Exhibit 10.20

 

FORM OF INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement (“Agreement”) is made by and between Sharper
Image Corporation, a Delaware corporation (the “Company”), and the person whose
signature appears below under the caption “Indemnitee” (“Indemnitee”).

 

WHEREAS, the Company and Indemnitee recognize the difficulty in obtaining
directors’ and officers’ liability insurance, the cost of such insurance and the
limited scope of coverage of such insurance;

 

WHEREAS, the Company and Indemnitee further recognize the substantial increase
in corporate litigation in general, subjecting officers and directors to
expensive litigation risks at the same time as the availability and coverage of
liability insurance has been severely limited;

 

WHEREAS, Indemnitee does not regard the current protection available as adequate
under the present circumstances, and Indemnitee and other officers and directors
of the Company are relying on the existence of this Agreement in continuing to
serve as officers and directors of the Company; and

 

WHEREAS, the Company desires to continue to attract and retain the services of
highly qualified individuals, such as Indemnitee, to serve as officers and
directors of the Company and to indemnify its officers and directors so as to
provide them with the maximum protection permitted by law.

 

NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:

 

1. Indemnification.

 

(a) Third Party Actions. The Company shall indemnify and hold harmless
Indemnitee if Indemnitee was or is a party or is threatened to be made a party
to, or is involved in any threatened, pending, or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the Company) by reason of the fact that
Indemnitee is or was a director or officer of the Company, or is or was serving
at the request of the Company as a director or officer of another corporation,
partnership, joint venture trust or other enterprise, against expenses
(including attorneys’ fees), judgments, fines and amounts paid in settlement (if
such settlement is in advance and in writing approved by the Company) actually
and reasonably incurred by Indemnitee in connection with such action, suit or
proceeding if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company, and with respect to any criminal action or proceeding, had no
reasonable cause to believe Indemnitee’s conduct was unlawful. The termination
of any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, in 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 interest of
the Company, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that Indemnitee’s conduct was unlawful.

 

(b) Actions by or in the Right of the Company. The Company shall indemnify and
hold harmless Indemnitee if Indemnitee was or is a party or is threatened to be
made a party to, or is involved in any threatened, pending or completed action
or suit by or in the right of the Company to procure a judgment in its favor by
reason of the fact that Indemnitee is or was a director or officer of the
Company, or is or was serving at the request of the Company as a director or
officer of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys’ fees) and amounts paid in
settlement (if such settlement is in advance and in writing approved by the
Company) actually and reasonably incurred by Indemnitee in connection with the
defense or settlement of such action or suit if Indemnitee acted in good faith
and in a manner Indemnitee reasonably believed to be in or not opposed to the
best interests of the Company, except that, if applicable law so provides, no
indemnification shall be made in respect of any claim, issue or matter as to
which Indemnitee shall have been adjudged to be liable to the Company unless and
only to the extent that the Delaware Court of Chancery or the court in which

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such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
Indemnitee is fairly and reasonably entitled to indemnity for such expenses
which the Delaware Court of Chancery or such other court shall deem proper.
Notwithstanding any other provision of this Agreement, Indemnitee shall not be
indemnified hereunder for any expenses or amounts paid in settlement with
respect to any action to recover short-swing profits under Section 16(b) of the
Securities Exchange Act of 1934, as amended.

 

(c) Mandatory Payment of Expenses. To the extent that Indemnitee has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in Subsections (a) and (b) of this Section 1 or in
defense of any claim, issue or matter therein, Indemnitee shall be indemnified
against expenses (including attorneys’ fees) actually and reasonably incurred by
Indemnitee in connection therewith.

 

(d) Determination of Conduct. Any indemnification under Subsections (a) and (b)
of this Section 1 (unless ordered by a court) shall be made by the Company only
as authorized in the specific case upon a determination that the indemnification
of Indemnitee is proper in the circumstances because Indemnitee has met the
applicable standard of conduct set forth in Subsections (a) and (b) of this
Section 1. Such determination shall be made (1) by a majority vote of the
disinterested directors, even though less than a quorum, (2) by independent
legal counsel in a written opinion or (3) by the stockholders. Notwithstanding
the foregoing, Indemnitee shall be entitled to contest any determination that
Indemnitee has not met the applicable standard of conduct set forth in
Subsections (a) and (b) of this Section 1 by petitioning a court of competent
jurisdiction.

 

(e) Selection of Independent Counsel. If the determination of entitlement to
indemnification is to be made by independent counsel pursuant to Subsection (d)
of this Section 1, the independent counsel shall be selected as provided in this
Subsection (e). The independent counsel shall be selected jointly by Indemnitee
and the Company. If Indemnitee and the Company cannot agree on a selection for
the independent counsel, either party may petition the Delaware Court of
Chancery or other court of competent jurisdiction to resolve the issue or to
make its own provisions for the selection of independent counsel. The Company
shall pay any and all reasonable fees and expenses of independent counsel
incurred by such independent counsel in connection with acting pursuant to
Subsection (d) of this Section 1, and the Company shall pay all reasonable fees
and expenses incident to the procedures of this Subsection (e), regardless of
the manner in which such independent counsel was selected or appointed.

 

2. Expenses; Indemnification Procedure.

 

(a) Advancement of Expenses. Expenses incurred in defending a civil or criminal
action, suit or proceeding by Indemnitee, if Indemnitee is determined to be
entitled to indemnification pursuant to Subsection (a) or (b) of Section 1,
shall be paid by the Company in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf of Indemnitee
to repay such amount if it shall ultimately be determined that Indemnitee is not
entitled to be indemnified by the Company as authorized by this Agreement (the
“Undertaking”); provided, however, that the Company shall not be required to
advance expenses to Indemnitee in connection with any proceeding (or part
thereof) initiated by Indemnitee unless the proceeding was authorized in advance
by the board of directors of the Company; and provided further that no advance
shall be made by the Company to Indemnitee in any action, suit or proceeding,
whether civil, criminal, administrative or investigative, if a determination is
reasonably and promptly made (i) by a majority vote of disinterested directors
or (ii) by independent legal counsel in a written opinion, that the facts known
to the decision-making party at the time such determination is made demonstrate
clearly and convincingly that Indemnitee acted in bad faith or in a manner that
Indemnitee did not believe to be in or not opposed to the best interests of the
Company. Any advances the Company is obligated to make hereunder, subject to the
foregoing provisos, shall be paid by the Company to Indemnitee within twenty
(20) days following receipt of the Undertaking. Indemnitee shall be entitled to
receive interim payments of expenses pursuant to this Subsection (a) unless and
until such defense may be finally adjudicated by court order or judgment from
which no further right of appeal exists.

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(b) Notice/Cooperation by Indemnitee. Indemnitee shall, as a condition precedent
to his or her right to be indemnified under this Agreement, give the Company
notice in writing as soon as practicable of any claim made against Indemnitee
for which indemnification will or could be sought under this Agreement. Notice
to the Company shall be directed to the Chief Executive Officer of the Company
at the address shown on the signature page of this Agreement (or such other
address as the Company shall designate in writing to Indemnitee). In addition,
Indemnitee shall give the Company such information and cooperation as it may
reasonably require and as shall be within Indemnitee’s power.

 

(c) Procedure. Any indemnification and advances determined proper in accordance
with Subsection (d) of Section 1 shall be made no later than forty-five (45)
days after such determination. If a claim under this Agreement, under any
statute, or under any provision of the Company’s Certificate of Incorporation or
Bylaws providing for indemnification, is not paid in full by the Company within
forty-five (45) days after such determination, Indemnitee may, but need not, at
any time thereafter bring an action against the Company to recover the unpaid
amount of the claim and, subject to Section 13 of this Agreement, Indemnitee
shall also be entitled to be paid for the expenses (including attorneys’ fees)
of bringing such action. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in connection with any
action, suit or proceeding in advance of its final disposition) that Indemnitee
has not met the standards of conduct which make it permissible under applicable
law for the Company to indemnify Indemnitee for the amount claimed.

 

(d) Notice to Insurers. If, at the time of the receipt of a notice of a claim
pursuant to Section 2(b) hereof, the Company has director and officer liability
insurance in effect, the Company shall give prompt notice of the commencement of
such proceeding to the insurers in accordance with the procedures set forth in
the respective policies. The Company shall thereafter take all reasonable action
to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable
as a result of such proceeding in accordance with the terms of such policies.

 

(e) Selection of Counsel. If the Company shall be obligated under Section 2(a)
hereof to pay the expenses of any proceeding against Indemnitee, the Company, if
appropriate, shall be entitled to assume the defense of such proceeding, with
counsel approved by Indemnitee, upon the delivery to Indemnitee of written
notice of its election so to do. After delivery of such notice, approval of such
counsel by Indemnitee and the retention of such counsel by the Company, the
Company will not be liable to Indemnitee under this Agreement for any fees of
counsel subsequently incurred by Indemnitee with respect to the same proceeding,
provided that (i) Indemnitee shall have the right to employ his or her counsel
in any such proceeding at Indemnitee’s expense and (ii) if (A) the employment of
counsel by Indemnitee has been previously authorized in writing by the Company,
(B) Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and Indemnitee in the conduct of any such defense
or (C) the Company shall not, in fact, have employed counsel to assume the
defense of such proceeding, then the fees and expenses of Indemnitee’s counsel
shall be at the expense of the Company.

 

3. Additional Indemnification Rights; Nonexclusivity.

 

(a) Scope. Notwithstanding any other provision of this Agreement, the Company
hereby agrees to indemnify the Indemnitee to the fullest extent permitted by
law, notwithstanding that such indemnification is not specifically authorized by
the other provisions of this Agreement, the Company’s Certificate of
Incorporation, the Company’s Bylaws or by statute. If any change in any
applicable law, statute or rule occurs which narrows the right of a Delaware
corporation to indemnify a member of its board of directors or an officer, such
changes, to the extent not otherwise required by such law, statute or rule to be
applied to this Agreement shall have no effect on this Agreement or the parties’
rights and obligations hereunder.

 

(b) Nonexclusivity. The indemnification provided by this Agreement shall not be
deemed exclusive of any rights to which Indemnitee may be entitled under the
Company’s Certificate of Incorporation, its Bylaws, any agreement, any vote of
shareholders or disinterested directors, the Delaware

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General Corporation Law, or otherwise, both as to action in Indemnitee’s
official capacity and as to action in another capacity while holding such
office. The indemnification provided under this Agreement shall continue as to
Indemnitee for any action taken or not taken while serving in an indemnified
capacity even though he or she may have ceased to serve in such capacity at the
time of any action, suit or other covered proceeding.

 

4. Partial Indemnification. If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of the
expenses, judgments, fines or penalties actually or reasonably incurred by him
or her in the investigation, defense, appeal or settlement of any civil or
criminal action, suit or proceeding, but not, however, for the total amount
thereof, the Company shall nevertheless indemnify Indemnitee for the portion of
such expenses, judgments, fines or penalties to which Indemnitee is entitled.

 

5. Mutual Acknowledgment. Both the Company and Indemnitee acknowledge that in
certain instances, Federal law or applicable public policy may prohibit the
Company from indemnifying its directors and officers under this Agreement or
otherwise. Indemnitee understands and acknowledges that the Company has
undertaken or may be required in the future to undertake with the Securities and
Exchange Commission to submit the question of indemnification to a court in
certain circumstances for a determination of the Company’s right under public
policy to indemnify Indemnitee.

 

6. Officer and Director Liability Insurance. The Company may, from time to time,
make the good faith determination whether or not it is practicable for the
Company to obtain and maintain a policy or policies of insurance with reputable
insurance companies providing the officers and directors of the Company with
coverage for losses from wrongful acts, or to ensure the Company’s performance
of its indemnification obligations under this Agreement. Among other
considerations, the Company will weigh the costs of obtaining such insurance
coverage against the protection afforded by such coverage. In all policies of
director and officer liability insurance, Indemnitee shall be named as an
insured in such a manner as to provide Indemnitee the same rights and benefits
as are accorded to the most favorably insured of the Company’s directors, if
Indemnitee is a director; or of the Company’s officers, if Indemnitee is not a
director of the Company, but is an officer; or of the Company’s key employees,
if Indemnitee is not an officer or director, but is a key employee.
Notwithstanding the foregoing, the Company shall have no obligation to obtain or
maintain such insurance if the Company determines in good faith that such
insurance is not reasonably available, if the premium costs for such insurance
are disproportionate to the amount of coverage provided, if the coverage
provided by such insurance is limited by exclusions so as to provide an
insufficient benefit, or if Indemnitee is covered by similar insurance
maintained by a subsidiary or parent of the Company. However, the Company’s
decision whether or not to adopt and maintain such insurance shall not affect in
any way its obligations to indemnify Indemnitee under this Agreement or
otherwise.

 

7. Severability. Nothing in this Agreement is intended to require or shall be
construed as requiring the Company to do or fail to do any act in violation of
applicable law. The Company’s inability, pursuant to court order, to perform its
obligations under this Agreement shall not constitute a breach of this
Agreement. The provisions of this Agreement shall be severable as provided in
this Section 7. If this Agreement or any portion hereof shall be invalidated on
any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee to the full extent permitted by any applicable
portion of this Agreement that shall not have been invalidated, and the balance
of this Agreement not so invalidated shall be enforceable in accordance with its
terms.

 

8. Exceptions. Any other provision herein to the contrary notwithstanding, the
Company shall not be obligated pursuant to the terms of this Agreement:

 

(a) Claims Initiated by Indemnitee. To indemnify or advance expenses to
Indemnitee with respect to proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense, except with respect to
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or law, but such indemnification or
advancement of expenses may be provided by the Company in specific cases if the
Board of Directors has approved the initiation or bringing of such suit.

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(b) Lack of Good Faith. To indemnify Indemnitee for any expenses incurred by the
Indemnitee with respect to any proceeding instituted by Indemnitee to enforce or
interpret this Agreement, if a court of competent jurisdiction determines that
each of the material assertions made by the Indemnitee in such proceeding was
not made in good faith or was frivolous.

 

(c) Insured Claims. To indemnify Indemnitee for expenses or liabilities of any
type whatsoever (including, but not limited to, judgments, fines, ERISA excise
taxes or penalties, and amounts paid in settlement) which have been paid
directly to Indemnitee by an insurance carrier under a policy of officers’ and
directors’ liability insurance maintained by the Company.

 

(d) Claims Under Section 16(b). To indemnify Indemnitee for expenses and the
payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or any similar successor statute.

 

9. Construction of Certain Phrases. For purposes of this Agreement, references
to the “Company” shall include any constituent corporation (including any
constituent of a constituent) that acquires all or substantially all of the
assets of the Company or that is absorbed in a consolidation or merger which, if
its separate existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agents, so that if
Indemnitee is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, Indemnitee shall stand in the same
position under the provisions of this Agreement with respect to the resulting or
surviving corporation as Indemnitee would have with respect to such constituent
corporation if its separate existence had continued.

 

10. Effectiveness. This Agreement shall be deemed to be effective as of the
commencement date of Indemnitee’s employment as an Officer or Director of the
Company.

 

11. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall constitute an original.

 

12. Successors and Assigns. This Agreement shall be binding upon the Company and
its successors and assigns, and shall inure to the benefit of Indemnitee and
Indemnitee’s estate, heirs, legal representatives and assigns.

 

13. Attorneys Fees. If any action is instituted by Indemnitee under this
Agreement to enforce or interpret any of the terms hereof, Indemnitee shall be
entitled to be paid all court costs and expenses, including reasonable
attorneys, fees, incurred by Indemnitee with respect to such action, unless as a
part of such action, the court of competent jurisdiction determines that each of
the material assertions made by Indemnitee as a basis for such action were not
made in good faith or were frivolous. If an action is instituted by or in the
name of the Company under this Agreement or to enforce or interpret any of the
terms of this Agreement, Indemnitee shall be entitled to be paid all court costs
and expenses, including attorneys’ fees, incurred by Indemnitee in defense of
such action (including with respect to Indemnitee’s counterclaims and
cross-claims made in such action), unless as a part of such action the court
determines that each of Indemnitee’s material defenses to such action were made
in bad faith or were frivolous.

 

14. Notice. All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed duly given (i) if delivered by
hand and receipted for by the party addressee, on the date of such receipt, or
(ii) if mailed by domestic certified or registered mail with postage prepaid, on
the third business day after the date postmarked. Addresses for notice to either
party are as shown on the signature page of this Agreement, or as subsequently
modified by written notice.

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15. Consent to Jurisdiction. The Company and Indemnitee each hereby irrevocably
consent to the jurisdiction of the courts of the State of California for all
purposes in connection with any action or proceeding which arises out of or
relates to this Agreement and agree that any action instituted under this
Agreement shall be brought only in the state courts of the State of California.

 

16. Choice of Law. This Agreement shall be governed by and its provisions
construed in accordance with the laws of the State of Delaware.

 

17. Modification. This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof. All prior
negotiations, agreements and understandings between the parties with respect
thereto are superseded hereby. This Agreement may not be modified or amended
except by an instrument in writing signed by or on behalf of the parties hereto.

 

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

SHARPER IMAGE CORPORATION

By:

 

 

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Title:

 

 

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AGREED TO AND ACCEPTED:

 

INDEMNITEE

 

 

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Name

 

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Address