EX-10.5: SERVICE AWARD BENEFIT PLAN
EX-10.5 7 y71046exv10w5.htm EX-10.5: SERVICE AWARD BENEFIT PLAN EX-10.5
Exhibit 10.5
ABM INDUSTRIES INCORPORATED
SERVICE AWARD BENEFIT PLAN
SERVICE AWARD BENEFIT PLAN
As Amended and Restated June 3, 2008
TABLE OF CONTENTS
ARTICLE 1 | ||||
NAME, EFFECTIVE DATE, PURPOSE AND CONSTRUCTION | 1 | |||
ARTICLE 2 | ||||
DEFINITIONS | 2 | |||
ARTICLE 3 | ||||
ELIGIBILITY, PARTICIPATION AND BENEFICIARY DESIGNATION | 3 | |||
ARTICLE 4 | ||||
BENEFITS | 4 | |||
ARTICLE 5 | ||||
FORFEITURES OF BENEFITS | 5 | |||
ARTICLE 6 | ||||
PARTICIPANTS ACCOUNTS | 6 | |||
ARTICLE 7 | ||||
DISTRIBUTION OF BENEFITS | 7 | |||
ARTICLE 8 | ||||
FIDUCIARY RESPONSIBILITY | 8 | |||
ARTICLE 9 | ||||
ADMINISTRATIVE COMMITTEE | 9 |
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ARTICLE 10 | ||||
AMENDMENT AND TERMINATION | 12 |
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ARTICLE 1
NAME, EFFECTIVE DATE, PURPOSE AND CONSTRUCTION
1.1 Plan Name. The Plan set forth in this document shall be designated the ABM Industries Incorporated Service Award Benefit Plan.
1.2 Effective Date. The Effective Date of this Plan was November 1, 1989. This document reflects amendments and changes made through April 6, 2005.
1.3 Purpose. The Plan is intended to qualify as a severance pay plan described in Department of Labor Regulations 2510.3-1 (a) (2) and 2510.3-2 (b) and is intended to be treated as a employee welfare plan under ERISA. The Plan is intended to provide benefits to terminating employees based upon their loyal and dedicated service to the Company and its Affiliates.
1.4 Construction. The following miscellaneous provisions shall apply in the construction of this Plan document:
(a) State Jurisdiction. All matters respecting the validity, effect, interpretation and administration of this Plan shall be determined in accordance with the laws of the State of California except where preempted by ERISA or other federal statutes.
(b) Gender. Wherever appropriate, words used in the singular may include the plural or the plural may be read as the singular, the masculine may include the feminine, and the neuter may include both the masculine and the feminine.
(c) Application of References to Law. All references to sections of ERISA, or the Internal Revenue Code, other federal or state statutes, any regulations or rulings thereunder, shall be deemed to refer to such sections as they may subsequently be modified, amended, replaced or amplified by any federal statutes, regulations or rulings of similar application and import enacted by the Government of the United States, any duly authorized agency of the United States Government, any State Government or duly authorized agency thereunder.
(d) Enforceable Provisions Remain Effective. If any provision of this Plan shall be held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions of this Plan shall continue to be fully effective.
(e) Headings. Headings are inserted for reference only and constitute no part of the construction of this Plan.
1.5 Employment Relationship Not Affected. Nothing in this Plan document shall be deemed a contract between the Employer and any Employee, nor shall the rights or obligations of the Employer or any Employee to continue or terminate employment at any time be affected hereby.
ARTICLE 2
DEFINITIONS
2.1 Account means the aggregate of all records maintained by the Committee for purposes of determining a Participants or Beneficiarys benefits under the Plan.
2.2 Affiliated Employer means any corporation which is so designated by the Board, which may include any corporation or business determined to be affiliated under Code Section 414 or any other corporation or business which is affiliated to some degree with the Employer.
2.3 Award Date means October 31, 1990, each succeeding October 31 and any other date elected by the Board at its discretion. Effective January 1, 1991, Award Date shall mean December 31, 1991 and each succeeding December 31.
2.4 Beneficiary means any person designated by a Participant.
2.5 Board shall mean the Board of Directors of the Employer.
2.6 Code means the Internal Revenue code of 1986, as amended (and regulations issued thereunder).
2.7 Committee means the Administrative Committee designated under Article 9.
2.8 Compensation for any calendar year means all amounts paid to the Employee and reported as wages on the Employees form W-2 for the year for services rendered for the Employer or Affiliated Employers during the calendar year, and all amounts which an Employee elected to have the Employer or affiliated Employer contribute on his behalf to the ABM 401(k) Employee Savings Plan or the ABM Deferred Compensation Plan for the calendar year. Compensation in excess of $175,000 shall not be considered in the calculation of benefits; provided, however, the $175,000 limit shall not replace any limit in place for any year prior to 1996 under this Plan.
2.9 Date of Eligibility shall mean (1) for Eligible Employees hired after October 31, 1989, the date on which the Employee first performs any service for the Employer, (2) for Eligible Employees employed on or before October 31, 1989, November 1, 1989. Effective January 1, 1992, Date of Eligibility shall mean the January 1 following the date on which the Employee has Compensation in excess of $50,000, or such other dollar amount as the Committee may from time to time announce.
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2.10 Date of Hire shall mean the date on which the Employee becomes an employee of the Employer or an Affiliated Employer within the meaning of Code Section 3121(d).
2.11 Disability shall mean the Participant is (1) unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (2) by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Participants Employer.
2.12 Eligible Employee shall have the meaning as defined in Article 3.
2.13 Eligible Participant shall mean:
(a) An Eligible Employee who was employed continuously throughout the Fiscal Year, or
(b) an Eligible Employee who terminated employment during the Fiscal Year due to death, disability or after having reached his Normal Retirement Date.
2.14 Employee means any person considered under the rules of common law or appropriate statute to be employed by the Employer or an Affiliated Employer, except:
(a) Employees whose wages are determined by collective bargaining agreements,
(b) Employee Employees who are receiving pension contributions under a union retirement plan, and
(c) Contract workers of the Employer or an Affiliated Employer who are employed to perform principally manual work, including but not limited to elevator operator, janitor, security worker, guard, window washer, stationary engineer, painter, warehouseman, driver, parking attendant, mechanic, electrician, laundry worker or service technician.
2.15 Employer means ABM Industries Incorporated, a Delaware corporation, and such of its successors or assigns as may expressly adopt this Plan and agree in writing to continue this Plan.
2.16 Entry Date means November 1, 1989, and each succeeding November 1. Effective January 1, 1991, Entry Date means January 1 and each succeeding January 1.
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2.17 ERISA means the Employee Retirement Income Security Act of 1974, as amended.
2.18 Fiscal Year means the accounting year of the Plan, which is the 12-month period ending October 31. Effective January 1, 1991, Fiscal year means the 12-month period ending December 31.
2.19 Normal Retirement Date means the date of the Participants 62nd birthday.
2.20 Participant means any Employee who has entered the Plan and been credited with Service Award Benefits but has not yet had such benefits distributed.
2.21 Plan means the arrangement created by this document.
2.22 Plan Administrator means the Administrative Committee, discussed in Article 9.
2.23 Service Award Benefit means the benefit calculated under Section 4.2.
ARTICLE 3
ELIGIBILITY, PARTICIPATION AND BENEFICIARY DESIGNATION
3.1 Definitions.
(a) Eligible Employee means any Employee of the Employer or an Affiliated Employer whose Compensation is $50,000 or greater in any calendar year. The $50,000 dollar amount may be adjusted from time to time as the Plan Administrator may deem necessary. The foregoing notwithstanding, an Employee shall not be an Eligible Employee during any Fiscal Year the Employee is also eligible to receive contributions under or make 401(k) contributions to the ABM 401(k) Employee Savings Plan.
(b) There shall be no additional Eligible Employees designated after December 31, 2001.
3.2 Participation.
(a) Initial Participants. Employees who are Eligible Employees as of October 31, 1989 shall become Participants as of November 1, 1989.
(b) Newly Hired Employees. Employees who are hired after October 31, 1989, shall become Participants as of the first November 1, or such earlier date, after certification by the Committee that the Employee is an Eligible Employee. Employees hired
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after January 1, 1991 shall become Participants as of the first January 1, or such earlier date, after certification by the Committee that the Employee is an Eligible Employee.
(c) Other Employees. Other Employees shall become Participants as of the first November 1, or such earlier date, after certification by the Committee that the Employee is an Eligible Employee. Effective January 1, 1991, the November 1 participation date in this Article shall be changed to January 1.
(d) Rehired Employees. A rehired Employee shall be treated as an Employee hired after October 31, 1989, unless the Employee was a Participant in the Plan. Section 2.16 of the Plan notwithstanding, former Plan Participants shall renew their participation in the Plan as of the July 1 or January 1 coinciding with or next following their date of rehire provided they are otherwise eligible for the Plan.
3.3 Beneficiary Designation.
(a) Designation Procedure. Each Eligible Employee, upon becoming a Participant shall designate a Beneficiary or Beneficiaries to receive benefits under the Plan after his death. A Participant may change his beneficiary designation at any time. Each beneficiary designation shall be in a form prescribed by the Committee and will be effective only when filed with the Committee during the Participants lifetime. Each beneficiary designation filed with the Committee will cancel all previously filed Beneficiary designations.
(b) Lack of Designation. In the absence of a valid designation, the Participants benefits under the Plan shall be distributed to the Participants surviving spouse, or if there is no surviving spouse to the Participants estate.
3.4 Committee Determines Eligibility. Compliance with the eligibility requirements shall be determined by the Committee, which shall also inform each Eligible Employee of his becoming a Participant. The Committee shall provide each participant with a summary plan description in compliance with ERISA and regulations thereunder.
ARTICLE 4
BENEFITS
4.1 Credits for Service Award Benefits.
(a) On each Award Date, commencing October 31, 1990, the Board shall Credit the Account of each Eligible Participant with 7 days, to be used in the calculation of Benefits under Article 4.2. For the short Fiscal Year beginning October 1, 1991 and ending
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December 31, 1991, the Board shall determine the number of days to be credited to each Eligible Participant, if any.
(b) In addition to (a) above, on each Award Date, commencing October 31, 1990, the Board may, in its sole discretion, designate an additional number of days to be credited to the Account of each Eligible Participant.
(c) If an employee reenters the Plan on July 1 of any year, the Employee/Participant shall be to 1/2 the number of days awarded under (a) and (b) above to other Employees who participated for the entire year.
4.2 Calculation of Service Award Benefit. Upon termination of employment, the Committee shall determine the benefit payable to the Participant. The benefit shall be equal to the number of days credited to the Account of the eligible Employee multiplied by the average annual Compensation received in the three full calendar years of full-time employment preceding the year of termination converted to a daily rate of pay. For purposes of this calculation, a year shall consist of 260 days.
4.3 Limitation on Benefits. In no event shall the benefits payable under this Plan combined with the benefits under the severance pay plan of the Employer, as described in Chapter 3, III, (b) of the ABMI Personnel Policy and Procedure Manual, as it may be amended or revised from time to time, exceed two times the Compensation received by the Participant in the twelve month period preceding the Participants termination from employment.
ARTICLE 5
FORFEITURES OF BENEFITS
5.1 Forfeiture for Short Service. A Participant who terminates employment prior to completing 5 full years of service, measured from the Employees Date of Hire, for the Employer or an Affiliated Employer shall forfeit all benefits under this Plan. A Participant will be credited with one year of service for each 12 month period of continuous employment with the Employer or an Affiliated Employer.
5.2 Exceptions.
(a) Death. Notwithstanding Article 5.1 above, a Participants benefits under this Plan shall not be forfeitable if the termination of employment is due to the death of the Participant.
(b) Disability. Notwithstanding Article 5.1 above, a Participants benefits under this Plan shall not be forfeitable upon a finding by the Committee that the Participants termination of employment is due to Disability defined in Article 2.11.
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(c) Normal Retirement. Notwithstanding Article 5.1 above, a Participants benefits under this Plan shall not be forfeited if the Participants termination occurs after the Participants Normal Retirement Date under this Plan.
(d) Notwithstanding Article 5.1 above, if a Participants employment is terminated by action of the Employer as part of the divestiture of Amtech Elevator Services, the Participants Account under the Plan shall become fully vested on the closing of the divestiture transaction.
5.3 Unallocatable Participants. If all or any portion of a Participants benefits become payable under this Plan, and the Committee after a reasonable search cannot locate the Participant or his Beneficiary (if such Beneficiary is entitled to payment) the Account shall be Forfeited as of the end of the third Fiscal Year following the Participants termination from employment.
5.4 Forfeiture for Cause. A Participant who is terminated from employment because of theft, defalcation, or embezzlement from the Employer, an Affiliated Employer, or a customer or client of either the Employer or an Affiliated Employer, shall forfeit all benefits under this Plan.
ARTICLE 6
PARTICIPANTS ACCOUNTS
6.1 Service Award Account. The Committee shall maintain an accounting of the number of days and weeks, or portions thereof, awarded to each Participant along with a record of the Compensation received by the Participant for the current calendar year and the two preceding calendar years.
6.2 Statement of Accounts. At least annually, the Committee will provide the Participant with a statement of the status of the Participants Account and the record of Compensation in that Account. In the event of any error, the Participant is entitled to request the Committee to correct either the number of days or weeks credited, or the Compensation credited.
ARTICLE 7
DISTRIBUTION OF BENEFITS
7.1 General. Benefits under the Plan are paid solely from the assets of the Employer. This Plan document grants the Participants no greater right to the assets of the Employer and Affiliated Employers than that enjoyed by any unsecured creditor of the Employer and Affiliated employers.
7.2 Administrative Rules.
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(a) Authority. Distributions to Participants shall be made only in accordance with the directions of the Committee, which shall be governed by the terms of this Plan documents.
(b) Claims. A Participants Beneficiary has the right to file a claim for benefits as set forth in Article 9.7.
7.3 Timing and Amount of Distributions. Subject to Section 7.4, below, a Participant shall receive his or her benefits in a single lump payment soon as administratively feasible following the termination of employment by the Participant, but in no event later than 90 days following such termination.
7.4 Conditions to Distributions; Code Section 409A. Notwithstanding anything contained herein to the contrary, a Participant shall not be considered to have terminated employment with the Company for purposes of the Plan and no payments shall be due to a Participant under this Section 7 unless the Participant would be considered to have incurred a separation from service from the Company within the meaning of Code Section 409A. To the extent required in order to avoid accelerated taxation and/or tax penalties under Code Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to the Plan during the six-month period immediately following a Participants termination of employment shall instead be paid on the first business day after the date that is six months following the Participants termination of employment (or upon the Participants death, if earlier).
ARTICLE 8
FIDUCIARY RESPONSIBILITY
8.1 Named Fiduciary. The authority to control and manage the operation and administration of the Plan shall be allocated between the Employer, the Affiliated Employer and the Committee, all of whom are named fiduciaries under ERISA.
8.2 Fiduciary Standards. Each fiduciary shall discharge its duties with respect to the Plan solely in the interest of the Participants and Beneficiaries as follows:
(a) For the exclusive purpose of providing benefits to Participants and their Beneficiaries;
(b) With the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims;
(c) In accordance with the Plan document.
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8.3 Fiduciaries Liable for Breach of Duty. A fiduciary shall be liable, as provided in ERISA, for any breach of his fiduciary responsibilities. In addition, a fiduciary under this Plan shall be liable for a breach of fiduciary responsibility of another fiduciary under this Plan as provided under ERISA Section 405.
8.4 Fiduciary May Employ Agents. Any person or group of persons may serve in more than one fiduciary capacity with regard to the Plan. A fiduciary, with the consent of the Employer, may employ one or more persons to render advice and assistance with regard to any function such fiduciary has under the Plan. The expenses of such persons shall be paid by the Employer.
8.5 Authority Outlined.
(a) Employer Authority. The Employer has the authority to amend and terminate the Plan, and to appoint and remove members of the Committee.
(b) Committee Authority. The Committee has the authority to:
(i) Maintain the records of Accounts of the Participants;
(ii) Furnish and correct errors in statements of Accounts;
(iii) Establish the standards for determining Disability under the Plan;
(iv) Construe the Plan document and questions thereunder; and
(v) Employ advisors and assistants.
8.6 Fiduciaries Not to Engage in Prohibited Transactions. A fiduciary shall not cause the Plan to engage in a transaction if he knows or should know that such transaction constitutes a prohibited transaction under ERISA Section 406 or code Section 4975, unless such transaction is exempted under ERISA Section 408 or Code Section 4975.
ARTICLE 9
ADMINISTRATIVE COMMITTEE
9.1 Appointment of Administrative Committee. The Compensation Committee of the Board of Directors of Employer shall appoint an Administrative Committee to manage and administer this Plan in accordance with the provisions hereof, each member to serve
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for such term as the Compensation Committee of the Board of Directors of Employer may designate or until a successor member has been appointed or until removed by the Compensation Committee of the Board of Directors of Employer. Members shall serve without compensation for committee services. All reasonable expenses of the Committee shall be paid by the Employer.
9.2 Committee Operating Rules. The Committee shall act by agreement of a majority of its members, either by vote at a meeting or in writing without a meeting. By such action, the Committee may authorize one or more members to execute documents on its behalf. In the event of a deadlock or other situation which prevents agreement of a majority of the Committee members, the matter shall be decided by the Employer.
9.3 Duties of Plan Administrator. The Committee is the Plan Administrator under ERISA and shall have the duty and authority to comply with the reporting and disclosure requirements of ERISA which are specifically required of the Plan Administrator.
9.4 Duties of the Committee. The Committee shall keep on file a copy of this Plan, including any subsequent amendments and the latest annual report required under Title I of ERISA for examination by Participants during the business hours.
9.5 Committee Powers. The Committee has the power and duty to do all things necessary or convenient to effect the intent and purpose of this Plan, whether or not such powers and duties are specifically set forth herein. Not in limitation but in amplification of the foregoing, the Committee shall have the power to construe the Plan document and to determine all questions hereunder. Decisions of the Committee made in good faith upon any matters within the scope or its authority shall be final and binding on the Employer, the Affiliated Employers, the Participants, their Beneficiaries and all others. The Committee shall at all times act in a uniform and nondiscriminatory manner in making and carrying out its decisions, and may from time to time prescribe and modify uniform rules of interpretation and administration.
9.6 Committee May Retain Advisors. With the approval of the Employer, the Committee may from time to time or on a continuing basis, retain such agents and advisors including, specifically, attorneys, accountants, actuaries, consultants and administrative assistants, as it considers necessary to assist it in the proper performance of its duties. The expenses of such agents or advisors shall be paid by the Employer.
9.7 Claims Procedure.
(a) Claims Must Be Submitted Within 60 Days. The Committee shall determine Participants and Beneficiaries rights and benefits under the Plan. In the event of a dispute over benefits, a Participant or Beneficiary may file a written claim for benefits with the Committee, provided that such claim is filed within 60 days of the date the Participant or Beneficiary receives notification of the Committees determination.
(b) Requirements for Notice of Denial. If a claim is wholly or partially denied, the Committee shall provide the claimant, setting forth:
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(i) The specific reason for the denial;
(ii) Specific references to the pertinent provisions on which the denial is based;
(iii) A description of any additional material or information necessary for the claimant to perfect the claim with an explanation of why such material or information is necessary; and
(iv) Appropriate information as to the steps to be taken if the claimant wishes to submit his or her claim for review. The notice of denial shall be given within a reasonable time period but not later than 90 days of the date the claim is filed, unless special circumstances require an extension of time for processing the claim. If such extension is required, written notice shall be furnished to the claimant within 90 days of the date the claim was filed stating the special circumstances requiring an extension of time and the date by which a decision on the claim can be expected, which shall be no more than 180 days from the date the claim was filed. If no notice of denial is provided as herein described, the claimant may appeal the claim as though the claim had been denied.
(c) Claimants Rights if Claim Denied. The claimant and/or his representative may appeal the denied claim and may:
(i) Request a review upon written request to the Committee;
(ii) Review pertinent documents; and
(iii) Submit issues and comments in writing; provided that such appeal is made within 60 days of the date the claimant received notification of the denied claim.
(d) Time Limit on Review of Denied Claim. Upon receipt of a request for review, the committee shall provide written notification of its decision to the claimant stating the specific reasons and referencing specific Plan provisions on which its decision is based, within a reasonable time period but not later than 60 days after receiving the request, unless special circumstances require an extension for processing the review. If such an extension is required, the Committee shall notify the claimant of such special circumstances and of the date, no later than 120 days after the original date the review was requested, on which the Committee will notify the claimant of its decision.
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(e) No Legal Recourse Until Claims Procedure Exhausted. In the event of any dispute over benefits under this Plan, all remedies available to the disputing individual under this Article 9.7 must be exhausted before legal recourse of any type is sought.
9.8 Committee Indemnification. To the fullest extent permitted by law, the Employer agrees to indemnify, to defend, and hold harmless the members of the Committee, individually and collectively, against any liability whatsoever for any (1) action taken or omitted by them in good faith in connection with this Plan or their duties hereunder, and (2) expenses or losses for which they may become liable as a result of any such actions or non-actions, unless resultant from their own willful misconduct. The Employer may purchase insurance for the Committee to cover any of their potential liabilities with regard to the Plan.
ARTICLE 10
AMENDMENT AND TERMINATION
10.1 Employer May Amend Plan. The Compensation Committee of the Board of Directors of Employer or to the extent provided below, the Administrative Committee, may at any time modify or amend any or all of the provisions of the Plan. The Administrative Committee may amend the Plan to bring the Plan into compliance with applicable law or, to make such other changes as the Administrative Committee deems desirable, provided that such changes do not materially increase the cost of the Plan to Employer or take the Plan out of compliance with applicable law; and provided further that the Committee may not admit new participants to the Plan or amend this Article 10.
10.2 Employer May Terminate Plan. The Employer has established the Plan with the bona fide intention and expectation that the Plan will continue indefinitely, but the Employer shall be under no obligation to maintain the Plan for any given length of time and the Compensation Committee of the Board of Directors of Employer may, in its sole discretion, terminate the Plan at any time (provided that such termination is done in accordance with Code Section 409A) without any liability, except as to the payment of benefits earned under this Plan prior to the date this Plan is terminated.
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