EXHIBIT 10.4
 
COST PLUS, INC.
 
AMENDED AND RESTATED
 
INDEMNIFICATION AGREEMENT
 
This Indemnification Agreement (“Agreement”) is made as of              by and
between Cost Plus, Inc., a California corporation (the “Company”), and
             (“Indemnitee”).
 
WHEREAS, the Company and Indemnitee recognize the increasing difficulty in
obtaining directors’ and officers’ liability insurance, the significant
increases in the cost of such insurance and the general reductions in the
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 may not be willing to continue to serve as officers and directors
without additional protection; and
 
WHEREAS, the Company desires 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 Proceedings.    The Company shall indemnify Indemnitee if
Indemnitee is or was a party to or witness or other participant in or is
threatened to be made a party to or witness or other participant in any
threatened, pending or completed action 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, officer,
employee or agent of the Company, or any subsidiary of the Company, by reason of
any action or inaction on the part of Indemnitee while an officer or director or
by reason of the fact that Indemnitee is or was serving at the request of the
Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys’ fees, expert fees, other professional fees and court
costs), judgments (including punitive and exemplary damages), penalties, fines
and amounts paid in settlement (if such settlement is approved in advance by the
Company, which approval shall not be unreasonably withheld) actually and
reasonably

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incurred by Indemnitee in connection with such action or proceeding if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to
be in 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 or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that (i) Indemnitee did not act in
good faith, (ii) Indemnitee did not act in a manner which Indemnitee reasonably
believed to be in the best interests of the Company, or (iii) with respect to
any criminal action or proceeding, Indemnitee had reasonable cause to believe
that Indemnitee’s conduct was unlawful.
 
(b)  Proceedings By or in the Right of the Company.    The Company shall
indemnify Indemnitee if Indemnitee was or is a party to or witness or other
participant in or is threatened to be made a party to or witness or other
participant in any threatened, pending or completed action or proceeding by or
in the right of the Company or any subsidiary of the Company to procure a
judgment in its favor by reason of the fact that Indemnitee is or was a
director, officer, employee or agent of the Company, or any subsidiary of the
Company, by reason of any action or inaction on the part of Indemnitee while an
officer or director or by reason of the fact that Indemnitee is or was serving
at the request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys’ fees) and, to the fullest extent
permitted by law, amounts paid in settlement, in each case to the extent
actually and reasonably incurred by Indemnitee in connection with the defense or
settlement of such action or proceeding if Indemnitee acted in good faith and in
a manner Indemnitee reasonably believed to be in the best interests of the
Company and its shareholders, except that 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 in the performance of Indemnitee’s duty to
the Company and its shareholders unless and only to the extent that the court in
which such action or proceeding is or was pending shall determine upon
application that, in view of all the circumstances of the case, Indemnitee is
fairly and reasonably entitled to indemnity for expenses and then only to the
extent that the court shall determine.
 
2.  Expenses; Indemnification Procedure.
 
(a)  Advancement of Expenses.    The Company shall advance all expenses incurred
by Indemnitee in connection with the investigation, defense, settlement or
appeal of any civil or criminal action or proceeding referenced in Section 1(a)
or (b) hereof (but not amounts actually paid in settlement of any such action or
proceeding). Indemnitee hereby undertakes to repay such amounts advanced only
if, and to the extent that, it shall ultimately be determined by the court (as
to which all rights of appeal therefrom have been exhausted or lapsed) that
Indemnitee is not entitled to be indemnified by the Company as authorized
hereby. The advances to be made hereunder shall be paid by the Company to
Indemnitee within twenty (20) days following delivery of a written request
therefor by Indemnitee to the Company.
 
(b)  Notice/Cooperation by Indemnitee.    Indemnitee shall, as a condition
precedent to his 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

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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). Notice shall be deemed received three business days after the
date postmarked if sent by domestic certified or registered mail, properly
addressed; otherwise notice shall be deemed received when such notice shall
actually be received by the Company. 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 provided for in Section 1 shall be made
no later than twenty (20) days after receipt of the written request of
Indemnitee. If a claim under this Agreement, under any statute, or under any
provision of the Company’s Articles of Incorporation or Bylaws providing for
indemnification, is not paid in full by the Company within twenty (20) days
after a written request for payment thereof has first been received by the
Company, 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 14 of this Agreement, Indemnitee shall also be entitled to be paid for
the expenses (including attorneys’ fees, expert fees, other professional fees
and court costs) of bringing such action irrespective of the ultimate
determination as to Indemnitee’s entitlement to indemnification. 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 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, but the burden of proving such defense shall be on the
Company, and Indemnitee shall be entitled to receive interim payments of
expenses pursuant to Subsection 2(a) unless and until such defense may be
finally adjudicated by court order or judgment from which no further right of
appeal exists. It is the parties’ intention that if the Company contests
Indemnitee’s right to indemnification, the question of Indemnitee’s right to
indemnification shall be for the court to decide, and neither the failure of the
Company (including its Board of Directors, any committee or subgroup of the
Board of Directors, independent legal counsel, or its shareholders) to have made
a determination that indemnification of Indemnitee is proper in the
circumstances because Indemnitee has met the applicable standard of conduct
required by applicable law, nor an actual determination by the Company
(including its Board of Directors, any committee or subgroup of the Board of
Directors, independent legal counsel, or its shareholders) that Indemnitee has
not met such applicable standard of conduct, shall create a presumption that
Indemnitee has or has not met the applicable standard of conduct.
 
(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 necessary or desirable 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.    In the event 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 in writing by Indemnitee, which approval shall
not be unreasonably withheld, upon the delivery to

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Indemnitee of written notice of its election so to do. After delivery of such
notice, written 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 counsel in any such proceeding at Indemnitee’s expense; and
(ii) if (A) the employment of counsel by Indemnitee has been previously
authorized 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. Neither the Company
nor the Indemnitee will settle any matter the subject of this Agreement without
the written consent of the other, which will not be unreasonably withheld.
 
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 Articles of
Incorporation, the Company’s Bylaws or by statute. In the event of any change,
after the date of this Agreement, in any applicable law, statute or rule which
expands the right of a California corporation to indemnify a member of its board
of directors or an officer, such changes shall be, ipso facto, within the
purview of Indemnitee’s rights and Company’s obligations, under this Agreement.
In the event of any change in any applicable law, statute or rule which narrows
the right of a California 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 Articles of Incorporation, its Bylaws, any agreement, any vote of
shareholders or disinterested directors, the General Corporation Law of the
State of California, 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 may have ceased to serve in such capacity at the time of any action 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
in the investigation, defense, appeal or settlement of any civil or criminal
action 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.

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5.  Contribution.    If the indemnification provided for in this Agreement is
unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of
indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee,
whether for judgments, fines, penalties, excise taxes, amounts paid or to be
paid in settlement and/or for expenses, in connection with any claim relating to
an indemnifiable event, in such proportion as is deemed fair and reasonable in
light of all circumstances of such action by the court before which such action
was brought in order to reflect (i) the relative benefits received by the
Company and Indemnitee as a result of the event(s) and/or transaction(s) giving
cause to such action; and/or (ii) the relative fault of the Company (and its
other directors, officers, employees and agents) and Indemnitee in connection
with such event(s) and/or transaction(s). Indemnitee’s right to contribution
under this Section 5 shall be determined in accordance with, pursuant to and in
the same manner as, the provisions in Section 1 hereof relating to Indemnitee’s
right to indemnification under this Agreement.
 
6.  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.
 
7.  Directors’ and Officers’ Liability Insurance.    The Company shall, 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
directors’ and officers’ 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.
 
8.  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 8. 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

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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.
 
9.  Exceptions.    Any other provision herein to the contrary notwithstanding,
the Company shall not be obligated pursuant to the terms of this Agreement:
 
(a)  Excluded Acts.    To indemnify Indemnitee for any acts or omissions or
transactions from which a director may not be relieved of liability under the
California General Corporation Law; or
 
(b)  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 or otherwise as required under
Section 317 of the California General Corporation 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; or
 
(c)  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; or
 
(d)  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 directors’ and
officers’ liability insurance maintained by the Company; or
 
(e)  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.
 
10.  Effectiveness of Agreement.    To the extent that the indemnification
permitted under the terms of certain provisions of this Agreement exceeds the
scope of the indemnification provided for in the California General Corporation
Law, such provisions shall not be effective unless and until the Company’s
Articles of Incorporation authorize such additional rights of indemnification.
In all other respects, the balance of this Agreement shall be effective as of
the date set forth on the first page and may apply to acts or omissions of
Indemnitee which occurred prior to such date if Indemnitee was an officer,
director, employee or other agent of the Company, or was serving at the request
of the Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, at the time such act or
omission occurred. All of the Company’s obligations under this Agreement will
continue as long as Indemnitee is subject to any actual or possible matter which
is the subject of this Agreement, notwithstanding Indemnitee’s termination of
service as an officer or director of the Company.

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11.  Construction of Certain Phrases.
 
(a)  For purposes of this Agreement, references to the “Company” shall include,
in addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger which,
if its separate existence had continued, would have had power and authority to
indemnify its directors, officers, 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.
 
(b)  For purposes of this Agreement, references to “other enterprises” shall
include employee benefit plans; references to “fines” shall include any excise
taxes assessed on Indemnitee with respect to an employee benefit plan; and
references to “serving at the request of the Company” shall include any service
as a director, officer, employee or agent of the Company 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.
 
12.  Counterparts.    This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.
 
13. Successors and Assigns.    This Agreement shall be binding upon the Company
and its successors (whether direct or indirect, by purchase, merger or
otherwise) and assigns, and shall inure to the benefit of Indemnitee and
Indemnitee’s estate, heirs, legal representatives and assigns. Any such
assumption will not release the Company from its obligations under this
Agreement.
 
14.  Attorneys’ Fees.    In the event that 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
(as to which all rights of appeal therefrom have been exhausted or lapsed) that
each of the material assertions made by Indemnitee as a basis for such action
was not made in good faith or was frivolous. In the event of an action
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 (as to which all rights of appeal therefrom have
been exhausted or lapsed) that each of Indemnitee’s material defenses to such
action was made in bad faith or were frivolous.
 
15.  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

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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.
 
16.  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.
 
17.  Amendments.    Neither the Company’s Articles of Incorporation nor its
Bylaws will be changed to increase liability of the Company’s officers or
directors or to limit Indemnitee’s indemnification. Any repeal or modification
of Company’s Articles of Incorporation or Bylaws or any repeal or modification
of the relevant provisions of any applicable law will not in any way diminish
any of Indemnitee’s rights or the Company’s obligations under this Agreement.
This Agreement cannot be amended except with the written consent of the Company
and Indemnitee.
 
18.  Choice of Law.    This Agreement shall be governed by and its provisions
construed in accordance with the laws of the State of California as applied to
contracts between California residents entered into and to be performed entirely
within California.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
 
COST PLUS, INC.
By:
 
 

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Name:
Title:
   
Address:
200 4th Street
Oakland, CA 94607

 
AGREED TO AND ACCEPTED:
 
INDEMNITEE:
 
 

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Name:

 
Address:
 
 

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