INDEMNIFICATION AGREEMENT
Exhibit 10.5
AGREEMENT, dated as of ___, 2009, by and between ABM Industries Incorporated, a
Delaware corporation (the “Company”), and [___] (the “Indemnitee”).
WHEREAS, it is essential to the Company to retain and attract as directors and officers the
most capable persons available;
WHEREAS, the Indemnitee is a director and/or officer of the Company;
WHEREAS, the Company and the Indemnitee recognize the increased risk of litigation and other
claims being asserted against directors and officers of companies in today’s environment;
WHEREAS, basic protection against undue risk of personal liability of directors and officers
heretofore has been provided through insurance coverage providing reasonable protection at
reasonable cost, and the Indemnitee has relied on the availability of such coverage; but as a
result of substantial changes in the marketplace for such insurance it has become increasingly
difficult to obtain such insurance on terms providing reasonable protection at reasonable cost;
WHEREAS, the Company’s By-Laws, as amended (the “By-Laws”), require the Company to
indemnify and advance expenses to its directors and officers to the extent provided therein, and
the Indemnitee serves as a director and/or officer of the Company, in part, in reliance on such
provisions in the By-Laws;
WHEREAS, the current difficulty in obtaining adequate director and officer liability insurance
coverage at a reasonable cost, and uncertainties as to the availability of indemnification created
by recent court decisions, have increased the risk that the Company will be unable to retain and
attract as directors and officers the most capable persons available;
WHEREAS, the Company has determined that its inability to retain and attract as directors and
officers the most capable persons would be detrimental to the interests of the Company, and that
Company therefore should seek to assure such persons that indemnification and insurance coverage
will be available in the future; and
WHEREAS, in recognition of the Indemnitee’s need for substantial protection against personal
liability in order to enhance the Indemnitee’s continued service to the Company in an effective
manner, the increasing difficulty in obtaining satisfactory director and officer liability
insurance coverage, and the Indemnitee’s reliance on the By-Laws, and in part to provide the
Indemnitee with specific contractual assurance that the protection promised by the By-Laws will be
available to the Indemnitee (regardless of, among other things, any amendment to or revocation of
the applicable provisions of the By-Laws or any change in the composition of the Company’s Board of
Directors or acquisition transaction relating to the Company), the Company wishes to provide in
this Agreement for the indemnification of and the advancing of expenses to the Indemnitee to the
fullest extent (whether partial or complete) permitted by law and as set
forth in this Agreement, and, to the extent insurance is maintained, for the continued
coverage of the Indemnitee under the directors’ and officers’ liability insurance policy of the
Company.
NOW, THEREFORE, in consideration of the premises and of the Indemnitee continuing to serve the
Company directly or, at its request, as an officer, director, manager, member, partner, tax matters
partner, fiduciary or trustee of, or in any other capacity with, another Person (as defined below)
or any employee benefit plan, and intending to be legally bound hereby, the parties hereto agree as
follows:
1. Certain Definitions. In addition to terms defined elsewhere herein, the following
terms have the following meanings when used in this Agreement:
| (a) | Agreement: shall mean this Indemnification Agreement, as amended from time to time hereafter. | ||
| (b) | Board of Directors: shall mean the Board of Directors of the Company. | ||
| (c) | Claim: means any threatened, asserted, pending or completed civil, criminal, administrative, investigative or other action, suit or proceeding of any kind whatsoever, or any appeal of any kind thereof, or any inquiry or investigation, whether instituted by the Company, any governmental agency or any other party, that the Indemnitee in good faith believes might lead to the institution of any such action, suit or proceeding, whether civil, criminal, administrative, investigative or other, including any arbitration or other alternative dispute resolution mechanism. | ||
| (d) | Indemnifiable Expenses: means (i) all expenses and liabilities, including judgments, fines, penalties, interest, amounts paid in settlement with the approval of the Company, and counsel fees and disbursements (including, without limitation, experts’ fees, court costs, retainers, transcript fees, duplicating, printing and binding costs, as well as telecommunications, postage and courier charges) paid or incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to investigate, defend, be a witness in or participate in, (including on appeal), any Claim relating to any Indemnifiable Event, and (ii) any liabilities which an Indemnitee incurs as a result of acting on behalf of the Company (whether as a fiduciary or otherwise) in connection with the operation, administration or maintenance of an employee benefit plan or any related trust or funding mechanism (whether such liabilities are in the form of excise taxes assessed by the United States Internal Revenue Service, penalties assessed by the Department of Labor, restitutions to such a plan or trust or other funding mechanism or to a participant or beneficiary of such plan, trust or other funding mechanism, or otherwise). | ||
| (e) | Indemnifiable Event: means any act or omission, whether occurring before, on or after the date of this Agreement, arising from the |
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| performance of the Indemnitee’s duties or obligations to the Company or any of its subsidiaries, including in connection with any civil, criminal, administrative, investigative or other action, suit or proceeding to which the Indemnitee may hereafter be made a party by reason of being or having been an officer, director, manager, member, partner, tax matters partner, fiduciary or trustee of, or having served in any other capacity with, another Person or any employee benefit plan at the request of the Company. |
| (f) | Person: means any individual, corporation, firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, governmental entity or other entity. |
2. Basic Indemnification Arrangement; Advancement of Expenses.
(a) In the event that the Indemnitee was, is or becomes subject to, a party to or witness or
other participant in, or is threatened to be made subject to, a party to or witness or other
participant in, a Claim by reason of (or arising in part out of) an Indemnifiable Event, the
Company shall indemnify the Indemnitee, or cause such Indemnitee to be indemnified, to the fullest
extent permitted by Delaware law in effect on the date hereof and as amended from time to time;
provided, however, that no change in Delaware law shall have the effect of reducing
the benefits available to the Indemnitee hereunder based on Delaware law as in effect on the date
hereof or as such benefits may improve as a result of amendments after the date hereof. The rights
of the Indemnitee provided in this Section 2 shall include, without limitation, the rights set
forth in the other sections of this Agreement. Payments of Indemnifiable Expenses shall be made as
soon as practicable but in any event no later than thirty (30) days after written demand is
presented to the Company.
(b) If so requested by the Indemnitee, the Company shall advance, or cause to be advanced
(within two business days of such request), any and all Indemnifiable Expenses incurred by the
Indemnitee (an “Expense Advance”). The Company shall, in accordance with such request (but
without duplication), either (i) pay, or cause to be paid, such Indemnifiable Expenses on behalf of
the Indemnitee, or (ii) reimburse, or cause the reimbursement of, the Indemnitee for such
Indemnifiable Expenses. The Indemnitee’s right to an Expense Advance is absolute and shall not be
subject to any condition that the Board of Directors shall not have determined that the Indemnitee
is not entitled to be indemnified under applicable law. However, the obligation of the Company to
make an Expense Advance pursuant to this Section 2(b) shall be subject to the condition that, if,
when and to the extent that a final judicial determination is made (as to which all rights of
appeal therefrom have been exhausted or lapsed) that the Indemnitee is not entitled to be so
indemnified under applicable law, the Company shall be entitled to be reimbursed by the Indemnitee
(who hereby agrees to reimburse the Company) for all such amounts theretofore paid (it being
understood and agreed that the foregoing agreement by the Indemnitee shall be deemed to satisfy any
requirement that the Indemnitee provide the Company with an undertaking to repay any Expense
Advance if it is ultimately determined that the Indemnitee is not entitled to indemnification under
applicable law). The Indemnitee’s undertaking to repay such Expense Advances shall be unsecured
and interest-free.
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(c) Notwithstanding anything in this Agreement to the contrary, the Indemnitee shall not be
entitled to indemnification or advancement of Indemnifiable Expenses pursuant to this Agreement in
connection with any Claim initiated by the Indemnitee unless (i) the Company has joined in or the
Board of Directors of the Company has authorized or consented to the initiation of such Claim or
(ii) the Claim is one to enforce the Indemnitee’s rights under this Agreement (including an action
pursued by the Indemnitee to secure a determination that the Indemnitee should be indemnified under
applicable law).
(d) The indemnification obligations of the Company under Section 2(a) shall be subject to the
condition that the Board of Directors shall not have determined (by majority vote of directors who
are not parties to the applicable Claim) that the indemnification of the Indemnitee is not proper
in the circumstances because the Indemnitee is not entitled to be indemnified under applicable law.
If the Board of Directors determines that the Indemnitee is not entitled to be indemnified in
whole or in part under applicable law, the Indemnitee shall have the right to commence litigation
in any court in the State of Delaware having subject matter jurisdiction thereof and in which
venue is proper, seeking an initial determination by the court or challenging any such
determination by the Board of Directors or any aspect thereof, including the legal or factual bases
therefor, and the Company hereby consents to service of process and to appear in any such
proceeding. If the Indemnitee commences legal proceedings in a court of competent jurisdiction to
secure a determination that the Indemnitee should be indemnified under applicable law, any
determination made by the Board of Directors that the Indemnitee is not entitled to be indemnified
under applicable law shall not be binding, the Indemnitee shall continue to be entitled to receive
Expense Advances, and the Indemnitee shall not be required to reimburse the Company for any Expense
Advance, unless and until a final judicial determination is made (as to which all rights of appeal
therefrom have been exhausted or lapsed) that the Indemnitee is not entitled to be so indemnified
under applicable law. Any determination by the Board of Directors otherwise shall be conclusive
and binding on the Company and the Indemnitee.
(e) To the extent that the Indemnitee has been successful on the merits or otherwise in
defense of any or all Claims relating in whole or in part to an Indemnifiable Event or in defense
of any issue or matter therein, including dismissal without prejudice, the Indemnitee shall be
indemnified against all Indemnifiable Expenses actually and reasonably incurred in connection
therewith, notwithstanding an earlier determination by the Board of Directors that the Indemnitee
is not entitled to indemnification under applicable law.
3. Indemnification for Additional Expenses. The Company shall indemnify, or cause the
indemnification of, the Indemnitee against any and all Indemnifiable Expenses and, if requested by
the Indemnitee, shall advance such Indemnifiable Expenses to the Indemnitee subject to and in
accordance with Sections 2(b) and (d), which are incurred by the Indemnitee in connection with any
action brought by the Indemnitee for (i) indemnification or an Expense Advance by the Company under
this Agreement and/or (ii) recovery under any directors’ and officers’ liability insurance policies
maintained by the Company, regardless of whether the Indemnitee ultimately is determined to be
entitled to such indemnification, Expense Advance or insurance recovery, as the case may be.
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4. Partial Indemnity. If the Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of the Indemnifiable Expenses in
respect of a Claim but not, however, for all of the total amount thereof, the Company shall
nevertheless indemnify the Indemnitee for the portion thereof to which the Indemnitee is entitled.
5. Burden of Proof. In connection with any determination by the Board of Directors,
any court or otherwise as to whether the Indemnitee is entitled to be indemnified hereunder, the
Board of Directors or court shall presume that the Indemnitee has satisfied the applicable standard
of conduct and is entitled to indemnification, and the burden of proof shall be on the Company or
its representative to establish, by clear and convincing evidence, that the Indemnitee is not so
entitled.
6. Reliance as Safe Harbor. The Indemnitee shall be entitled to indemnification for
any action or omission to act undertaken (i) in good faith reliance upon the records of the
Company, including its financial statements, or upon information, opinions, reports or statements
furnished to the Indemnitee by the officers or employees of the Company or any of its subsidiaries
in the course of their duties, or by committees of the Board of Directors, or by any other Person
as to matters the Indemnitee reasonably believes are within such other Person’s professional or
expert competence, or (ii) on behalf of the Company in furtherance of the interests of the Company
in good faith in reliance upon, and in accordance with, the advice of legal counsel or accountants,
provided such legal counsel or accountants were selected with reasonable care by or on behalf of
the Company. In addition, the knowledge and/or actions, or failures to act, of any director,
officer, agent or employee of the Company shall not be imputed to the Indemnitee for purposes of
determining the right to indemnity hereunder.
7. No Other Presumptions. For purposes of this Agreement, the termination of any
claim, action, suit or proceeding, by judgment, order, settlement (whether with or without court
approval) or conviction, or upon a plea of nolo contendere or its equivalent, shall not create a
presumption that the Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has determined that indemnification is not permitted by
applicable law. In addition, neither the failure of the Board of Directors to have made a
determination as to whether the Indemnitee has met any particular standard of conduct or had any
particular belief, nor an actual determination by the Board of Directors that the Indemnitee has
not met such standard of conduct or did not have such belief, prior to the commencement of legal
proceedings by the Indemnitee to secure a judicial determination that the Indemnitee should be
indemnified under applicable law shall be a defense to the Indemnitee’s claim or create a
presumption that the Indemnitee has not met any particular standard of conduct or did not have any
particular belief.
8. Nonexclusivity, Etc. The rights of the Indemnitee hereunder shall be in addition
to any other rights the Indemnitee may have under the By-Laws, the laws of the State of Delaware,
or otherwise. To the extent that a change in Delaware law or the interpretation thereof (whether
by statute or judicial decision) permits greater indemnification by agreement than would be
afforded currently under the By-Laws, it is the intent of the parties hereto that the Indemnitee
shall enjoy by this Agreement the greater benefits so afforded by such change.
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9. Liability Insurance. To the extent the Company maintains an insurance policy or
policies providing directors’ and officers’ liability insurance, the Indemnitee shall be covered by
such policy or policies, in accordance with its or their terms, to the maximum extent of the
coverage available for the Company directors or officers.
10. Period of Limitations. No legal action shall be brought and no cause of action
shall be asserted by or in the right of the Company against the Indemnitee, the Indemnitee’s
spouse, heirs, executors or personal or legal representatives after the expiration of two years
from the date of accrual of such cause of action, and any claim or cause of action of the Company
shall be extinguished and deemed released unless asserted by the timely filing of a legal action
within such two-year period; provided, however, that if any shorter period of limitations is
otherwise applicable to any such cause of action such shorter period shall govern.
11. Cooperation. During the Indemnitee’s service on the Board of Directors and
thereafter, the Indemnitee shall cooperate with the Company and any Company-affiliated entity in
its or their investigation, defense or prosecution of any potential, current or future legal matter
(including any Claim) in any forum, including, but not limited to, lawsuits, administrative
charges, audits, arbitrations, and internal and external investigations. The Indemnitee’s
cooperation shall include, but shall not be limited to, reviewing and preparing documents and
reports, meeting with attorneys representing the Company or any Company-affiliated entity,
providing truthful testimony, and communicating the Indmenitee’s knowledge of relevant facts to any
attorneys, experts, consultants, investigators, employees or other representatives working on
behalf of the Company or any Company-affiliated entity. Except as required by law, the Indemnitee
agrees to treat all information regarding any such actual or potential investigation or claim as
confidential. The Indemnitee also agrees not to discuss or assist in any litigation, potential
litigation, claim, or potential claim with any individual (or their attorney or investigator) who
is pursuing, or considering pursuing, any claims against the Company or any Company-affiliated
entity unless required by law. In performing the tasks outlined in this Section 11, the Indemnitee
shall be bound by the covenants of good faith and veracity set forth in the Company’s Code of
Business Conduct and Ethics, as amended from time to time, and by all legal obligations. Nothing
in this Section 11 is intended to prevent the Indemnitee from complying in good faith with any
subpoena or other affirmative legal obligation. The Indemnitee agrees to notify the Company as
promptly as practicable in the event that there is a request for information or inquiry pertaining
to the Company, any Company-affiliated entity, or the Indemnitee’s knowledge of or service with the
Company. In performing its responsibilities under this Section 11 at the request or for the
benefit of the Company, the Indemnitee shall be compensated for the Indemnitee’s time at an hourly
rate of $400 per hour; provided, however, that during any period in which the
Indemnitee is a director and/or officer of the Company or is receiving payments from the Company of
any kind, the Indemnitee shall not be so compensated.
12. Amendments, Etc. No supplement, modification or amendment of this Agreement shall
be binding unless executed in writing by both of the parties hereto. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions
hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. In the event
the Company or any of its subsidiaries enters into an indemnification agreement with another
director, officer, agent, fiduciary or manager of the Company or any of its subsidiaries containing
a term or terms more favorable to the indemnitee than the terms
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contained herein (as determined by the Indemnitee), the Indemnitee shall be afforded the
benefit of such more favorable term or terms and such more favorable term or terms shall be deemed
incorporated by reference herein as if set forth in full herein.
13. Subrogation. In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who
shall execute all papers reasonably required and shall do everything that may be reasonably
necessary to secure such rights, including the execution of such documents necessary to enable the
Company effectively to bring suit to enforce such rights.
14. No Duplication of Payments. The Company shall not be liable under this Agreement
to make any payment in connection with any Claim made against the Indemnitee to the extent the
Indemnitee has otherwise actually received payment (under any insurance policy, any provision of
the By-Laws, or otherwise) of the amounts otherwise indemnifiable hereunder.
15. Defense of Claims. The Company shall be entitled to participate in the defense of
any Claim relating to an Indemnifiable Event or to assume the defense thereof, with counsel
reasonably satisfactory to the Indemnitee; provided that if the Indemnitee believes, after
consultation with counsel selected by the Indemnitee, that (i) the use of counsel chosen by the
Company to represent the Indemnitee would present such counsel with an actual or potential conflict
of interest, (ii) the named parties in any such Claim (including any impleaded parties) include the
Company or any subsidiary of the Company and the Indemnitee, and the Indemnitee concludes that
there may be one or more legal defenses available to him or her that are different from or in
addition to those available to the Company or any subsidiary of the Company, or (iii) any such
representation by such counsel would be precluded under the applicable standards of professional
conduct then prevailing, then the Indemnitee shall be entitled to retain separate counsel (but not
more than one law firm plus, if applicable, local counsel in respect of any particular Claim) at
the Company’s expense. The Company shall not be liable to the Indemnitee under this Agreement for
any amounts paid in settlement of any Claim relating to an Indemnifiable Event effected without the
Company’s prior written consent. The Company shall not, without the prior written consent of the
Indemnitee, effect any settlement of any Claim relating to an Indemnifiable Event which the
Indemnitee is or could have been a party unless such settlement solely involves the payment of
money and includes a complete and unconditional release of the Indemnitee from all liability on all
claims that are the subject matter of such Claim. Neither the Company nor the Indemnitee shall
unreasonably withhold its or his or her consent to any proposed settlement; provided that
the Indemnitee may withhold consent to any settlement that does not provide a complete and
unconditional release of the Indemnitee.
16. Binding Effect, Etc. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective successors, (including any
direct or indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company), assigns, spouses, heirs, executors
and personal and legal representatives. The Company shall require and cause any successor (whether
direct or indirect by purchase, merger, consolidation, or otherwise) to all or a significant
portion of the business and/or assets of the Company and/or its subsidiaries, by written agreement
in form and substance satisfactory to the Indemnitee and his or her counsel, expressly to assume
and agree to perform this Agreement in the same manner and to the same extent that the Company
would be
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required to perform if no such succession had taken place. This Agreement shall continue in
effect regardless of whether the Indemnitee continues to serve as an officer and/or director of the
Company of any other entity or enterprise at the request of the Company. Neither this Agreement
nor any duties or responsibilities pursuant hereto may be assigned by the Company to any other
person or entity without the prior written consent of the Indemnitee.
17. Severability. If any provision or provisions of this Agreement shall be held to
be invalid, illegal or unenforceable for any reason whatsoever, (i) the validity, legality and
enforceability of the remaining provisions of this Agreement (including, without limitation, all
portions of any paragraph of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not in
any way be affected or impaired thereby, and (ii) to the fullest extent possible, the provisions of
this Agreement (including, without limitation, all portions of any paragraph of this Agreement
containing any such provision held to be invalid, illegal or unenforceable) shall be construed so
as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable
and to give effect to the terms of this Agreement.
18. Specific Performance, Etc. The parties recognize that if any provision of this
Agreement is violated by the Company, the Indemnitee may be without an adequate remedy at law.
Accordingly, in the event of any such violation, the Indemnitee shall be entitled, if the
Indemnitee so elects, to institute proceedings, either in law or at equity, to obtain damages, to
enforce specific performance, to enjoin such violation, or to obtain any relief or any combination
of the foregoing as the Indemnitee may elect to pursue.
19. Notices. All notices, requests, consents and other communications hereunder to
any party shall be deemed to be sufficient if contained in a written document delivered in person
or sent by telecopy, nationally recognized overnight courier or personal delivery, addressed to
such party at the address set forth below or such other address as may hereafter be designated on
the signature pages of this Agreement or in writing by such party to the other parties:
(a) If to the Company, to:
ABM Industries Incorporated
000 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Attn: General Counsel
000 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Attn: General Counsel
(b) If to the Indemnitee, to the address set forth on Annex
A hereto.
20. Counterparts. This Agreement may be executed in counterparts, each of which shall
for all purposes be deemed to be an original but all of which together shall constitute one and the
same agreement. Only one such counterpart signed by the party against whom enforceability is
sought needs to be produced to evidence the existence of this Agreement.
21. Headings. The headings of the sections and paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this Agreement or to
affect the construction or interpretation thereof.
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22. Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware applicable to contracts made and to be performed
in such state without giving effect to the principles of conflicts of laws.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.
| ABM INDUSTRIES INCORPORATED | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| [NAME] | ||||||
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Annex A
| Name and Business Address. | ||||
Attn: |
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Tel:
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Fax:
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