INDEMNIFICATION AGREEMENT
This Agreement is made as of the ____ day of
___________________________ 19___, by and between EGGHEAD, INC., a
Washington corporation (the "Corporation") and _________________ (the
"Indemnitee"), with reference to the following facts:
The Indemnitee is currently serving as a Director and/or Officer
of the Corporation and the Corporation wishes the Indemnitee to continue
in such capacity. The Indemnitee is willing, under certain
circumstances, to continue in such capacity.
The Indemnitee has indicated that he does not regard the
indemnities available under the Corporation's Bylaws and any insurance
remaining in effect as adequate to protect him against the risks
associated with his service to the Corporation.
In order to induce the Indemnitee to continue to serve as a
Director and/or Officer of the Corporation and in consideration for his
continued service, the parties hereby agree as follows:
(1) Definition:
As used in this Agreement:
(a) "Action" means any actual or threatened claim, suit or
proceeding, whether civil, criminal, administrative or investigative.
(b) "Another Enterprise" means a corporation (other than the
Corporation), partnership, joint venture, trust, association, committee,
employee benefit plan or other group or entity.
(c) "Corporation" means EGGHEAD, INC. and any predecessor to it
and any constituent corporation (including any constituent of a
constituent) absorbed by the Corporation in a consolidation or merger.
(d) "Loss" means loss, liability, expenses (including attorneys'
fees), judgments, fines, ERISA excise taxes or penalties and amounts to
be paid in settlement, actually and reasonably incurred or suffered by
the Indemnitee in connection with an Action.
(e) "Director or Officer" means each person who is serving or who
has served as a director or officer of the Corporation or, at the
request of the Corporation, as a director, officer, partner, trustee,
employee or agent of Another Enterprise.
(f) "Indemnitee" means each person who was, is or is threatened
to be made a party to or is involved (including without limitation, as a
witness) in an Action because the person is or was a Director or Officer
of the Corporation.
(2) Right to Indemnification: The Corporation shall indemnify
and hold the Indemnitee harmless against any and all Loss except for
Losses arising out of- (a) the Indemnitee's acts or omissions finally
adjudged to be intentional misconduct or a knowing violation of law, (b)
the Indemnitee's approval of certain distributions by such Indemnitee
which are finally adjudged to be in violation of RCW 23B.08.310 or (c)
any transaction in which it is finally adjudged that the Indemnitee
personally received a benefit in money, property or services to which
the Indemnitee was not legally entitled. Except as provided in Section
(4) of this Agreement, the Corporation shall not indemnify the
Indemnitee in connection with an Action (or part thereof) initiated by
the Indemnitee unless such Action (or part thereof) was authorized by
the board of directors of the Corporation.
(3) Burden of Proof and Procedure for Payments:
(a) The Indemnitee shall be presumed to be entitled to
indemnification under this Agreement upon submission of a written claim,
which may be in the form of Exhibit A hereto (including a claim for
expenses incurred in defending any Action in advance of its final
disposition, where the undertaking in (b) below has been tendered to the
Corporation), and thereafter the Corporation shall have the burden of
proof to overcome the presumption that the Indemnitee is so entitled.
(b) The right to indemnification conferred in this Agreement
shall include the right to be paid by the Corporation all expenses
(including attorneys' fees) incurred in defending any Action in advance
of its final disposition; provided, however, that the payment of such
expenses in advance of the final disposition of an Action shall be made
upon delivery to the Corporation of an undertaking, by or on behalf of
the Indemnitee, which may be in the form of Exhibit B hereto, to repay
all amounts so advanced if it shall ultimately be determined that the
Indemnitee is not entitled to be indemnified under this Agreement or
otherwise.
(4) Right of the Indemnitee to Bring Suit: If a claim under this
Agreement is not paid in full by the Corporation within 60 days after a
written claim has been received by the Corporation, except in the case
of a claim for expenses incurred in defending a proceeding in advance of
its final disposition, in which case the applicable period shall be 20
days, the Indemnitee may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and, to the extent
successful in whole or in part, the Indemnitee shall be entitled to be
paid also the expense of prosecuting such claim. Neither the failure of
the Corporation (including its board of directors, its shareholders or
independent legal counsel) to have made a determination prior to the
commencement of such action that indemnification of or reimbursement or
advancement of expenses to the Indemnitee is proper in the
circumstances, nor an actual determination by the Corporation (including
the board of directors, its shareholders or independent legal counsel)
that the Indemnitee is not entitled to indemnification or to the
reimbursement or advancement of expenses, shall be a defense to the
action or create a presumption that the Indemnitee is not so entitled.
(5) Nonexclusivity of Rights: The right to indemnification and
the payment of expenses incurred in defending an Action in advance of
its final disposition conferred in this Agreement shall not be exclusive
of any other right which any person may have or hereafter acquire under
any statute, provision of the Articles of Incorporation, Bylaws, other
agreement, vote of shareholders or disinterested directors, insurance
policy or otherwise.
(6) Continuation of Rights: Rights of indemnification under this
Agreement shall continue as to an Indemnitee who has ceased to be a
Director or Officer, and shall inure to the benefit of his heirs,
executors and administrators.
(7) Severability: If any provision of this Agreement or any
application thereof shall be invalid, unenforceable or contrary to
applicable law, the remainder of this Agreement, or the application of
such provisions to circumstances other than those as to which it is held
invalid, unenforceable or contrary to applicable law, shall not be
affected thereby and shall continue in full force and effect.
(8) Gender: Whenever the context requires, the gender of all
words used herein shall include the masculine, feminine and neuter.
(9) Governing Law: This Agreement shall be governed by and
construed in accordance with the laws of the State of Washington.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the date first written above.
EGGHEAD, INC. INDEMNITEE
By By
Its Its
Name typed or printed Name typed or printed
EXHIBIT A
STATEMENT OF REQUEST FOR INDEMNIFICATION
STATE 0F
COUNTY OF
I, _______________________________________________, being first
duly sworn, do depose and say as follows:
1. This Statement is submitted pursuant to the Indemnification
Agreement (the "Agreement") dated ____________________, 19___, between
EGGHEAD, INC., a Washington corporation, (the "Corporation") and the
undersigned.
2. I am requesting indemnification against Losses, as defined in
the Agreement, all of which have been actually and reasonably incurred
or suffered by me or on my behalf in connection with an actual or
threatened claim, suit or proceeding to which I am a party or am
threatened to be made a party by reason of the fact that I am or was a
director or officer of the Corporation.
3. With respect to all matters related to such losses, I did not:
(a) engage in intentional misconduct or a knowing violation of law, (b)
approve distributions in violation of RCW 23B.08.310 or (c) personally
receive a benefit to which I was not legally entitled.
4. I am requesting indemnification against the following
liabilities:
Signature
Name typed or printed
Subscribed and sworn to before me this _____ day
of________________, 19_____.
Notary Public in and for the State
of Washington, residing
at________________________
My commission expires
________________________
EXHIBIT B
STATEMENT OF UNDERTAKING
STATE OF
COUNTY OF
I, ______________________, being first duly sworn, do depose and
say as follows:
1. This Statement is submitted pursuant to the Indemnification
Agreement (the "Agreement") dated ____________________, 19 ___, between
EGGHEAD, INC., a Washington corporation (the "Corporation") and the
undersigned.
2. I am requesting payment of certain expenses incurred in
defending an Action, as defined in the Agreement, in advance of its
final disposition.
3. I hereby undertake to repay this payment of expenses if it is
ultimately determined that I am not entitled to be indemnified by the
Corporation.
4. The expenses for which advancement is requested are as
follows:
Signature
Name typed or printed
Subscribed and sworn to before me this _____ day of
_______________, 19____.
Notary Public in and for the
State of Washington, residing
at
My commission expires