ABM INDUSTRIES INC /DE/
EXHIBIT 10.71
<DOCUMENT>
<TYPE>EX-10.71
<SEQUENCE>5
<FILENAME>f86502exv10w71.txt
<DESCRIPTION>EXHIBIT 10.71
<TEXT>
<PAGE>
EXHIBIT 10.71

                                                                [EXECUTION COPY]

                                   AGREEMENT

         THIS AGREEMENT (this "Agreement") is made between Martinn H. Mandles
("Mr. Mandles") and ABM Industries Incorporated, a Delaware corporation,
("ABM"), for itself and on behalf of its subsidiary corporations, and shall
become effective upon the Effective Date set forth in Section 22.

                                    RECITALS

         WHEREAS, Mr. Mandles previously was a full-time employee and officer
employed by ABM, and previously was and currently is a director of ABM. Chairman
of the Board of ABM, and a voting member of the Executive Committee of the Board
of Directors of ABM (the "Board");

         WHEREAS, at a meeting of the Board held on July 24,2002, the Board
approved an immediate internal reorganization of ABM which included, among other
things, the reorganization and reassignment of the functions performed by or
reporting to the Chief Administrative Officer ("CAO") of ABM (the
"Reorganization");

         WHEREAS, prior to the Reorganization, Mr. Mandles was serving in the
capacity of CAO and the reorganized ABM governance structure no longer includes
the position of CAO; and

         WHEREAS, ABM recognizes Mr. Mandles' many contributions to ABM and
desires to enter into this Agreement.

         NOW, THEREFORE, in consideration of the mutual promises, covenants and
representations set forth below and other good and valuable consideration, the
parties agree as follows:

         1.  Change in Status; Continuing Service; Offices.

                  (a) Mr. Mandles acknowledges the elimination of the position
of CAO and, effective as of the Effective Date, he hereby agrees to a change in
status for all of his positions as an officer and full-time employee of ABM as
set forth in this Agreement. Mr. Mandles further agrees, no later than the
Effective Date, to resign all directorships and offices that he holds with
respect to any subsidiary corporation of ABM.

                  (b) Mr. Mandles and ABM hereby acknowledge and agree that the
Executive Employment Agreement dated November 1,1991, between Mr. Mandles and
ABM, and all amendments to such employment agreement, including, but not limited
to, the Amendment of Employment Agreement, dated November 1,1993; the Second
Amendment of Corporate Executive Employment Agreement, dated November 14,1994;
the Third Amendment of Corporate Executive Employment Agreement, dated October
14, 1996; the Fourth Amendment of Corporate Executive Employment Agreement,
dated December 16,1997; and the Fifth Amendment of Division Executive Employment
Agreement, dated June 30,1998; (such

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Executive Employment Agreement, as amended through the Effective Date, the
"Employment Agreement"), are hereby terminated and of no force and effect.

                  (c) During Mr. Mandles current term as a duly-elected member
of the Board of ABM, and thereafter subject to Mr. Mandles being re-elected to
the Board by ABM's stockholders, Mr. Mandles agrees to continue to serve as
ABM's non-executive Chairman of the Board and as a voting member of the
Executive Committee of the Board, provided that such service as non-executive
Chairman of the Board and/or as a voting member of the Executive Committee
of the Board shall be at the pleasure of the Board. In connection with his
continuing service as a director of ABM, as the non-executive Chairman of
the Board, and as a voting member of the Executive Committee of the Board,
Mr. Mandles will spend an amount of time on these activities similar to the
amount of time directors of companies whose securities are listed on the New
York Stock Exchange generally devote to such activities. Mr. Mandles may
voluntarily resign from such positions with ABM only upon thirty days prior
written notice to ABM.

                  (d) As an employee, Mr. Mandles shall continue to be based at
ABM's Century City, California office through December 31,2002, and ABM shall
continue to provide Mr. Mandles with an administrative assistant at that office
through such date. From the Effective Date through November 1,2004, headquarters
office space in San Francisco. California shall be made available to Mr. Mandles
for his use in connection with ABM business.

         2.  Employment After Effective Date.

                  (a) From the Effective Date through November 1,2004, Mr.
Mandles shall remain an employee of ABM rendering sales, marketing and related
services. From the Effective Date through December 31,2002, Mr. Mandles shall
render such services to ABM at not less than 30 hours per week (subject to
exceptions for vacation, sick leave and holiday time). From January 1, 2003
through November 1, 2004, Mr. Mandles shall make himself available to provide
such services to ABM on an on-call basis. From and after the Effective Date, Mr.
Mandles shall perform such responsibilities as may be assigned to him from time
to time by the President and Chief Executive Officer of ABM ("CEO"). It is
expected that Mr. Mandles will not perform any day-to-day management functions.
Unless earlier terminated in accordance with this Agreement, Mr. Mandles shall
automatically, and without any further action on the part of either party
hereto, cease to be an employee of ABM, at 11:59 p.m. PST on November 1, 2004.

                  (b) Mr. Mandles agrees that from the Effective Date through
November 1, 2004, he shall make every effort to be reasonably available to
provide the services outlined in this Section 2, except that failure to render
such services by reason of any physical or mental illness or disability, or
temporary unavailability because of absence from the State of California, shall
not affect Mr. Mandles' right to receive the compensation set forth in
Section 3.

                  (c) At any time during this Agreement, ABM shall have the
right to terminate Mr. Mandles' employment hereunder pursuant to a good faith
determination by a majority of the Board of "Just Cause." "Just Cause" includes
but is not limited to any theft or other dishonesty, or any material: (i)
neglect of full-time or part-time employment duties, as applicable, (ii)
inability or unwillingness to perform full-time or part-time employment duties
as

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applicable, (iii) insubordination, (iv) abuse of alcohol or other drugs, (v)
breach of this Agreement; (vi) other misconduct, unethical or unlawful activity,
or (vii) other conduct that is harmful to ABM.

                  (d) Mr. Mandles shall return to ABM the American Express
credit card issued to ABM in Mr. Mandles' name by the Effective Date, and he
shall no longer utilize such credit card; provided, however, that Mr. Mandles
shall have until thirty days after the Effective Date to terminate any
recurring expenses charged to such credit card prior to the Effective Date.
On October 31, 2003, or such earlier date that Mr. Mandles ceases to be an
employee of ABM, Mr. Mandles shall return to ABM and no longer utilize his ABM
gasoline card, his ABM telephone calling card and cellular telephone provided to
him by ABM.

         3.  Payment of Good and Valuable Consideration. In consideration of Mr.
Mandles' acceptance of this Agreement and the releases contained and described
herein, and conditioned on Mr. Mandles' continuing employment and compliance
with this Agreement, ABM will provide the following:

                  (a) From the Effective Date through November 1, 2002, Mr.
Mandles shall be paid an annualized salary ("Salary") of Four Hundred Forty Five
Thousand Two Hundred Thirty Two Dollars ($445,232) per year, payable
semi-monthly at the rate of $37,102.67 per month. The amount of Salary shall be
adjusted on November 1, 2002 to reflect the percentage increase, if any, in the
World@Work (formerly American Compensation Association) Index ("W@W Index") for
the Western Region, subject to a maximum annual increase of six percent (6%).
This adjustment, if any, shall be based upon the projected W@W Index for the W@W
fiscal year ending on the June 30th immediately preceding the effective dates of
the annual increase hereunder. Notwithstanding the foregoing, there shall be no
annual increase in Salary unless ABM's net income per diluted share ("EPS")for
fiscal year ending October 31, 2002 is equal to or greater than ABM's EPS for
ABM's fiscal year ending October 31, 2001. There shall be no downward adjustment
in Salary in the event the W@W Index shows a decrease from W@W's prior fiscal
year. There shall be no increase in Salary after November 1, 2002 under this
Agreement.

                  (b) Subject to proration in the event of modification or
termination of employment hereunder, Mr. Mandles shall be paid an annual bonus
("Bonus") based on the profit ("Profit") for the fiscal year ending October 31,
2002, and the fiscal year ending October 31, 2003, as described in subsections
(i) through (vii) below. Nothing contained in this Agreement shall entitle
Executive to receive a Bonus or other incentive or contingent compensation from
ABM based on any sales or profits made (including but not limited to any WTC
Related Gain or WTC Related Carry-Over Gain realized or recognized) by ABM after
October 31, 2003 (or such earlier date that Mr. Mandles ceases to be an employee
of ABM).

                      (i)     Subject to the maximum Bonus payable under Section
3(b)(iv), such Bonus for each such fiscal year shall be 0.2436% of ABM's Profit
on a pro-rata basis (provided, however, that any such proration for the fiscal
year ending October 31,2002, shall commence on November 1,2001).

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                      (ii)    Profit for purposes of determining such Bonus
shall be defined as the consolidated income (in accordance with generally
accepted accounting principles) before income taxes of ABM, excluding: (1) gains
or losses on sales or exchanges of real property, or on sales or exchanges of
all or substantially all of the stock or assets of a subsidiary corporation or
any other business unit of ABM, (2) gains or losses on the discontinuation of
any business unit of ABM, (3) the discretionary portion of any contributions
made to any profit sharing, employee retirement savings or similar plan, and (4)
WTC Related Gain. At any time, the Board reserves the right to further adjust
Profit for purposes of determining a Bonus in the event of a Significant
Transaction (as defined below) during a fiscal year and/or for any unanticipated
and material events that are beyond the control of ABM, including acts of god,
nature, war or terrorism, or changes in the rules for financial reporting set
forth by the Financial Accounting Standards Board, the Securities and Exchange
Commission ("SEC"), and/or the New York Stock Exchange. In addition, Profit
shall be subject to such other adjustments as are made to the "Profit" used in
calculating Bonus generally for the other senior executives of ABM.

                      (iii)   Notwithstanding the foregoing, Profit for purposes
of determining the Bonus in any such fiscal year shall include WTC Related Gain
and WTC Related Carry-Over Gain in an aggregate amount not to exceed a maximum
of $10 million. For purposes of this Agreement, the term "WTC Related Gain"
shall mean the total amount of all items of income included in ABM's audited
consolidated financial statements for any fiscal year that result from ABM's
receipt of insurance proceeds or other compensation or damages due to ABM's loss
of property, business or profits as a result of the destruction of the World
Trade Center on September 11, 2001. Also, for purposes of this Agreement, the
term "WTC Related Carry-Over Gain" shall mean the aggregate amount of WTC
Related Gain not previously taken into account in determining a Bonus for a
prior fiscal year. Lastly, for purposes of this Agreement, the term "Significant
Transaction" shall mean ABM's acquisition or disposition of a business or assets
which ABM is required to report under Item 2 of SEC Form 8-K.

                      (iv)    Mr. Mandles' maximum Bonus for each fiscal year
shall be one-hundred percent (100%) of the Salary for such fiscal year set forth
in this Agreement.

                      (v)     The Chief Financial Officer for ABM shall
calculate the Profit and Bonus for purposes of this Agreement. ABM shall pay Mr.
Mandles the Bonus for the fiscal year following completion of the audit of ABM's
financial statements, but no later than seventy-five(75) days after the end of
such fiscal year. ABM in its sole discretion may pay any Bonus earlier. The
Bonus for any partial fiscal year shall be prorated for the fraction of the
fiscal year for which such Bonus is payable. Absent bad faith or material error,
any conclusions of the Board with respect to the amounts of the Profit or Bonus
shall be final and binding upon Mr. Mandles and ABM.

                      (vi)    Notwithstanding the foregoing, no Bonus for any
fiscal year of ABM shall be payable unless ABM's Earnings Per Share ("EPS") for
the fiscal year then ending is equal to or greater than eighty percent(80%) of
ABM's EPS for the previous fiscal year of ABM.

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                      (vii)   Mr. Mandles acknowledges receipt of a Bonus for
the fiscal year ended October 31, 2001, and agrees that he is not entitled to
any further bonus for that fiscal year, for any reason whatsoever.

                      (viii)  Mr. Mandles shall receive a payment of $25,000
(less applicable withholding) on the Effective Date. Mr. Mandles shall receive
an additional payment of $5,000 (less applicable withholding) on the effective
date of the release of claims to be executed and delivered to ABM by Mr. Mandles
pursuant to Section 12(d).

                  (c) Subject to the requirements of applicable laws and the
terms, conditions and exclusions of the specific fringe benefit plans or
arrangements and ABM policies as each may be amended from time to time:

                      (i)     from the Effective Date through October 31, 2003,
Mr. Mandles shall receive the then current fringe benefits (which ABM reserves
the right to add, increase, reduce or eliminate at any time, but no such benefit
or benefits shall be reduced or eliminated as to Mr. Mandles unless generally
reduced or eliminated as to senior executives of ABM) generally provided by ABM
to all of its senior executives, except:

                              (1)     Equity. Mr. Mandles understands and
acknowledges that he shall not receive any stock option grants or other equity
compensation after July 24, 2002 (although Mr. Mandles may continue to invest
his Salary and Bonuses paid hereunder subject to the then current terms of ABM's
Employee Stock Purchase Plan). Mr. Mandles' existing stock options shall
continue to be governed by the applicable stock option agreements and option
plans;

                              (2)     Retirement. Mr. Mandles shall not be
entitled to accrue any further retirement benefits other than those (i) already
vested in the ABM Service Award Benefit Plan, Supplemental Executive Retirement
Plan and the Retiree Life Insurance Plan, or (ii) already vested or vesting in
the ABM 401(k) Employee Savings Plan;

                              (3)     Vacation. Mr. Mandles shall not accrue any
additional vacation time after the Effective Date;

                              (4)     Disability/Sick Leave/Life Insurance.
Mr. Mandles shall not receive any long-term or short-term disability or sick
leave after the Effective Date. During the time period that Mr. Mandles is
rendering services of at least 30 hours per week (as described in Section 2(a)),
Mr. Mandles shall continue to receive the same amount of life insurance,
accidental death and dismemberment ("AD&D") and business travel accident
("BTA") insurance benefits that he was receiving immediately prior to the
Effective Date. After December 31, 2002, or such earlier date that Mr. Mandles
ceases to provide weekly services of at least 30 hours as an employee of ABM,
Mr. Mandles shall no longer receive any AD&D or BTA insurance benefits, however
ABM will provide for a conversion of the group life insurance policy to an
individual life insurance policy for Mr. Mandles that excludes AD&D and BTA
benefits. ABM will pay the premiums for such converted individual life insurance
policy for coverage through November 1, 2004, or such earlier date that Mr.
Mandles ceases to be an employee of ABM; and

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                              (5)     Health Insurance. Mr. Mandles shall be
eligible for group health coverage to the same extent and on the same terms as a
full-time senior executive of ABM provided Mr. Mandles continues to pay the
employee portion of the premiums due for such coverage. For purposes of Sections
3(c)(i)(5), 3(c)(ii)(3) and 3(c)(iii)(7), references to "Mr. Mandles" with
respect to providing group health coverage shall be deemed to include Mr.
Mandles and his dependent(s), if any, who are eligible for dependent coverage
under ABM's group health insurance plan and group health contracts. ABM shall
use commercially reasonable efforts to continue Mr. Mandles' group health
coverage as an employee under its group health contracts. In the event Mr.
Mandles ceases to be eligible for group health coverage during his employment
under ABM's then existing group health insurance plan or group health contracts,
Mr. Mandles may exercise his rights under the Consolidated Omnibus Budget
Reconciliation Act of 1986, as amended ("COBRA"), to continue his group health
coverage. ABM will pay the cost of such COBRA continuation coverage (provided
that Mr. Mandles shall pay the applicable employee share for such continuation
coverage) until the earlier of the expiration date for the maximum required
period for COBRA continuation coverage specified in Section 54.4980B-7 of
the Internal Revenue Service's Treasury Regulations (the "Maximum Required
Continuation Period") or the date on which Mr. Mandles ceases to be an employee
of ABM. Nothing in this Section 3(c)(i)(5) is intended to limit or restrict Mr.
Mandles' dependents from exercising any independent rights they may have under
COBRA or comparable state law.

                      (ii)    From November 1, 2003 until the date that
Mr. Mandles ceases to be an employee of ABM, Mr. Mandles shall receive only the
following then current fringe benefits generally provided by ABM to all of its
senior executives:

                              (1)     Stock Purchase Plan. Mr. Mandles may
continue to invest his Salary paid hereunder subject to the then current terms
of ABM's Employee Stock Purchase Plan;

                              (2)     Deferred Compensation. Mr. Mandles may
continue to defer his Salary paid hereunder subject to the then current terms of
ABM's Deferred Compensation Plan; and

                              (3)     Health Insurance. Mr. Mandles shall be
eligible for group health coverage to the same extent and on the same terms as
a full-time senior executive of ABM provided Mr. Mandles continues to pay the
employee portion of the premiums due for such coverage. ABM shall use
commercially reasonable efforts to continue Mr. Mandles' group health coverage
as an employee under its group health contracts. In the event Mr. Mandles ceases
to be eligible for group health coverage during his employment under ABM's then
existing group health insurance plan or group health contracts, Mr. Mandles may
exercise his rights that he may then have under COBRA to continue his group
health coverage during the Maximum Required Continuation Period (or, if such
COBRA rights were previously exercised by Mr. Mandles and Mr. Mandles is
maintaining his group health coverage under COBRA continue to be covered
pursuant to COBRA during the Maximum Required Continuation Period). ABM will pay
the cost of such COBRA continuation coverage (provided that Mr. Mandles shall
pay the applicable employee share for such continuation coverage) until the
earlier of the expiration date of the Maximum Required Continuation Period or
the date on which Mr. Mandles ceases to be an employee of ABM. Nothing in this
Section 3(c)(ii)(3) is intended to

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limit or restrict Mr. Mandles' dependents from exercising any independent rights
they may have under COBRA or comparable state law. If Mr. Mandles elects and
maintains COBRA coverage through the expiration of the Maximum Required
Continuation Period, then Mr. Mandles may exercise any rights he may then have
under Section 1373.621 of the California Health and Safety Code
("CAL-COBRA-CONTINUATION") to continue group health coverage for Mr. Mandles
pursuant to the governing rules of CAL-COBRA-CONTINUATION. ABM will pay the cost
of such CAL-COBRA-CONTINUATION coverage (provided that Mr. Mandles will pay the
employee portion of such coverage) until the earlier of the date that CAL-COBRA
-CONTINUATION coverage is no longer required to be offered to Mr. Mandles or the
date that Mr. Mandles ceases to be an employee of ABM. In no event under this
Agreement will ABM pay for any COBRA or CAL-COBRA-CONTINUATION coverage for
Mr. Mandles (or any dependents) with respect to any time period after November
1,2004 or such earlier date that Mr. Mandles ceases to be an employee of ABM.

                      (iii)   After the date that Mr. Mandles ceases to be an
employee of ABM:

                              (1)     Equity. Mr. Mandles shall remain eligible
to exercise his unexercised stock options that are vested as of the date that he
ceases to be an employee of ABM in accordance with the terms of each applicable
stock option plan and option agreement;

                              (2)     Retirement. Mr. Mandles shall remain
eligible to receive the retirement benefits described in the Supplemental
Executive Retirement Plan Grant Certificate dated April 10, 2002;

                              (3)     Service Award Benefit. Mr. Mandles shall
receive his service award benefits pursuant to the terms of such service award
plan;

                              (4)     Vacation. Any vacation balance accrued and
not used before the date that Mr. Mandles ceases to be an employee of ABM shall
be paid to him at that time;

                              (5)     Deferred Compensation. Mr. Mandles shall
be entitled to receive his deferred compensation pursuant to the terms of such
plan and his distribution elections;

                              (6)     Retiree Life Insurance. Mr. Mandles shall
be eligible for retiree life insurance benefits as provided under such plan; and

                              (7)     Health Insurance. If not previously
exercised, Mr. Mandles may exercise his rights that he may have under COBRA (or
CAL-COBRA-CONTINUATION) to purchase entirely at his own expense the applicable
group health insurance for Mr. Mandles for the applicable premium and term. If
Mr. Mandles previously exercised (and is continuing to maintain) his COBRA (or
CAL-COBRA-CONTINUATION) rights, then he may continue, entirely at his own
expense, to be covered pursuant to COBRA (or CAL-COBRA-CONTINUATION) for the
applicable premium and term until the expiration of

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the Maximum Required Continuation Period (or such later date that CAL-COBRA-
CONTINUATION coverage is no longer required to be offered to Mr. Mandles).

                  (d) Through October 31, 2003, ABM shall continue to pay
directly or reimburse Mr. Mandles for all expenses of his company car and
memberships in Hillcrest Country Club, The Regency Club and the United Airlines
Red Carpet Club. On November 1, 2003, ABM shall transfer the title (or cause the
title to be transferred) free and clear to Mr. Mandles for his company car.
After October 31, 2003, Mr. Mandles shall be solely responsible for all expenses
of the aforementioned car and memberships. On November 1, 2004, ABM shall make a
payment of $103,000 to Mr. Mandles (subject to Section 3(g)) provided, however,
that such payment shall be immediately applied by ABM to partially repay Mr.
Mandles' obligation to ABM for ABM's purchase of Mr. Mandles' membership in
Hillcrest Country Club. Mr. Mandles understands and agrees that he will fully
pay off his $103,000 obligation to ABM for the Hillcrest Country Club membership
initial fee on November 1, 2004 or such earlier date that Mr. Mandles ceases to
be an employee of ABM.

                  (e) ABM shall pay directly or reimburse Mr. Mandles for
reasonable business expenses of ABM incurred by Mr. Mandles in connection with
the proper performance of his services under this Agreement, upon presentation
to such person by Mr. Mandles within sixty (60) days after incurring such
expense of an itemized request for payment, including the date, nature,
recipient, purpose and amount of each such expense, accompanied by receipts for
all such expenses in excess of Twenty-Five Dollars ($25) each.

                  (f) After the date that Mr. Mandles ceases to be an employee
of ABM, he will be eligible to receive fees generally payable to non-employee
directors for services he renders as a director of ABM.

                  (g) Any tax obligations of Mr. Mandles and tax liability
therefor, including any penalties and interest based upon such tax obligation,
that arise from the benefits and payments made to him under this Agreement shall
be Mr. Mandles' responsibility and liability. ABM will report each payment
provided for in this Section 3 on form W-2 for the tax year in which the payment
is made. All payments or benefits made under this Agreement to Mr. Mandles
(including those made under Section 3(d)) shall be subject to applicable tax
withholding laws and regulations. Mr. Mandles shall be required to fully
satisfy any such withholding as a condition of receipt of any payments or
benefits.

         4.  No Other Benefits; No Admission of Liability. Mr. Mandles
acknowledges that except for any vested or vesting benefits and except as
specifically set forth in Section 3, Mr. Mandles shall not be entitled to any
other compensation or benefits after the Effective Date. It is understood and
agreed that the furnishing of the consideration for this Agreement shall not be
deemed or construed at any time or for any purpose as an admission of liability
by ABM or Mr. Mandles.

         5.  Business Conduct. While employed by ABM, Mr. Mandles shall comply
with all applicable laws pertaining to the performance of this Agreement, and
with all lawful and ethical rules, regulations, policies, codes of conduct,
procedures and instructions of ABM, including the following:

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                  (a) GOOD FAITH: Mr. Mandles shall not act in any way contrary
to the best interest of ABM.

                  (b) BEST EFFORTS: Mr. Mandles shall not at any time from the
Effective Date through the earlier of his termination of employment or November
1, 2004 be directly or indirectly employed by, own, operate, assist or otherwise
be involved, invested or associated in any business that is similar or
competitive to any business of ABM; except that Mr. Mandles may own up to five
percent (5%) of any such publicly-held business(es), provided that Mr. Mandles:
(x) shall give ABM notice(s) of such ownership in accordance with Section 23
hereof, and (y) shall not at any time be directly or indirectly employed by or
operate, assist, or otherwise be involved or associated with any such
business(es).

                  (c) VERACITY: Mr. Mandles shall make no claims or promises to
any employee, supplier, contractor, customer or sales prospect of ABM that are
unauthorized by ABM or are in any way untrue.

                  (d) DRIVER'S LICENSE: Mr. Mandles shall have and carry a valid
driver's license issued by his or her state of domicile or the State of
California and a driver's permit issued by ABM whenever Mr. Mandles is driving
any motor vehicle in connection with ABM business. Mr. Mandles agrees to
immediately notify ABM in writing if Mr. Mandles' driver's license is lost,
expired, restricted, suspended or revoked for any reason whatsoever.

         6.  Indemnification Against Claims. ABM agrees to indemnify and hold
Mr. Mandles harmless from any liability, claim, demand, cost, expense and
attorneys' fees incurred by him as a result of any actions or omissions by him
in the course of his service to ABM as an employee, officer of director to the
extent other employees, officers or directors would be so indemnified.

         7.  Goodwill and Proprietary Information.

                  (a) Mr. Mandles agrees to utilize and further ABM's goodwill
("Goodwill") among its customers, sales prospects and employees, and
acknowledges that ABM may disclose to Mr. Mandles and Mr. Mandles may disclose
to ABM, proprietary trade secrets and other confidential information not in the
public domain ("Proprietary Information") including specific customer data such
as: (i) the identity of ABM's customers and sales prospects, (ii) the nature,
extent, frequency, methodology, cost, price and profit associated with its
services and products purchased from ABM, (iii) any particular needs or
preferences regarding its service or supply requirements, (iv) the names, office
hours, telephone numbers and street addresses of its purchasing agents or other
buyers, (v) its billing procedures, (vi) its credit limits and payment
practices, and (vii) its organization structure.

                  (b) Mr. Mandles agrees that such Proprietary Information and
Goodwill have unique value to ABM, are not generally known or readily available
to ABM's competitors, and could only be developed by others after investing
significant time and money. ABM would not make such Proprietary Information and
Goodwill available to Mr. Mandles unless ABM is assured that all such
Proprietary Information and Goodwill will be held in trust and confidence by Mr.
Mandles. Mr. Mandles hereby acknowledges that to use this Proprietary
Information and

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Goodwill except for the benefit of ABM would be a breach of such trust and
confidence and in violation of Mr. Mandles' Duty of Loyalty to ABM.

         8.  Covenants.  In recognition of Section 7, Mr. Mandles hereby agrees
that:

                  (a) as long as he is an employee and for one (1) year
thereafter, he will at no time directly or indirectly solicit or otherwise
encourage or arrange for any employee to terminate employment with ABM;

                  (b) except in the proper performance of this Agreement or in
the proper discharge of his duties as a director of ABM, he will not at any time
directly or indirectly disclose or deliver to any other person or business any
Proprietary Information obtained directly or indirectly by Mr. Mandles from, or
for, ABM;

                  (c) he will not at any time seek, solicit, divert, take away,
obtain or accept the patronage of any customer or sales prospect of ABM through
the direct or indirect use of any Proprietary Information of ABM, or by any
other unfair or unlawful business practice;

                  (d) he will not directly or indirectly, for himself or for any
other person or business, seek, solicit, divert, take away, obtain or accept any
customer account or sales prospect with which Mr. Mandles had direct business
involvement on behalf of ABM covering the one (1) year period prior to the
Effective Date through the date that Mr. Mandles ceases to be an employee of
ABM;

                  (e) except as needed to perform his duties as a director of
ABM (including, but not limited to, as Chairman of the Board and/or a member of
the Executive Committee) or as requested of him by the CEO, Mr. Mandles agrees
that: (i) on or before the Effective Date, he shall turn over to ABM all of
ABM's confidential files, records, and other documents in his possession at that
time, and (ii) on or before December 31, 2002 (or such earlier date that Mr.
Mandles ceases to be an employee of ABM), he shall turn over to ABM at ABM's
corporate office in Century City, California, all of ABM's office equipment,
furniture, fixtures and supplies in his possession at that time;

                  (f) nothing in this Agreement shall be binding upon the
parties to the extent it is void or unenforceable for any reason in the state of
employment, including as a result of any law regulating competition or
proscribing unlawful business practices; and

                  (g) Mr. Mandles represents to Company that he is not bound by
any contract with a previous employer or with any other business that might
prevent him from entering into this Agreement. Mr. Mandles further represents
that he is not bound by any other contracts or covenants that in any way
restrict or limit his activities in relation to his employment with ABM that
have not been fully disclosed to ABM prior to the signing of this Agreement.

         9.  Non-Disparagement. Both Mr. Mandles and ABM, through its directors
and officers, agree not to make any unfavorable or disparaging remarks about the
other to third parties or non-officer employees of ABM. However, Mr. Mandles
acknowledges and agrees that ABM's non-disparagement obligation pursuant to this
Agreement shall extend solely to the actions of ABM's directors and officers.
For this purpose, "officers" is defined as those persons

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identified by the Board as subject to the reporting requirements of Section 16
of the Securities Exchange Act of 1934, as amended. The provisions of this
Section 9 shall terminate on November 1, 2004 or such earlier date that Mr.
Mandles ceases to be an employee if Mr. Mandles does not re-execute a release of
claims as provided in Section 12(d). If Mr. Mandles does re-execute the release
of claims pursuant to Section 12(d), then the provisions of this Section 9 shall
survive after (i) Mr. Mandles ceases be an employee of ABM and (ii) termination
of this Agreement.

         10. Cooperation. After the date that Mr. Mandles ceases to be an
employee of ABM, Mr. Mandles agrees to cooperate with ABM, its attorneys or
experts retained by ABM or its attorneys in connection with any litigation
matters involving ABM that are pending on the date Mr. Mandles ceases to be an
employee of ABM or that may arise thereafter regarding events that occurred on
or before the date Mr. Mandles ceased to be an employee of ABM.

         11. No Other Claims. Mr. Mandles represents and warrants that he has
not filed against ABM or any of its subsidiaries, directors, officers,
employees, predecessors, successors, assigns or representatives any claim,
complaint, charge or suit with any federal, state or other agency, court, board,
office or other forum or entity, except for an open workers' compensation claim
for benefits under policy number 166801995 (pursuant to claim number 2J004385
for a claim related to a May 9, 2000, date of loss). Mr. Mandles agrees that he
will not, at any time hereafter, file any other claim, complaint, charge or suit
based upon circumstances arising on or before the Effective Date, other than a
claim arising from a breach by ABM of this Agreement (which shall be subject to
Section 13), and that if any agency, court, board, office, forum or other entity
assumes jurisdiction of any such claim, complaint, charge or suit, he will
request such entity to withdraw from the matter. A breach of this Section 11 by
Mr. Mandles shall entitle ABM to damages as provided by law and shall relieve
ABM of all obligations to Mr. Mandles as provided in this Agreement.

         12. General Mutual Releases.

                  (a) Mr. Mandles, on behalf of himself and his heirs,
executors, administrators, successors and assigns, does hereby irrevocably and
unconditionally release, acquit and forever discharge ABM and its affiliates and
all of its and their stockholders, subsidiaries, directors, officers, employees,
representatives, successors, assigns, agents and attorneys (collectively,
"Company") from any and all charges, complaints, grievances, claims,
liabilities, obligations, promises, agreements, controversies, damages, actions,
causes of action, suits, rights, demands, costs, losses, debts and expenses
(including attorneys' fees and costs actually incurred), of whatever kind or
nature, known or unknown, suspected or unsuspected, joint or several ("Claims"),
which Mr. Mandles has had or may hereafter claim to have had, against Company by
reason of any matter, act, omission, cause or event whatever that has occurred
up to and including the Effective Date other than those obligations set forth in
this Agreement. This release and waiver of Claims specifically includes but is
not limited to: (i) all Claims arising from or relating in any way to any act or
failure to act by any employee, officer or director of ABM, (ii) all Claims
arising from or relating in any way to the employment relationship of Mr.
Mandles with ABM and/or the termination thereof, including any Claims which
have been asserted or could have been asserted against Company, and (iii) any
and all Claims which might have been asserted by Mr. Mandles in any suit, claim,
or charge, for or on

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account of any matter or things whatsoever that has occurred up to and including
the Effective Date, under any and all laws, constitutions, statutes, orders,
regulations, or any other claim of right(s), including any claim under Age
Discrimination in Employment Act of 1967, as amended, Title VII of the Civil
Rights Act of 1964, as amended (including the amendments of the Civil Rights Act
of 1991), the Employee Retirement Income Security Act of 1974, as amended, the
Americans with Disabilities Act, State anti-discrimination statutes and any
Claim in contract or tort.

                  (b) ABM, on behalf of itself and its successors and assigns,
does hereby irrevocably and unconditionally release, acquit and forever
discharge Mr. Mandles and his heirs, executors, administrators, successors and
assigns from any and all Claims which ABM has had or may hereafter claim to have
had, against Mr. Mandles by reason of any matter, act, omission, cause or event
whatever that has occurred up to and including the Effective Date, other than
the obligations set forth in this Agreement. In giving this release: (i) ABM is
relying on Mr. Mandles' representations in Section 11 and his acknowledgement
and further representation that he has no reason to believe that ABM should have
any actionable claims against Mr. Mandles, and (ii) Mr. Mandles is relying on
ABM's acknowledgement and further representation that ABM has no reason to
believe that Mr. Mandles should have any actionable claims against ABM.

                  (c) For the purpose of implementing a full and complete
release and discharge, each of the parties expressly acknowledges that this
Agreement with the general releases set forth in this Section 12 are intended
to include in their effect, without limitation, all Claims which the parties
do not know or suspect to exist in their favor at the time of execution of
this Agreement, and that this Agreement and such general releases contemplate
the extinguishment of all such Claims. Each of the parties expressly waives
and relinquishes all rights and benefits he or it may have under Section 1542
of the California Civil Code which provides:

         A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
         CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR
         AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY
         HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH
         THE DEBTOR.

         Mr. Mandles represents that he has read and understood the provisions
of California Civil Code Section 1542.

                  (d) In order to extend the non-disparagement provisions of
Section 9 and in recognition of other valuable consideration provided by ABM,
Mr. Mandles (or his personal representative if applicable) agrees to re-execute
a release of claims, substantially in the form provided in this Section 12,
along with a representation similar to that provided in Section 11 on the date
that Mr. Mandles ceases to be an employee of ABM.

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         13.      Arbitration and Equitable Relief.

                  (a) Any claim or dispute related to or arising from this
Agreement (whether based in contract or tort, in law or equity) including claims
or disputes between Mr. Mandles and ABM or its directors, officers, employees
and agents regarding Mr. Mandles' employment or termination of employment
hereunder, or any other business of ABM, shall be resolved by a neutral
arbitrator agreed upon by both parties, through mandatory, final, binding
arbitration in accordance with the procedural and discovery rules of the
American Arbitration Association.

                  (b) The cost of such arbitration shall be borne by ABM. Any
such arbitration must be requested in writing within one (1) year from the date
the party initiating the arbitration knew or should have known about the claim
or dispute, or all claims arising from that dispute are forever waived. Any such
arbitration (or court proceeding as applicable hereunder) shall be held in the
city and/or county of employment hereunder. Judgment upon the award rendered
through such arbitration may be entered and enforced in any court having proper
jurisdiction.

                  (c) Provided that the complaining party has given to the other
party no less than one (1) week's prior written notice of the alleged breach,
the parties may apply to any court of competent jurisdiction for a temporary
restraining order, preliminary injunction or other interim or conservatory
relief as may be necessary, without breach of this Agreement and without
abridgment of the powers of the arbitrator. The parties hereby submit themselves
to the courts of California in and for the County of San Francisco for the
purpose of enforcing this Agreement.

         14. Confidentiality of Agreement.

                  (a) Mr. Mandles represents and agrees that he has not
disclosed the terms of this Agreement and, until such time that ABM is required
by law to publicly disclose the terms of this Agreement, Mr. Mandles agrees that
he will keep the terms, amounts and all other specific facts of this Agreement
completely confidential and that he will not disclose any information concerning
this Agreement to any person or entity, other than that which is legally
required and other than to his immediate family, administrative assistant and
professional representatives (including financial, tax and legal advisors);
provided, that disclosure to his immediate family, administrative assistant or
professional representatives in conditioned on the fact that they agree to keep
said information confidential and not disclose it to others.

                  (b) In the event Mr. Mandles discloses, in violation of
Section 14(a), the alleged facts upon which this Agreement is based, the amount
of consideration tendered to him, or the terms of the Agreement, ABM shall be
entitled to recover its actual damages or take any other action legally
allowable.

         15. Death, Resignation or Termination for Just Cause. Except as may be
expressly provided otherwise in Sections 3(c)(iii) and 3(f), all compensation,
payments and benefits to be provided to Mr. Mandles by ABM under this Agreement
(including but not limited to Section 3(d)) shall automatically terminate and
cease upon (a) the death of Mr. Mandles, (b)

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Mr. Mandles' resignation of employment or (c) the termination of Mr. Mandles'
employment by ABM for Just Cause. ABM shall pay when due to Mr. Mandles'
designated beneficiary or estate, as applicable, all prorated Salary, Bonus or
other contingent compensation, reimbursement of business expenses and fringe
benefits which would have otherwise been payable to Mr. Mandles under this
Agreement, through the date that Mr. Mandles ceased to be an employee of ABM
pursuant to clauses (a) through (c) above.

         16. Binding Agreement. This Agreement shall be binding upon and inure
to the benefit of Mr. Mandles and ABM, and their respective heirs,
administrators, representatives, executors, successors and assigns. Mr. Mandles
hereby designates The Mandles Family Trust dated June 30, 1993, as amended, as
his beneficiary under this Agreement.

         17. Attorneys' Fees. Each party shall bear its own costs (other than
the costs of arbitration pursuant to Section 13) and attorneys' fees incurred in
the achieving the settlement and release of the matters set forth in this
Agreement. If one party commences an action against the other to enforce or
interpret the terms of this Agreement, or to obtain a declaration of rights
under this Agreement, the prevailing party shall be entitled to reasonable
attorneys' fees, costs (other than the costs of arbitration pursuant to Section
13) and expenses incurred in such action or any appeal or enforcement of such
action, in addition to any other relief to which that party may be entitled
under this Agreement.

         18. Voluntary Participation. Each of the parties acknowledges that he
or it has read the Agreement, and that he or it enters into this Agreement
freely, voluntarily, without coercion and based on the party's own judgment and
not in reliance upon any representations or promises made by the others, except
those contained in this Agreement.

         19. Method of Execution. This Agreement may be executed in counterparts
and each counterpart shall be deemed a duplicate original.

         20. Governing Law. This Agreement is deemed to have been made and
entered into in the State of California and shall in all respects be
interpreted, enforced and governed under the laws of the State of California
without regard to the conflicts of laws policies thereof. The language of
all parts of this Agreement shall in all cases be construed as a whole
according to its fair meaning and not strictly for or against any party.

         21. Severability. The provisions of this Agreement are severable and
should any provision of this Agreement be declared or be determined by any
arbitrator or court to be illegal or invalid, any such provision shall be
stricken, and the validity of the remaining parts, terms or provisions shall not
be affected.

         22. Older Workers Benefit Protection Act. Pursuant to the requirements
of the Older Workers Benefit Protection Act, Mr. Mandles has up to 21 days from
October 29, 2002 to consider and sign this Agreement, although Mr. Mandles may
accept it at any time within those 21 days. Mr. Mandles hereby acknowledges that
he has consulted an attorney or been advised to consult an attorney about this
Agreement. Once Mr. Mandles accepts the terms of this Agreement and signs this
Agreement, he has seven days to revoke his acceptance. To revoke this Agreement,
Mr. Mandles must send to the CEO a written statement of revocation by

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                                                         -----------     -------

<PAGE>

registered mail, return receipt requested. If Mr. Mandles does not timely revoke
this Agreement, this Agreement shall become effective on the eighth day after he
signs it ("Effective Date").

         23. Notices.

                  (a) Any notice required or permitted to be given pursuant to
this Agreement shall be in writing and delivered in person, or sent prepaid by
certified mail, bonded messenger or overnight express, to the party named at the
address set forth below or at such other address as either party may hereafter
designate in writing to the other party:

                  MR. MANDLES: Martinn H. Mandles
                               ABM Industries Incorporated
                               2029 Century Park East Suite 3160
                               Los Angeles, CA 90067

                               with a copy to:

                               Martinn H. Mandles
                               2465 Century Hill
                               Los Angeles, CA 90067

                  ABM:         ABM Industries Incorporated
                               160 Pacific Avenue, Suite 222
                               San Francisco, CA 94111
                               Attention: President & CEO

                               with a copy to:

                               ABM Industries Incorporated
                               160 Pacific Avenue, Suite 222
                               San Francisco, CA 94111
                               Attention: Sr. VP & Chief Employment Counsel

                  (b) Any such notice shall be assumed to have been received
when delivered in person, or forty-eight (48) hours after being sent in the
manner specified above.

         24. Interpretation. When a reference is made in this Agreement to
Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. Whenever the words "include," "includes" or "including" are
used in this Agreement they shall be deemed to be followed by the words "without
limitation."

                  [Remainder of page left intentionally blank.]

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         25. Entire Agreement. Except as expressly provided herein, this
Agreement sets forth the entire agreement between the parties as to the subject
matter hereof and supersedes any and all prior oral or written agreements or
understandings between the parties. No waiver, alteration or modification of any
of the provisions of this Agreement shall be binding unless in writing and
signed by the party against whom enforcement of the waiver, change or
modification is sought. Failure or delay on the part of either party to enforce
any right, power or privilege under this Agreement shall not be deemed to
constitute a waiver thereof.

Date: October 29, 2002           /s/ Martinn H. Mandles
                                 -----------------------------------------
                                             Martinn H. Mandles

Date: October 29, 2002           ABM INDUSTRIES INCORPORATED

                                 By: /s/ Henrik C. Slipsager
                                     -------------------------------------
                                             Henrik C. Slipsager
                                     President and Chief Executive Officer

Page 16 of 16

</TEXT>
</DOCUMENT>
