Director Indemnification Agreement - NaviSite Inc. and Stephen D.R. Moore
AMENDED AND RESTATED DIRECTOR INDEMNIFICATION AGREEMENT
This Agreement is made as of the 23/rd/ day of February, 2001, by and
between NaviSite, Inc., a Delaware corporation (the "Corporation"), and Stephen
D.R. Moore ("Indemnitee"), a director of the Corporation.
WHEREAS, it is essential to the Corporation to retain and attract as
directors the most capable persons available; and
WHEREAS, it is the express policy of the Corporation to indemnify its
directors so as to provide them with the maximum possible protection permitted
by law; and
WHEREAS, Indemnitee does not regard the protection available under the
Corporation's Amended and Restated Certificate of Incorporation, insurance and
the Director Indemnification Agreement by and between the Corporation and
Indemnitee, dated as of October 27, 1999 (the "Original Agreement"), as adequate
in the present circumstances, and may not be willing to serve or remain as a
director without adequate protection; and
WHEREAS, the Corporation has requested that the Indemnitee serve, and
pursuant to the terms and conditions set forth herein the Indemnitee agrees to
serve, as a member of a Special Committee of the Board of Directors (the
"Special Committee"); and
WHEREAS, the Corporation desires Indemnitee to serve, or continue to serve,
as a director of the Corporation.
NOW THEREFORE, the Corporation and Indemnitee do hereby agree as follows:
1. Agreement to Serve. Compensation:
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(a) Indemnitee agrees to serve or continue to serve as a director of
the Corporation for so long as he is duly elected or appointed or until such
time as he tenders his resignation in writing.
(b) Indemnitee agrees to serve on the Special Committee on the terms
provided for herein so long as such appointment by the Board of Directors of the
Corporation remains in effect. The Indemnittee may, however, resign from such
position at any time and for any reason. The Corporation's obligations hereunder
shall remain in effect notwithstanding any termination of appointment,
resignation or dissolution of the Special Committee. In consideration for
Indemnitee's services as a member of the Special Committee, the Corporation
shall (i) grant Indemnitee a fully-vested non-qualified stock option to purchase
10,000 shares of the Company's common stock, at a per share price of $1.875 per
share, effective as of February 23, 2001 and (ii) pay Indemnitee $500 per hour
for his service as a member of the Special Committee. Such a fee shall be
payable to Indemnitee upon submission of a written statement to the General
Counsel of the Corporation in reasonable detail, setting forth the services
performed, the dates the services were rendered
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and the time allocated for the services. In addition, Indemnitee shall be
reimbursed by the Corporation for his reasonable documented out-of-pocket
expenses incurred in connection with his service on the Special Committee in a
manner consistent with the Corporation's reimbursement of expenses for members
of the Board of Directors generally; provided, however, that any amounts in
excess of $25,000 shall be approved in advance by the Board of Directors.
2. Definitions. As used in this Agreement:
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(a) The term "Proceeding" shall include any threatened, pending or
completed action, suit or proceeding, whether brought by or in the right of the
Corporation or otherwise and whether of a civil, criminal, administrative or
investigative nature, and any appeal therefrom.
(b) The term "Corporate Status" shall mean the status of a person who
is or was a director of the Corporation including, without limitation, as a
member of the Special Committee, or is or was serving, or has agreed to serve,
at the request of the Corporation, as a director, officer, partner, trustee,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise.
(c) The term "Expenses" shall include, without limitation, attorneys'
fees, retainers, court costs, transcript costs, fees of experts, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees and other disbursements or expenses of the types
customarily incurred in connection with investigations, judicial or
administrative proceedings or appeals, but shall not include the amount of
judgments, fines or penalties against Indemnitee or amounts paid in settlement
in connection with such matters.
(d) References to "other enterprise" shall include employee benefit
plans; references to "fines" shall include any excise tax assessed with respect
to any employee benefit plan; references to "serving at the request of the
Corporation" shall include any service as a director, officer, employee or agent
of the Corporation which imposes duties on, or involves services by, such
director, officer, employee or agent with respect to an employee benefit plan,
its participants or beneficiaries; and a person who acted in good faith and in a
manner he reasonably believed to be in the interests of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the Corporation" as referred to in
this Agreement.
3. Indemnification in Third-Party Proceedings. The Corporation shall
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indemnify Indemnitee in accordance with the provisions of the Paragraph 3 if
Indemnitee was or is a party to or threatened to be made a party to or otherwise
involved in any Proceeding (other than a Proceeding by or in the right of the
Corporation to procure a judgment in its favor) by reason of Indemnitee's
Corporate Status or by reason of any action alleged to have been taken or
omitted in connection therewith, against all Expenses, judgments, fines,
penalties and amounts paid in settlement actually and reasonably incurred by
Indemnitee or on Indemnitee's behalf in connection with such Proceeding, if
Indemnitee acted in good faith
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and in a manner which Indemnitee reasonably believed to be in, or not opposed
to, the best interests of the Corporation and, with respect to any criminal
Proceeding, had no reasonable cause to believe that Indemnitee's conduct was
unlawful. The termination of any Proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere, or its equivalent, shall not, of
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itself, create a presumption that Indemnitee did not act in good faith and in a
manner which Indemnitee reasonably believed to be in, or not opposed to, the
best interests of the Corporation and, with respect to any criminal Proceeding,
had reasonable cause to believe that Indemnitee's conduct was unlawful.
4. Indemnification in Proceedings by or in the Right of the Corporation.
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The Corporation shall indemnify Indemnitee in accordance with the provisions of
this Paragraph 4 if Indemnitee is a party to or threatened to be made a party to
or otherwise involved in any Proceeding by or in the right of the Corporation to
procure a judgment in its favor by reason of Indemnitee's Corporate Status or by
reason of any action alleged to have been taken or omitted in connection
therewith, against all Expenses and, to the extent permitted by law, judgment,
fines, penalties and amounts paid in settlement actually and reasonably incurred
by Indemnitee or on Indemnitee's behalf in connection with such Proceeding, if
Indemnitee acted in good faith and in a manner which Indemnitee reasonably
believed to be in, or not opposed to, the best interests or the Corporation,
except that no indemnification shall be made under this Paragraph 4 in respect
to any claim, issue or matter as to which Indemnitee shall have been adjudged to
be liable to the Corporation, unless and only to the extent that the Court of
Chancery of Delaware shall determine upon application that, despite the
adjudication of such liability but in view of all the circumstances of the case,
Indemnitee is fairly and reasonably entitled to indemnity for such Expenses as
the Court of Chancery shall deem proper.
5. Exceptions to Right of Indemnification. Notwithstanding anything to
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the contrary in this Agreement, except as set forth in Paragraph 10, the
Corporation shall not indemnify Indemnitee in connection with a Proceeding (or
part thereof) initiated by Indemnitee unless the initiation thereof was approved
by the Board of Directors of the Corporation. Notwithstanding anything to the
contrary in this Agreement, the Corporation shall not indemnify Indemnitee to
the extent Indemnitee is reimbursed from the proceeds of insurance, and in the
event the Corporation makes any indemnification payments to Indemnitee and
Indemnitee is subsequently reimbursed from the proceeds of insurance, Indemnitee
shall promptly refund such indemnification payments to the Corporation to the
extent of such insurance reimbursement.
6. Indemnification of Expenses. Notwithstanding any other provision of
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this Agreement, to the extent that Indemnitee has been successful, on the merits
or otherwise, in defense of any Proceeding or in defense of any claim, issue or
matter therein, Indemnitee shall be indemnified against all Expenses incurred by
Indemnitee or on Indemnitee's behalf in connection therewith. Without limiting
the foregoing, if any Proceeding or any claim, issue or matter therein is
disposed of, on the merits or otherwise (including a disposition without
prejudice), without (i) the disposition being adverse to the Indemnitee, (ii) an
adjudication that the Indemnitee was liable to the Corporation, (iii) a plea of
guilty or nolo contendere by the Indemnitee, (iv) an adjudication that the
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Indemnitee did not act in good
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faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation, and (v) with respect to any criminal proceeding,
an adjudication that the Indemnitee had reasonable cause to believe his conduct
was unlawful, Indemnitee shall be considered for the purposes hereof to have
been wholly successful with respect thereto. In addition, notwithstanding any
other provision contained in this Agreement, to the extent that Indemnitee is,
by reason of his Corporate Status, a witness to any Proceeding to which
Indemnitee is not a party, Indemnitee shall be indemnified and held harmless
from all Expenses actually and reasonable incurred by Indemnitee in connection
therewith.
7. Notification and Defense of Claim. As a condition precedent to
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Indemnitee's right to be indemnified, Indemnitee agrees to notify the
Corporation in writing as soon as reasonably practicable of any Proceeding for
which indemnity will or could be sought by Indemnitee and provide the
Corporation with a copy of any summons, citation, subpoena, complaint,
indictment, information or other document relating to such Proceeding with which
Indemnitee is served; provided, however, that the failure to give such notice
shall not relieve the Corporation of its obligations to Indemnitee under this
Agreement, except to the extent, if any, that the Corporation is actually
prejudiced by the failure to give such notice. With respect to any Proceeding of
which the Corporation is so notified, the Corporation will be entitled to
participate therein at its own expense and/or to assume the defense thereof at
its own expense, with legal counsel reasonably acceptable to Indemnitee. After
notice from the Corporation to Indemnitee of its election so to assume such
defense, the Corporation shall not be liable to the Indemnitee for any legal or
other expenses subsequently incurred by the Indemnitee in connection with such
Proceeding, other than as provided below in this Paragraph 7. Indemnitee shall
have the right to employ Indemnitee's own counsel in connection with such
Proceeding, but the fees and expenses of such counsel incurred after notice from
the Corporation of its assumption of the defense thereof shall be at the expense
of Indemnitee unless (i) the employment of counsel by Indemnitee has been
authorized by the Corporation, (ii) counsel to Indemnitee shall have reasonably
concluded that there may be a conflict of interest or position on any
significant issue between the Corporation and Indemnitee in the conduct of the
defense of such Proceeding or (iii) the Corporation shall not in fact have
employed counsel to assume the defense of such Proceeding, in each of which
cases the fees and expenses of counsel for Indemnitee shall be at the expense of
the Corporation, except as otherwise expressly provided by this Agreement. The
Corporation shall not be entitled, without the consent of Indemnitee, to assume
the defense of any claim brought by or in the right of the Corporation or as to
which counsel for Indemnitee shall have reasonably made the conclusion provided
for in clause (ii) above. The Corporation shall not be required to indemnify
Indemnitee under this Agreement for any amounts paid in settlement of any
Proceeding effected without its written consent. The Corporation shall not
settle any Proceeding in any manner which would impose any penalty or limitation
on Indemnitee without Indemnitee's written consent. Neither the Corporation nor
the Indemnitee will unreasonably withhold its consent to any proposed
settlement.
8. Advancement of Expenses. Any Expenses incurred by Indemnitee in
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connection with any such Proceeding to which Indemnitee was or is a witness or a
party or is threatened to be a party by reason of his Corporate Status or by
reason of any action alleged to have been taken or omitted in connection
therewith shall be paid by the Corporation in
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advance of the final disposition of such matter; provided, however, that the
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payment of such Expenses incurred by the Indemnitee in advance of the final
disposition of such matter shall be made only upon receipt of an undertaking by
or on behalf of the Indemnitee to repay all amounts so advanced in the event
that it shall ultimately be determined that the Indemnitee is not entitled to be
indemnified by the Corporation as authorized in this Agreement; and further
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provided that no such advancement of Expenses shall be made if it its
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determined that (i) Indemnitee did not act in good faith and in a manner
Indemnitee reasonably believes to be in, or not opposed to, the best interests
of the Corporation, or (ii) with respect to any criminal action or proceeding,
the Indemnitee had reasonable cause to believe Indemnitee's conduct was
unlawful. Such undertaking shall be accepted without reference to the financial
ability of Indemnitee to make such repayment. If, pursuant to the terms of this
Agreement, Indemnitee is not entitled to be indemnified with respect to such
Proceeding, then such Expenses shall be paid within 60 days after the receipt by
Indemnitee of the written request by the Corporation for the Indemnitee to make
payments to the Corporation.
9. Procedure for Indemnification. In order to obtain indemnification
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pursuant to Paragraphs 3, 4 or 6 of this Agreement, Indemnitee shall submit to
the Corporation a written request, including in such request such documentation
and information as is reasonably available to Indemnitee and is reasonably
necessary to determine whether and to what extent Indemnitee is entitled to
indemnification or advancement of Expenses. Any such indemnification or
advancement of Expenses shall be made promptly, and in any event within 60 days
after receipt by the Corporation of the written request of the Indemnitee,
unless with respect to requests under Paragraphs 3 or 4 the Corporation
determines within such 60-day period that such Indemnitee did not meet the
applicable standard of conduct set forth in Paragraphs 3 or 4, as the case may
be. Such determination, and any determination pursuant to Section 8 that
advanced Expenses must be repaid to the Corporation, shall be made in each
instance (a) by a majority vote of the directors of the Corporation consisting
of persons who are not at that time parties to the Proceeding ("Disinterested
Directors"), whether or not a quorum, (b) by a committee of Disinterested
Directors designated by majority vote of Disinterested Directors, whether or not
a quorum, (c) if there are no Disinterested Directors, or if Disinterested
Directors so direct, by independent legal counsel (who may, to the extent
permitted by applicable law, be regular legal counsel to the Corporation ) in a
written opinion or (d) by the stockholders.
10. Remedies. The right to indemnification and immediate advancement of
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Expenses as provided by this Agreement shall be enforceable by the Indemnitee in
any court of competent jurisdiction. Unless otherwise required by law, the
burden of proving that indemnification is not appropriate shall be on the
Corporation. Neither the failure of the Corporation to have made a determination
prior to the commencement of such action that indemnification is proper in the
circumstances because Indemnitee has met the applicable standard of conduct, nor
an actual determination by the Corporation pursuant to Paragraph 9 that
Indemnitee has not met such applicable standard of conduct, shall be a defense
to the action or create a presumption that Indemnitee has not met the applicable
standard of conduct. Indemnitee's expenses (of the type described in the
definition of "Expenses" in Paragraph 2 (c)) reasonably incurred in connection
with successfully establishing
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Indemnitee's right to indemnification, in whole or in part, in any such
Proceeding also shall be indemnified by the Corporation.
11. Partial Indemnification. If Indemnitee is entitled under any
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provision of this Agreement to indemnification by the Corporation for some or a
portion of the Expenses, judgments, fines penalties or amounts paid in
settlement actually and reasonably incurred by Indemnitee or on Indemnitee's
behalf in connection with any Proceeding but not, however, for the total amount
thereof, the Corporation shall nevertheless indemnify Indemnitee for the portion
of such Expenses, judgments, fines, penalties or amounts paid in settlement to
which Indemnitee is entitled.
12. Subrogation. In the event of any payment under this Agreement, the
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Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all papers required and take
all action necessary to secure such rights, including execution of such
documents as are necessary to enable the Corporation to bring suit to enforce
such rights.
13. Term of Agreement. This Agreement shall continue until and terminate
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upon the later of (a) six years after the date that Indemnitee shall have ceased
to serve as a director of the Corporation or, at the request of the Corporation,
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise; (b) the expiration of all applicable
statute of limitations periods for any claim which may be brought against
Indemnitee in a Proceeding as a result of his Corporate Status; or (c) the final
termination of all Proceedings pending on the date set forth in clauses (a) or
(b) in respect of which Indemnitee is granted rights of indemnification or
advancement of Expenses hereunder and of any proceeding commenced by Indemnitee
pursuant to Paragraph 10 of this Agreement relating thereto.
14. Indemnification Hereunder Not Exclusive. The indemnification and
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advancement of Expenses provided by this Agreement shall not be deemed exclusive
of any other rights to which Indemnitee may be entitled under the Certification
of Incorporation, the By-Laws, any agreement, any vote of stockholders or
disinterested directors, the General Corporation law of the State of Delaware,
any other law (common or statutory) or otherwise, both as to action in
Indemnitee's official corporate capacity and as to action in another capacity
while holding office for the Corporation. Nothing contained in this Agreement
shall be deemed to prohibit the Corporation from purchasing and maintaining
insurance, at its expense, to protect itself or the Indemnitee against any
expense, liability or loss incurred by it or Indemnitee in any such capacity, or
arising out of Indemnitee's status as such, whether or not Indemnitee would be
indemnified against such expense, liability or loss under this Agreement;
provided that the Corporation shall not be liable under this Agreement to make
any payment of amounts otherwise indemnifiable hereunder if and to the extent
that Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise, including as provided in Section 5
hereof.
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15. No Special Rights. Nothing herein shall confer upon Indemnitee any
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right to continue to serve as a director of the Corporation for any period of
time or, except as expressly provided herein, at any particular rate of
compensation.
16. Savings Clause. If this Agreement or any portion thereof shall be
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invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify Indemnitee as to Expenses, judgments,
fines, penalties and amounts paid in settlement with respect to any Proceeding
to the full extent permitted by any applicable portion of this Agreement that
shall not have been invalidated and to the fullest extent permitted by
applicable law.
17. Counterparts; Facsimile Signatures. This Agreement maybe executed in
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two counterparts, both of which together shall constitute the original
instrument. This Agreement may be executed by facsimile signatures.
18. Successors and Assigns. This Agreement shall be binding upon the
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Corporation and its successors and assigns and shall inure to the benefit of the
estate, heirs, executors, administrators and personal representatives of
Indemnitee.
19. Headings. The headings of the paragraphs of this Agreement are
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inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
20. Modification and Waiver. This Agreement amends and restates in its
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entirety the Original Agreement. This Agreement may be amended from time to time
to reflect changes in Delaware law or for other reasons. 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
provision hereof nor shall any such waiver constitute a continuing waiver.
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21. Notices. All notices, requests, demands and other communications
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hereunder shall be in writing and shall be deemed to have been given (i) when
delivered by hand or (ii) if mailed by certified or registered mail with postage
prepaid, on the third day after the date on which it is so mailed:
(a) if to the Indemnitee, to:
Stephen D.R. Moore
Chief Executive Officer
Stearn International Inc.
275 Dan Road
Canton, Massachusetts 02021
with a copy to :
Cameron Read, Esq.
Exchange Place
53 State Street
Boston, Massachusetts 02109
(b) if to the Corporation, to:
NaviSite, Inc.
400 Minuteman Road
Andover, Massachusetts 01810
Attn: Joel B. Rosen, Chief Executive Officer
or to such other address as may have been furnished to Indemnitee by the
Corporation or to the Corporation by Indemnitee, as the case may be.
22. Applicable Law. This Agreement shall be governed by and constructed
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in accordance with the laws of the State of Delaware.
23. Enforcement. The Corporation expressly confirms and agrees that it
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has entered into this Agreement in order to induce Indemnitee to continue to
serve as a director of the Corporation and acknowledges that Indemnitee is
relying upon this Agreement in continuing in such capacity.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
NAVISITE, INC.
By /s/ Joel B. Rosen
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Name: Joel B. Rosen
Title: Chief Executive Officer
/s/ Stephen D.R. Moore
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Stephen D.R. Moore
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