracts with John
F. Egan, Jess E. Benton, III, and David H. Hebble have been extended pursuant to
the terms of each contract for an additional one-year term ending on October 31,
1994.
MANAGEMENT INDEBTEDNESS
During fiscal year 1986, William W. Steele and John F. Egan relocated their
personal residences in connection with their employment by the Company. In order
to assist each of them with their relocation, the Company loaned $872,042 to Mr.
Steele and $575,000 to Mr. Egan for the purchase of new personal residences.
Each of these loans is secured by a deed of trust on such residences. These
loans, each of which contained a shared appreciation provision, accrued interest
at the rate of 3% per annum from August 1987 until July 1989, and 4% per annum
from August 1989 to December 31, 1991. Effective January 1, 1992, these loans
were amended to terminate the shared appreciation provisions and to provide for
interest rates of 6% per annum. These loans will mature in 1999 unless
accelerated upon the occurrence of certain specified events such as their
termination of employment with the Company. As of December 31, 1993, the
outstanding principal balances of such loans were $806,362 and $540,598 as to
William W. Steele and John F. Egan, respectively.
On October 28, 1992, the Company loaned $20,000 to John F. Egan pursuant to
a promissory note that accrued interest at 6% per annum and was payable on
January 4, 1993. This loan has been repaid in full.
EXECUTIVE COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Claude M. Ballard, Jr., Maryellen B. Cattani and Theodore Rosenberg serve
as members of the Executive Compensation Committee of the Board of Directors.
Claude M. Ballard, Jr. and Maryellen B. Cattani have no relationships with the
Company other than as directors and stockholders.
Theodore Rosenberg is a former executive officer of the Company, having
retired on December 31, 1989. He is the brother of Sydney J. Rosenberg, the
Company's Chairman of the Board and Chief Executive Officer. Upon Theodore
Rosenberg's retirement as an officer and employee of the Company, a payment of
$100,000 per year for ten years provided for in his earlier employment contract
became payable in equal monthly installments beginning in January 1990. Theodore
Rosenberg continues to provide consulting services to the Company on a
month-to-month basis, for which services he receives a fee of $3,333.33 per
month. See also "Certain Relationships and Related Transactions" herein for a
description of an office lease between the Company and certain members of the
Rosenberg family.
During fiscal 1993, no executive officer of the Company served as a
director or member of the compensation committee of any other for-profit entity
other than subsidiaries of the Company.
EXECUTIVE COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
February 1, 1994
To the Board of Directors:
INTRODUCTION. Based upon its evaluation of the performance of both the
Company and its executive officers, and subject to existing employment
contracts, the Executive Compensation Committee reviews and recommends to the
Board of Directors annual compensation and other terms and conditions of
employment
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for the eleven executive officers of the Company, who are the Chairman of the
Board (Chief Executive Officer); President (Chief Operating Officer); Executive
Vice President (Chief Administrative Officer); seven Vice Presidents; and the
Controller (Chief Accounting Officer).
COMPENSATION POLICY APPLICABLE TO EXECUTIVE OFFICERS. Because the Company
is primarily a service business, the leadership of its executive officers is
crucial to the Company's growth and prosperity. It is the Committee's goal that
the policies underlying the Company's executive compensation programs support
the Company's ultimate goal of enhancing stockholder value by providing
cost-effective service to customers at a profit to the Company. Each executive
officer is compensated through a combination of annual base salary and bonus,
and stock option grants from time to time. Subject to the terms and conditions
of the written employment contracts described below, the Committee reviews the
overall compensation (both annual and long-term) of the executive officers
primarily by evaluating their past performance, expectations as to their future
performance, the Company's profitability and other factors such as length of
service to the Company. To assist it in its review, the Committee retained an
independent executive compensation consultant in 1993 to evaluate the Company's
cash compensation of its executive officers. Based upon the results of the
evaluation undertaken by such consulting firm, the Committee believes that the
Company's annual cash compensation program in general, and the total annual cash
compensation of the Company's executive officers, in particular, are fair and
reasonable. Through the consistent and fair application of its executive
compensation policy, the Company believes it will be able to hire and retain
executives who are most able to contribute to the long-term success of the
Company and the enhancement of stockholder value.
BASE SALARIES AND BONUSES. In November 1991, the Company entered into
written employment contracts with all of its executive officers which set forth
the compensation and other terms and conditions of their employment by the
Company. Each of the executive officers receives cash compensation in the form
of an annual base salary and an annual bonus which is tied directly to the
income before taxes of the Company on a consolidated basis and/or the operating
division(s) of the Company for which the executive officer is responsible. Base
salaries were established in November of 1991, with five percent annual
increases. In some cases, the bonus is a percentage of income for the current
fiscal year, while in other cases, the bonus is a function of both the income
for the current fiscal year and any increase in income over the previous fiscal
year. All such bonuses are calculated and paid after completion of the annual
audit.
The Committee views the bonus portion as an important part of the overall
compensation of each executive officer because it provides the executive
officers with a material stake in the financial performance of the Company
and/or the operating division(s) that they manage. When the bonus formulae were
established in 1991, the then members of the Executive Compensation Committee
expected that such bonuses would in most cases amount to approximately 20% of an
executive officer's annual salary if the Company and/or the applicable operating
division(s) achieved their projected income. Accordingly, a significant portion
of the compensation of each executive officer is related directly to the
Company's profitability and, therefore, to the Company's ultimate goal of
enhancing stockholder value.
The written employment contracts continue until October 31, 1994 for two of
the Company's executive officers, including the Chief Executive Officer. The
written employment contracts of the other nine executive officers of the Company
expired by their terms on October 31, 1993, but were extended for a one year
period by the Committee based on its determination that the total cash
compensation to the executive officers reflected therein was fair and
reasonable. Upon the expiration of all of these contracts in October 1994, the
Committee will evaluate executive compensation in accordance with the policies
described above, focusing on motivating executive officers to attain corporate
and individual performance objectives.
OTHER COMPENSATION. The Company's executive officers are also eligible to
participate in compensation and benefit programs generally available to other
employees on an equal basis, such as the Company's retirement, life and
disability insurance programs. In accordance with the terms of the written
employment contracts, the Company provides its executive officers with certain
perquisites, such as Company-provided automobiles or automobile allowances, an
executive group health plan, club memberships and dues, and incidental personal
benefits.
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BASIS FOR CEO COMPENSATION. The Chief Executive Officer's cash
compensation for fiscal 1993 was determined by such officer's employment
contract. Such executive officer's base salary was increased by five percent for
fiscal year 1994, as provided under the terms of his employment contract. The
Chief Executive Officer, however, has voluntarily elected to receive only a
three percent increase. No unique evaluation factors are utilized with respect
to determining the Chief Executive Officer's compensation.
IRS SECTION 162(M). Section 162(m) of the Internal Revenue Code of 1986
(recently adopted under the Omnibus Budget and Reconciliation Act of 1993)
generally limits a corporation's annual federal tax deduction for compensation
(including stock-based compensation such as options) paid to certain top
executive officers to $1,000,000. Such Section 162(m) does not apply to
executive officer compensation reported and discussed above for fiscal year
1993. As the cash compensation of each of the Company's executive officers for
fiscal 1994 is expected to be far below $1,000,000, the Company has not adopted
an overall policy on qualifying compensation of its executive officers for
deductibility under that Section, but has proposed that the 1987 Stock Option
Plan be amended to limit the number of shares covered by options that may be
granted to any one person to 25,000 shares per fiscal year (see Item 4 of this
Proxy Statement).
Executive Compensation Committee
Claude M. Ballard, Jr., Chairman
Maryellen B. Cattani, Member
Theodore Rosenberg, Member
EXECUTIVE COMPENSATION COMMITTEE REPORT ON STOCK OPTION PLANS
February 1, 1994
To the Board of Directors:
The Executive Compensation Committee administers the Company's stock option
plans and authorizes grants thereunder. The Committee currently has authority to
grant stock options under either the Executive Stock Option Plan (the "1984
Plan") or the 1987 Stock Option Plan (the "1987 Plan").
The Company's stock option plans provide executive officers and other
employees with an opportunity to purchase a proprietary interest in the Company
and thus encourage them to remain employed by the Company. The Committee views
the granting of stock options and the ownership of stock as important mechanisms
for relating overall compensation of executive officers and other employees
directly to the Company's ultimate goal of enhancing stockholder value.
In fiscal 1993, no options were granted under either the 1984 Plan or the
1987 Plan. In December 1993, the Committee authorized the grant of options to
purchase 454,500 shares under the 1987 Plan as of the date of the Annual
Meeting, including the grant to executive officers of options to purchase
150,000 shares. Further information relating to these options is set forth on
page 7 hereof. In determining the number of options to be granted to the
executive officers, the Committee considered each officer's performance, the
Company's overall profitability, the aggregate number of such options that had
been granted in recent years, the fact that no such options had been granted in
fiscal 1993, and other factors such as length of service to the Company.
Executive Compensation Committee
Claude M. Ballard, Jr., Chairman
Maryellen B. Cattani, Member
Theodore Rosenberg, Member
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PERFORMANCE GRAPH
Set forth below is a graph comparing the yearly cumulative total
stockholder return on the Company's Common Stock with the yearly cumulative
total return of (a) the Standard & Poor's 500 and (b) a peer group of companies
that, like the Company, (i) are currently listed on the New York Stock Exchange,
(ii) have been publicly-traded for at least five years and (iii) have a market
capitalization of $150 million to $175 million (based on the most recent
publicly-available number of shares outstanding on January 20, 1994 and the
closing price of shares on December 31, 1993). The peer group consists of the
following companies, in addition to the Company: Allwaste Inc., Anacomp, Inc.,
Cascade Natural Gas Corporation, Daniel Industries Inc., Dravo Corporation,
Elcor Corporation, Fabri-Centers of America, FAI Insurance, Ltd., First Federal
Savings Bank, Puerto Rico, First Union Real Estate Equity and Mortgage
Investments, Firstfed Financial Services Corporation, General Datacomm
Industries Inc., IMO Industries, Inc., MGI Properties, Nashua Corporation, North
Carolina Natural Gas Corporation, Oil Dri Corporation America, Real Estate
Investment Trust of California, Rex Stores Corporation, RLI Corporation,
Southern California Water Co., Statesman Group Inc., SYMS Corporation, TCBY
Enterprises Inc., UNC Inc., Watkins Johnson Co., Willcox & Gibbs Inc. and Wiser
Oil Co.
Although the criteria for selecting companies to be included in the peer
group are the same as the criteria used in last year's proxy statement, the
following companies have been deleted from this year's peer group because either
they fail to meet the market capitalization requirement set forth above or they
are not currently listed on the New York Stock Exchange: Amcast Industrial
Corp., Atmos Energy Corp., Bearings Inc.-Ohio, Burnham Pacific Properties, Inc.,
Coeur D'Alene Mines Corp., Connecticut Energy Corp., Diasonics Inc., Fidelity
National Financial Inc., General Host Corp., Glenfed Inc., Hilb Rogal & Hamilton
Co., Horizon Healthcare Corp., Kent Electronics Corp., Lifetime Corp., Lydall
Inc., National Education Corp., Network Equipment Technologies Inc., Robert Half
International Inc., Starrett L.S. Co., Storage Equities Inc., TNP Enterprises
Inc., Unitrode Corp., Van Dorn Co. and Varco International.
The Company does not believe it can reasonably identify a peer group of
companies on an industry or line-of-business basis for the purpose of developing
a comparative performance index. The building services industry is highly
fragmented, primarily consisting of privately-owned businesses which provide a
limited range of services on a local or regional basis. While the Company is
aware that some other publicly-traded companies market services in one or more
of the Company's nine lines-of-business, none of these other companies provide
most or all of the services offered by the Company, and many offer other
services or products as well. Moreover, some of these other companies that
engage in one or more of the Company's nine lines-of-business do so through
divisions or subsidiaries that are not publicly traded and/or reported. For all
of these reasons, no such comparison would, in the opinion of the Company,
provide a meaningful index of comparative performance.
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The comparisons in the graph below are based on historical data and are not
indicative of, or intended to forecast, the possible future performance of the
Company's Common Stock.
[Graph]
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PRINCIPAL STOCKHOLDERS
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as to the persons or
entities known to the Company to be beneficial owners of more than 5% of the
Company's Common Stock as of December 31, 1993.
NUMBER
NAME AND ADDRESS OF OF
BENEFICIAL OWNER SHARES PERCENT
---------------- -------- -------
Theodore Rosenberg(1)........................... 1,196,920(2) 13.6%
2171 Junipero Serra Boulevard
Daly City, California 94014
Sydney J. Rosenberg(1).......................... 1,149,484(3) 13.1%
9831 West Pico Boulevard
Los Angeles, California 90035
GeoCapital Corporation.......................... 807,450(4) 9.2%
767 Fifth Avenue
New York, New York 10153
- - - ------------
(1) According to the Schedule 13D filed by such persons, Sydney J. and Theodore
Rosenberg may each be deemed to be a member of a group within the meaning of
Section 13(d)(5) of the Securities Exchange Act of 1934, as amended, and
therefore, each may be deemed to own an aggregate of 2,346,404 shares of
Common Stock or approximately 26.7% of the outstanding Common Stock. Subject
to the foregoing, each of Sydney J. and Theodore Rosenberg disclaims
beneficial ownership of shares held by the other.
(2) Includes 15,396 shares of Common Stock held by a family charitable
corporation, of which Theodore Rosenberg is a director. Theodore Rosenberg
disclaims beneficial ownership of such shares.
(3) Includes 21,866 shares of Common Stock held by Sydney J. Rosenberg's wife
and 16,350 shares held by a family charitable corporation, of which Sydney
J. Rosenberg is a director. Sydney J. Rosenberg disclaims beneficial
ownership of such shares. Also includes 8,000 shares issuable upon exercise
of outstanding options exercisable within 60 days of December 31, 1993.
(4) Based on information provided as of December 31, 1993 to the Company by
GeoCapital Corporation. Does not include either 5,000 shares held by a
senior vice president or 2,000 shares held by a senior analyst of such
company, as reported to the Company by GeoCapital Corporation.
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SECURITY OWNERSHIP OF MANAGEMENT
The following table indicates, as to each named executive officer, director
and nominee, and as to all directors and executive officers as a group, the
number of shares and percentage of the Company's Common Stock beneficially owned
as of December 31, 1993.
COMMON STOCK
BENEFICIALLY OWNED AS OF
DECEMBER 31, 1993
---------------------------
NUMBER
OF
SHARES PERCENT(1)
-------- ----------
Claude M. Ballard, Jr....................................... 3,000 *
Jess E. Benton, III......................................... 31,317(2) *
Maryellen B. Cattani........................................ 1,000 *
Robert S. Dickerman......................................... 9,000(3) *
John F. Egan................................................ 83,423(4) *
David H. Hebble............................................. 21,168(5) *
Charles T. Horngren......................................... 6,400(6) *
Felix M. Juda............................................... 65,900(7) *
Martinn H. Mandles.......................................... 74,080(8) *
Sydney J. Rosenberg......................................... 1,149,484(9)(10) 13.1%
Theodore Rosenberg.......................................... 1,196,920(9)(11) 13.6%
William W. Steele........................................... 46,168(12) *
William E. Walsh............................................ 0 *
Executive officers and directors
as a group (17 persons)................................... 2,761,898(13) 30.8%
- - - ------------
* Less than 1.0%
(1) Based on a total of 8,799,404 shares outstanding as of December 31, 1993.
(2) Includes 13,200 shares subject to outstanding options held by Jess E.
Benton, III that were exercisable on or within 60 days after December 31,
1993.
(3) Includes 3,000 shares subject to outstanding options held by Robert S.
Dickerman that were exercisable on or within 60 days after December 31,
1993.
(4) Includes 33,200 shares subject to outstanding options held by John F. Egan
that were exercisable on or within 60 days after December 31, 1993.
(5) Includes 12,400 shares subject to outstanding options held by David H.
Hebble that were exercisable on or within 60 days after December 31, 1993.
(6) Includes 3,000 shares subject to outstanding options held by Charles T.
Horngren that were exercisable on or within 60 days after December 31,
1993.
(7) Includes 27,800 shares held by a family charitable trust of which Mr. Juda
is a trustee. Mr. Juda disclaims beneficial ownership of such shares. Also
includes 3,000 shares subject to outstanding options held by Felix M. Juda
that were exercisable on or within 60 days after December 31, 1993.
(8) Includes 33,368 shares of Common Stock held by the Leo L. Schaumer
Testamentary Trusts, of which Mr. Mandles is Co-Trustee with Bank of
America National Trust and Savings Association. Mr. Mandles disclaims
beneficial ownership of such shares. Also includes 23,200 shares subject to
outstanding options held by Martinn H. Mandles that were exercisable on or
within 60 days after December 31, 1993.
(9) According to the Schedule 13D filed by such persons, Sydney J. Rosenberg
and Theodore Rosenberg may each be deemed to be a member of a group within
the meaning of Section 13(d)(5) of the Securities Exchange Act of 1934, as
amended, and therefore, each may be deemed to own an aggregate of 2,346,404
shares of Common Stock or approximately 26.7% of the outstanding Common
Stock. Subject to the foregoing, each of them disclaims beneficial
ownership of shares held by the other.
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(10) Includes 21,866 shares of Common Stock held by Sydney J. Rosenberg's wife
and 16,350 shares held by a family charitable corporation of which Sydney
J. Rosenberg is a director. Sydney J. Rosenberg disclaims beneficial
ownership of such shares. Also includes 8,000 shares subject to outstanding
options held by Sydney J. Rosenberg that were exercisable on or within 60
days after December 31, 1993.
(11) Includes 15,396 shares of Common Stock held by a family charitable
corporation of which Theodore Rosenberg is a director. Theodore Rosenberg
disclaims beneficial ownership of such shares.
(12) Includes 38,000 shares subject to outstanding options held by William W.
Steele that were exercisable on or within 60 days after December 31, 1993.
(13) Includes 170,200 shares subject to outstanding options held by the
Company's executive officers and directors that were exercisable on or
within 60 days after December 31, 1993.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company leases office space in Los Angeles from several children of
Sydney J. Rosenberg and Theodore Rosenberg pursuant to a lease that expires in
June of 1999. As of December 31, 1993, the aggregate rental payments made under
the lease since its inception were $370,204. The current rental payment for the
leased property is $2,578 per month plus an increase of $62 per month on July 1
of each year. Neither Sydney J. Rosenberg nor Theodore Rosenberg directly or
indirectly receives any proceeds from the lease.
APPOINTMENT OF AUDITORS
KPMG Peat Marwick, independent certified public accountants, have been
selected as the Company's principal accountants for the current year.
Representatives of KPMG Peat Marwick will be present at the Annual Meeting with
the opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions.
OTHER MATTERS
As of the date of this proxy statement, there are no other matters which
the Board of Directors intends to present or has reason to believe others will
present at the Annual Meeting of Stockholders. If other matters properly come
before the Annual Meeting, those persons named in the accompanying proxy will
vote in accordance with their judgment.
1995 ANNUAL MEETING OF STOCKHOLDERS
Stockholders are entitled to present proposals for action at stockholders'
meetings if they comply with the requirements of the proxy rules. In connection
with this year's Annual Meeting, no stockholder proposals were presented. Any
proposals intended to be presented at the 1995 Annual Meeting must be received
at the Company's offices on or before October 16, 1994 in order to be considered
for inclusion in the Company's proxy statement and form of proxy relating to
such meeting.
By Order of the Board of Directors
Harry H. Kahn, Esq.
Vice President, General Counsel and
Secretary
February 14, 1994
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EXHIBIT A
AMERICAN BUILDING MAINTENANCE INDUSTRIES, INC.
1985 EMPLOYEE STOCK PURCHASE PLAN
The purpose of this 1985 Employee Stock Purchase Plan (the "Plan") is to
provide employees the opportunity to purchase American Building Maintenance
Industries, Inc.'s Common Stock through annual offerings to be made until April
30, 1997. An aggregate of 2,500,000 shares of such stock may be issued under the
Plan (the "Shares").
1. ELIGIBILITY. Only employees of American Building Maintenance
Industries, Inc. (the "Corporation") and its subsidiary corporations will be
eligible to participate in the Plan. All such employees will be eligible to
participate, except employees who own or hold options to purchase or who, as a
result of participation in this Plan, would own or hold options to purchase,
stock of the Corporation possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Corporation and
any current or future parent and/or subsidiary corporation(s) of the
Corporation. An employee shall be considered as owning stock owned, directly or
indirectly, by or for his brothers and sisters (whether by the whole or half
blood), spouse, ancestors and lineal descendants. Stock owned, directly or
indirectly, by or for a corporation, partnership, estate or trust shall be
considered as being owned proportionately by or for its shareholders, partners
or beneficiaries. Stock which an employee may purchase under outstanding options
shall be treated as stock owned by the employee.
2. OFFERINGS. The Plan shall be implemented by granting eligible
employees the right to purchase Shares (an "Offering") during offering periods
of one (1) year duration (each such period being referred to herein as an
"Offering Period") commencing at such times as the Corporation shall determine.
The first working day during an Offering Period shall be the "Offering Date" for
such Offering Period.
3. PARTICIPATION. An employee eligible on the Offering Date of any
Offering may participate in such Offering by completing and forwarding a Payroll
Deduction Authorization for Purchase of ABM Stock form ("Payroll Deduction
Authorization Form") to the Payroll Department at such employee's branch
location on or before the Offering Date. The form will authorize a regular
payroll deduction from the employee's compensation.
Unless otherwise indicated, a participating employee shall automatically
participate in the first Offering which commences immediately after the
expiration of each Offering in which such employee acquires Shares upon
expiration of the standard one (1) year Offering Period. A participating
employee is not required to file an additional Payroll Deduction Authorization
Form in order to automatically participate therein. Unless otherwise indicated
in an additional Payroll Deduction Authorization Form, the rate at which payroll
deductions shall be accumulated with respect to any such subsequent Offering
shall equal the rate applicable to the previously expired Offering. Any balance
in an employee's payroll deduction account at the end of an Offering will remain
in the employee's account as funds available for the purchase of shares in the
subsequent Offering.
4. DEDUCTIONS. The Corporation will maintain payroll deduction accounts
for all participating employees. With respect to any Offering made under this
Plan, an employee may authorize a payroll deduction up to a maximum of 10% of
the compensation he receives during the Offering Period specified for the
Offering (or during such portion thereof as he may elect to participate). As a
minimum, an employee must authorize a payroll deduction which, based on his rate
of pay at the time of such authorization, would enable him by the end of the
Offering Period to accumulate in his account an amount equal to at least the
Offering Price (as defined below) of ten Shares for that Offering.
5. DEDUCTION CHANGES. An employee may at any time increase or decrease
his payroll deduction by filing a new Payroll Deduction Authorization Form. The
change will become effective for the next pay period after receipt of the form.
A payroll deduction may be increased only once and reduced only once during any
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Offering Period. An employee will be deemed to have withdrawn from an Offering
if such employee reduces the payroll deduction amount to zero.
6. WITHDRAWAL OF FUNDS. An employee may at any time and for any reason
draw out the balance accumulated in his account, and thereby withdraw from
participation in an Offering. He may not thereafter participate during the
remainder of the Offering Period specified for the Offering. Partial withdrawals
will not be permitted.
7. PURCHASE OF SHARES. Each employee participating in any Offering under
this Plan will be granted, upon the Offering Date of such Offering, a right to
purchase as many full Shares (but not less than ten) as he may elect to purchase
for up to 10% of compensation received during the specified Offering Period to
be paid by payroll deductions during such period, provided that the maximum
number of Shares which may be purchased in any Offering shall be equal to the
number obtained by dividing the employee's annual compensation on the Offering
Date of such Offering by the fair market value of one Share on the Offering Date
of such Offering.
The purchase price for each Share purchased under any Offering will be the
lesser of:
(a) 85% of the fair market value of one Share on the Offering Date of
such Offering (the "Offering Price"), or
(b) 85% of the fair market value of one Share on the day on which the
right to purchase is exercised and the Shares are purchased pursuant to the
terms of this Plan (the "Alternate Offering Price").
As of the last working day of each calendar month during any Offering, the
account of each participating employee shall be totalled. When a participating
employee shall have sufficient funds in his account to purchase ten or more
Shares at the lesser of either the Offering Price or the Alternate Offering
Price as of that date, the employee shall be deemed to have exercised his right
to purchase the number of full Shares purchasable with the funds in his account
at such price, his account shall be charged for the amount of the purchase, and
a stock certificate shall be issued to him as of such day. Subsequent Shares
covered by the employee's right to purchase will be purchased in the same manner
whenever sufficient funds have again accrued in his account.
Payroll deductions may be made under each Offering to the extent authorized
by the employee, subject to the maximum and minimum limitations imposed for each
such Offering. A separate employee account will be maintained with respect to
each Offering.
A participating employee may not purchase shares under any Offering beyond
12 months from the Offering Date thereof. Any balance in an employee's account
at the end of 12 months from the Offering Date of any Offering which is not
sufficient to purchase ten Shares will, unless otherwise indicated, remain in
the employee's account for the purchase of shares in the next Offering.
8. LIMITATION TO PURCHASE OF SHARES. Anything contained in this Plan
notwithstanding, no employee may be granted a right to purchase which permits
such employee's rights to purchase stock under all employee stock purchase plans
of the Corporation and its parent and subsidiary corporations to accrue at a
rate which exceeds $25,000 of fair market value of such stock (determined at the
time such right to purchase is granted) for each calendar year in which such
right to purchase is outstanding at any time. For this purpose (a) the right to
purchase stock accrues when such right (or any portion thereof) first becomes
exercisable during the calendar year; (b) the right to purchase stock accrues at
the rate provided in the Offering, but in no case may such rate exceed $25,000
of fair market value of such stock (determined at the time such right to
purchase is granted) for any one calendar year; and (c) a right to purchase
which has accrued under one Offering may not be carried over to any other
Offering.
9. REGISTRATION OF CERTIFICATES. Stock Certificates may be registered
only in the name of the employee, or if he so indicates on his Payroll Deduction
Authorization Form, in his name jointly with a member of his family with rights
of survivorship, in the name of a family trust, or in the name of a family
member pursuant to a gift which satisfies the requirements of the Uniform Gifts
to Minors Act. An employee who is a resident of a
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jurisdiction which does not recognize such a joint tenancy may have certificates
registered in his name as tenant in common with a member of his family, without
right of survivorship.
10. DEFINITIONS.
"Working Day" means a day other than a Saturday, Sunday or scheduled
holiday.
"Fair Market Value" means the average of the high and low prices of the
Corporation's common stock composite transactions on the New York Stock Exchange
on a given day, or if no sales were made on that day, the average of the high
and low prices on the next preceding day on which sales are made.
"Parent corporation" means a corporation described in Section 424(e) of the
Internal Revenue Code of 1986, as amended (the "Code").
"Subsidiary corporation" means a corporation described in Section 424(f) of
the Code.
The Plan is intended to be an "employee stock purchase plan" as defined in
Section 423 of the Code and its provisions shall be interpreted in a manner
consistent with this intent.
11. RIGHTS AS A STOCKHOLDER. None of the rights or privileges of a
stockholder of the Corporation shall exist with respect to Shares purchased
under this Plan unless and until certificates representing such Shares shall
have been issued.
12. RIGHTS ON RETIREMENT, DEATH OR TERMINATION OF EMPLOYMENT. In the
event of a participating employee's retirement, death, or termination of
employment, no payroll deduction shall be taken from any pay due and owing to
him at such time and the balance in his account shall be paid to him, or, in the
event of death, to his estate.
13. RIGHTS NOT TRANSFERABLE. Rights granted under this Plan are not
transferable by a participating employee other than by will or the laws of
descent and distribution, and are exercisable during his lifetime only.
14. APPLICATION OF FUNDS. Funds received or held by the Corporation under
this Plan may be used for any corporate purpose.
15. ADJUSTMENT IN CASE OF CHANGES AFFECTING THE STOCK. In the event of a
subdivision of outstanding shares, or the payment of a stock dividend, the
number of shares reserved or authorized to be reserved under this Plan,
including shares covered by outstanding grants to participating employees, shall
be increased proportionately, and the Offering Price for each participant at
such time reduced proportionately, and such other adjustment shall be made as
may be deemed equitable by the Board of Directors. In the event of any other
change affecting the Corporation's common stock, such adjustment shall be made
as may be deemed equitable by the Board of Directors to give proper effect to
such event.
16. AMENDMENT OF THE PLAN. The Board of Directors may at any time, or
from time to time, amend this Plan in any respect, except that, to the extent
required to maintain this Plan's qualification under Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended, any such amendment shall
be subject to stockholder approval.
17. TERMINATION OF THE PLAN. This Plan and all rights of employees under
any Offering hereunder shall terminate:
(a) on the day that participating employees become entitled to
purchase a number of Shares equal to or greater than the number of Shares
remaining available for purchase. If the number of Shares so purchasable is
greater than the Shares available, Shares shall be allocated on a pro rata
basis among such participating employees; or
(b) at any time, at the discretion of the Board of Directors of the
Corporation.
No Offering hereunder shall be made under which the Offering Period shall extend
beyond April 30, 1997. Upon termination of this Plan, all amounts in the
accounts of participating employees shall be promptly refunded.
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18. ADMINISTRATION. The Plan will be administered by the Executive
Compensation Committee of the Board of Directors. The Committee will have
authority to make rules and regulations for the administration of the Plan. Its
interpretations and decisions with regard thereto shall be final and conclusive.
19. GOVERNMENTAL REGULATIONS. The Corporation's obligation to sell and
deliver its Common Stock under this Plan is subject to the approval of any
governmental authority required in connection with the authorization, issuance
or sale of such stock.
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EXHIBIT B
AMERICAN BUILDING MAINTENANCE INDUSTRIES, INC.
1987 STOCK OPTION PLAN
ARTICLE I
GENERAL
1. PURPOSE.
This 1987 Stock Option Plan (the "Plan") is intended to increase incentive
and to encourage stock ownership on the part of nonemployee directors of
American Building Maintenance Industries, Inc. (the "Company") and selected key
employees of the Company or of other corporations which are or become
subsidiaries of the Company, and other individuals whose efforts may aid the
Company. It is also the purpose of the Plan to provide such employees and other
individuals with a proprietary interest, or to increase their proprietary
interest, in the Company and its subsidiaries, and to encourage them to remain
in the employ of the Company or its subsidiaries. It is intended that certain
options granted pursuant to the Plan shall constitute incentive stock options
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), and that certain other options granted pursuant to the
Plan shall not constitute incentive stock options ("nonqualified stock
options").
2. ADMINISTRATION.
The Plan shall be administered by the Executive Compensation Committee (the
"Committee") of the Board of Directors of the Company (the "Board"). The
Committee shall from time to time at its discretion make determinations with
respect to the persons to whom options shall be granted and the amount of such
options. The Committee shall consist of not fewer than three members of the
Board. Each member of the Committee shall be a "disinterested person" as defined
in Rule 16b-3 under the Securities Exchange Act of 1934, as amended ("Rule
16b-3").
The interpretation and construction by the Committee of any provisions of
the Plan or of any option granted under it shall be final. No member of the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any option granted under it.
3. ELIGIBILITY.
Subject to Section 2 of this Article I, the persons who shall be eligible
to receive options under the Plan shall be such officers and key employees
(including directors who are also salaried employees of the Company) of the
Company as the Committee shall select. In addition, independent contractors of
the Company who are not also salaried employees of the Company shall be eligible
to receive nonqualified stock options (but such persons shall not be eligible to
receive incentive stock options). The terms "officers and key employees" as used
herein shall mean such key employees as may be determined by the Committee in
its sole discretion. Directors of the Company who are not employees of the
Company nor of any of its subsidiary corporations ("nonemployee directors")
shall be eligible only for the options automatically granted pursuant to Article
V.
Except where the context otherwise requires, the term "Company," as used
herein, shall include (i) American Building Maintenance Industries, Inc. and
(ii) any of its "subsidiary corporations" which meet the definition of
subsidiary corporation contained in Section 424(f) of the Code, and the terms
"officers and key employees of the Company," and words of similar import, shall
include officers and key employees of each such subsidiary corporation, as well
as officers and key employees of American Building Maintenance Industries, Inc.
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4. SHARES OF STOCK SUBJECT TO THE PLAN.
The shares that may be issued under the Plan shall be authorized and
unissued or reacquired shares of the Company's common stock (the "Common
Stock"). The aggregate number of shares which may be issued under the Plan shall
not exceed 1,100,000 shares of Common Stock, unless an adjustment is required in
accordance with Article III.
5. AMENDMENT OF THE PLAN.
The Board of Directors may at any time, or from time to time, amend this
Plan in any respect, except that, to the extent required to maintain this Plan's
qualification under Rule 16b-3, any such amendment shall be subject to
stockholder approval. In addition, as required by Rule 16b-3, the provisions of
Article V regarding the formula for determining the amount, exercise price, and
timing of nonemployee director options shall in no event be amended more than
once every six months, other than to comport with changes in the Code and/or the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"). (ERISA is
inapplicable to the Plan.)
6. APPROVAL OF STOCKHOLDERS.
All options granted under the Plan before the Plan is approved by
affirmative vote at the next meeting of stockholders of the Company, or any
adjournment thereof, of the holders of a majority of the outstanding shares of
Common Stock shall be subject to such approval. No option granted hereunder may
become exercisable unless and until such approval is obtained.
7. TERM OF PLAN.
Options may be granted under the Plan until December 31, 1996, the date of
termination of the Plan. Notwithstanding the foregoing, each option granted
under the Plan shall remain in effect until such option has been satisfied by
the issuance of shares or terminated in accordance with its terms and the terms
of the Plan.
8. RESTRICTIONS.
All options granted under the Plan shall be subject to the requirement
that, if at any time the Committee shall determine, in its discretion, that the
listing, registration or qualification of the shares subject to options granted
under the Plan upon any securities exchange or under any state or federal law,
or the consent or approval of any government regulatory body, is necessary or
desirable as a condition of, or in connection with, the granting of such option
or the issuance, if any, or purchase of shares in connection therewith, such
option may not be exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Committee.
9. NONASSIGNABILITY.
No option shall be assignable or transferable by the grantee except by will
or by the laws of descent and distribution. During the lifetime of the optionee,
the option shall be exercisable only by him, and no other person shall acquire
any rights therein.
10. WITHHOLDING TAXES.
Whenever shares of Common Stock are to be issued under the Plan, the
Company shall have the right to require the optionee to remit to the Company an
amount sufficient to satisfy federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for such
shares.
11. DEFINITION OF "FAIR MARKET VALUE."
For the purposes of this Plan, the term "fair market value," when used in
reference to the date of grant of an option or the date of surrender of Common
Stock in payment for the purchase of shares pursuant to the exercise of an
option, as the case may be, shall refer to the mean between the highest and
lowest sale prices of
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the Common Stock as quoted in the Composite Transactions Index for the New York
Stock Exchange, on such date as published in the "Wall Street Journal" and
determined by the Committee, or if no sale price was quoted in any such Index on
such date, then as of the next preceding date on which such a sale price was
quoted.
ARTICLE II
STOCK OPTIONS
1. AWARD OF STOCK OPTIONS.
Awards of stock options may be made under the Plan under all the terms and
conditions contained herein. However, in the cases of incentive stock options
the aggregate fair market value (determined as of the date of grant) of the
stock with respect to which incentive stock options are exercisable for the
first time by such officer or key employee during any calendar year (under all
incentive stock option plans of the Company and its parent and subsidiary
corporations) shall not exceed $100,000. The date on which any option is granted
shall be the date of the Committee's authorization of such grant or such later
date as may be determined by the Committee at the time such grant is authorized.
2. TERM OF OPTIONS AND EFFECT OF TERMINATION.
Notwithstanding any other provision of the Plan, no nonqualified stock
option granted under the Plan shall be exercisable after the expiration of ten
(10) years and one (1) month from the date of its grant, and no incentive stock
option granted under the Plan shall be exercisable after the expiration of ten
(10) years from the date of grant. In addition, notwithstanding any other
provision of the Plan, no incentive stock option granted under the Plan to a
person who, at the time such option is granted and in accordance with Section
425(d) of the Code, owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company shall be exercisable after
the expiration of five (5) years from the date of its grant.
In the event that any outstanding option under the Plan expires by reason
of lapse of time or otherwise is terminated for any reason, then the shares of
Common Stock subject to any such option which have not been issued pursuant to
the exercise of the option shall again become available in the pool of shares of
Common Stock for which options may be granted under the Plan.
3. CANCELLATION OF AND SUBSTITUTION FOR NONQUALIFIED OPTIONS.
The Company shall have the right to cancel any nonqualified stock option at
any time before it otherwise would have expired by its terms and to grant to the
same optionee in substitution therefor a new nonqualified stock option stating
an option price which is lower (but not higher) than the option price stated in
the cancelled option. Any such substituted option shall contain all other terms
and conditions of the cancelled option provided, however, that notwithstanding
Section 2 of this Article II such substituted option shall not be exercisable
after the expiration of ten (10) years from the date of grant of the cancelled
option.
4. TERMS AND CONDITIONS OF OPTIONS.
Options granted pursuant to the Plan shall be evidenced by agreements in
such form as the Committee shall from time to time determine, which agreements
shall comply with the following terms and conditions.
(A) OPTIONEE'S AGREEMENT
Each optionee shall agree to remain in the employ of and to render to the
Company his services for a period of one (1) year from the date of the option,
but such agreement shall not impose upon the Company any obligation to retain
the optionee in its employee for any period.
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(B) NUMBER OF SHARES AND TYPE OF OPTION
Each option agreement shall state the number of shares to which the option
pertains and whether the option is intended to be an incentive stock option or a
nonqualified stock option. Notwithstanding any contrary provision of the Plan,
during any single fiscal year of the Company, no individual shall be granted
options covering more than 25,000 shares of Common Stock.
(C) OPTION PRICE
Each option agreement shall state the option price per share (or the method
by which such price shall be computed). The option price per share shall not be
less than 99% of the fair market value of a share of the Common Stock on the
date such option is granted. In the cases of incentive stock options and options
granted to non-employee directors pursuant to Article V hereof, the option price
shall be not less than 100% of the fair market value of a share of the Common
Stock on the date such option is granted. Notwithstanding the foregoing, the
option price per share of an incentive stock option granted to a person who, on
the date of such grant and in accordance with Section 424(d) of the Code, owns
stock possessing more than 10% of the total combined voting power of all classes
of stock of the Company shall be not less than 110% of the fair market value of
a share of the Common Stock on the date that the option is granted.
(D) MEDIUM AND TIME OF PAYMENT
The option price shall be payable upon the exercise of an option in the
legal tender of the United States or, in the discretion of the Committee, in
shares of the Common Stock or in a combination of such legal tender and such
shares. Upon receipt of payment, the Company shall deliver to the optionee (or
person entitled to exercise the option) a certificate or certificates for the
shares of Common Stock to which the option pertains.
(E) EXERCISE OF OPTIONS
Pursuant to the terms of a written option agreement approved by the
Committee, each option shall become exercisable at a rate of twenty percent
(20%) per year of the shares subject to the option, commencing one year after
the date that the option was granted, but only if the optionee has been
continuously employed by the Company from the date of grant through the date of
vesting. The Committee may, in its discretion, waive any vesting provisions
contained in an option agreement.
To the extent that an option has become vested (except as provided in
Article III), and subject to the foregoing restrictions, it may be exercised in
whole or in such lesser amount as may be authorized by the option agreement
provided, however, that no partial exercise of an option shall be for fewer than
twenty-five (25) shares. If exercised in part, the unexercised portion of an
option shall continue to be held by the optionee and may thereafter be exercised
as herein provided.
(F) TERMINATION OF EMPLOYMENT EXCEPT BY DISABILITY OR DEATH
In the event that an optionee shall cease to be employed by the Company for
any reason other than his death or disability, his option shall terminate on the
date three (3) months after the date that he ceases to be an employee of the
Company.
(G) DISABILITY OF OPTIONEE
If an optionee shall cease to be employed by the Company by reason of his
becoming permanently and totally disabled within the meaning of Section 22(e)(3)
of the Code (as determined by the Committee), such option shall terminate on the
date one (1) year after cessation of employment due to such disability.
(H) DEATH OF OPTIONEE AND TRANSFER OF OPTION
If an optionee should die while in the employ of the Company, or within the
three-month period after termination of his employment with the Company during
which he is permitted to exercise an option in
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accordance with Subsection 4(F) of this Article II, such option shall terminate
on the date one (1) year after the optionee's death. During such one-year
period, such option may be exercised by the executors or administrators of the
optionee's estate or by any person or persons who shall have acquired the option
directly from the optionee by his will or the applicable law of descent and
distribution. During such one-year period, such option may be exercised with
respect to the number of shares for which the deceased optionee would have been
entitled to exercise it at the time of his death and also with respect to 10
percent of the additional number of shares for which he would have been entitled
to exercise it during the balance of the option period, had he survived and
remained in the employ of the Company.
ARTICLE III
RECAPITALIZATIONS AND REORGANIZATIONS
The number of shares of Common Stock covered by the Plan, the maximum
number of shares with respect to which options may be granted during any single
fiscal year to any employee, and the number of shares and price per share of
each outstanding option, shall be proportionately adjusted for any increase or
decrease in the number of issued and outstanding shares of Common Stock
resulting from a subdivision or consolidation of shares or the payment of a
stock dividend, or any other increase or decrease in the number of issued and
outstanding shares of Common Stock effected without receipt of consideration by
the Company.
If the Company shall be the surviving corporation in any merger or
consolidation, each outstanding option shall pertain (unless the Committee
determines the provisions of the following sentence are applicable to such
merger or consolidation) to and apply to the securities to which a holder of the
same number of shares of Common Stock that are subject to that option would have
been entitled. A dissolution or liquidation of the Company, a merger or
consolidation in which the Company is not the surviving corporation or a "change
in control" of the Company (as defined below) (each a "Terminating
Transaction"), shall cause each outstanding option to terminate, unless the
agreement of merger or consolidation or any agreement relating to a dissolution,
liquidation or change in control shall otherwise provide, provided that each
optionee in the event of a Terminating Transaction which will cause his option
to terminate shall have the right immediately prior to such Terminating
Transaction to exercise his option in whole or in part, subject to every
limitation on the exercisability of such option other than any vesting
provisions. For purposes hereof, a "change of control" shall be deemed to have
occurred when (i) a person or group of persons acquires fifty percent (50%) or
more of the Company's voting securities, and (ii) the Board of Directors of the
Company or the Committee shall have determined that such a "change of control"
has occurred or the criteria for a "change of control," as established by the
Board or Committee, has been satisfied.
The foregoing adjustments shall be made by the Committee, whose
determination in that respect shall be final, binding and conclusive.
The grant of an option pursuant to the Plan shall not affect in any way the
right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge or
to consolidate or to dissolve, liquidate or sell, or transfer all or any part of
its business or assets.
ARTICLE IV
MISCELLANEOUS PROVISIONS
1. RIGHTS AS A STOCKHOLDER.
An optionee or a transferee of an option shall have no rights as a
stockholder with respect to any shares covered by an option until the date of
the receipt of payment (including any amounts required by the Company pursuant
to Section 10 of Article I) by the Company. No adjustment shall be made as to
any option for dividends (ordinary or extraordinary, whether in cash, securities
or other property) or distributions or other rights for which the record date is
prior to such date of receipt of payment, except as provided in Article III.
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2. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS.
Subject to the terms and conditions and within the limitations of the Plan,
the Committee may modify, extend, renew or cancel outstanding options granted
under the Plan. Notwithstanding the foregoing, however, no modification of an
option shall, without the consent of the optionee impair or diminish any rights
or obligations under any option theretofore granted under the Plan. For purposes
of the preceding sentence, the right of the Company pursuant to Section 3 of
Article II to cancel any outstanding nonqualified option and to issue therefor a
substituted nonqualified option stating a lower option price shall not be
construed as impairing or diminishing an optionee's rights or obligations.
3. OTHER PROVISIONS.
The option agreements authorized under the Plan shall contain such other
provisions, including, without limitation, restrictions upon the exercise of the
option or restrictions required by any applicable securities laws, as the
Committee shall deem advisable.
4. APPLICATION OF FUNDS.
The proceeds received by the Company from the sale of Common Stock pursuant
to the exercise of options will be used for general corporate purposes.
5. NO OBLIGATION TO EXERCISE OPTION.
The granting of an option shall impose no obligation upon the optionee or a
transferee of the option to exercise such option.
ARTICLE V
NONEMPLOYEE DIRECTOR OPTIONS
The provisions of this Article V are applicable only to options granted to
nonemployee directors. The provisions of Article II are applicable to options
granted to other individuals.
1. GRANTING OF OPTIONS.
Each nonemployee director who is a nonemployee director on the date of the
1994 Annual Meeting of Stockholders, automatically will receive, as of such date
only, an option to purchase 2,000 shares of Common Stock.
Each nonemployee director who becomes a nonemployee director after the 1994
Annual Meeting of Stockholders automatically will receive, as of the date of
such nonemployee director's election or appointment to the Board of Directors of
the Company, an option to purchase 2,000 shares of Common Stock.
Each continuing nonemployee director (i.e., a nonemployee director who has
received an initial grant of an option to purchase 2,000 shares of Common Stock)
automatically will receive, on the first day of each subsequent fiscal year, an
option to purchase 2,000 shares of Common Stock.
2. TERMS OF OPTIONS.
(A) OPTION AGREEMENT
Each option shall be evidenced by a written stock option agreement which
shall be executed by the optionee and the Company.
(B) OPTION PRICE
The price of the shares subject to each option shall be 100% of the fair
market value for such shares on the date that the option is granted.
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(C) EXERCISABILITY
An option granted pursuant to this Article V shall become exercisable at a
rate of twenty percent (20%) per year of the shares subject to the option,
commencing one year after the date that the option was granted, but only if the
optionee has been a nonemployee director continuously from the date of grant
through the date of vesting.
(D) EXPIRATION OF OPTIONS
In the event that an optionee shall cease to be a nonemployee director for
any reason other than his death or disability, his option shall terminate on the
date three (3) months after the date that he ceases to be a nonemployee
director.
If an optionee shall cease to be a nonemployee director by reason of his
becoming permanently and totally disabled within the meaning of Section 22(e)(3)
of the Code (as determined by the Committee), such option shall terminate on the
date one (1) year after his cessation of service as a nonemployee director.
If an optionee should die while a nonemployee director, or within the
three-month period described above in this Subsection 2(D), such option shall
terminate on the date one (1) year after the optionee's death. During such
one-year period, such option may be exercised by the executors or administrators
of the optionee's estate or by any person or persons who shall have acquired the
option directly from the optionee by his will or the applicable law of descent
and distribution. During such one-year period, such option may be exercised with
respect to the number of shares for which the deceased optionee would have been
entitled to exercise it at the time of his death and also with respect to 10
percent of the additional number of shares for which he would have been entitled
to exercise it during the balance of the option period, had he survived and
remained a nonemployee director.
(E) INCENTIVE STOCK OPTIONS.
Options granted pursuant to this Article V shall not be designated as
incentive stock options.
(F) OTHER TERMS.
All provisions of the Plan not inconsistent with this Article V shall apply
to options granted to nonemployee directors.
B-7
32
AMERICAN BULDING MAINTENANCE INDUSTRIES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
MARCH 15, 1994
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
AMERICAN BUILDING MAINTENANCE INDUSTRIES, INC.
The undersigned hereby appoints Harry H. Kahn, Sydney J. Rosenberg and
Theodore Rosenberg, and each of them, proxies for the undersigned, with full
power of substitution, to vote all shares of American Building Maintenance
Industries, Inc. capital stock which the undersigned may be entitled to vote at
the Annual Meeting of Stockholders of American Building Maintenance Industries,
Inc. at 50 Fremont Street, San Francisco, California, on Tuesday, March 15,
1994 at 10:00 a.m., or at any adjournment thereof, upon the matters set forth
on the reverse side and described in the accompanying Proxy Statement and upon
such other business as may properly come before the meeting or any adjournment
thereof.
PLEASE MARK THIS PROXY AS INDICATED ON THE REVERSE SIDE TO VOTE ON ANY
ITEM. IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS'
RECOMMENDATIONS, PLEASE SIGN THE REVERSE SIDE; NO BOXES NEED TO BE CHECKED.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
Please mark
[X] your votes
as this
---------- ----------
COMMON PREFERRED
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR ITEMS 1, 2, 3 AND 4. WITHHELD
Item 1-ELECTION OF DIRECTORS FOR FOR ALL
Nominees: Martinn H. Mandles, [ ] [ ]
Sydney J. Rosenberg, Theodore
Rosenberg and William W. Steele
WITHHELD FOR: (Write that nominee's name
in the space provided below).
- - - ----------------------------------------
FOR AGAINST ABSTAIN
Item 2-AMENDMENT OF CERTIFICATION OF [ ] [ ] [ ]
INCORPORATION RE: NAME CHANGE
FOR AGAINST ABSTAIN
Item 3-APPROVAL OF AMENDMENTS TO 1985 [ ] [ ] [ ]
EMPLOYEE STOCK PURCHASE PLAN
Item 4-APPROVAL OF AMENDMENTS TO 1987 [ ] [ ] [ ]
STOCK OPTION PLAN
ADDRESS CHANGE. Please mark this box
if you have an address change and
indicate such change below. [ ]
Receipt is hereby acknowledged of the American
Building Maintenance Industries, Inc.
Notice of Meeting and Proxy Statement.
Signature(s) Date
---------------------------------------- --------------
NOTE: PLEASE SIGN AS NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH SIGN.
WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE
GIVEN FULL TITLE AS SUCH.
