**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 costof 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 availabilityand 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 thisAgreement 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 anddirectors 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 insettlement (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 Indemniteereasonably 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, suitor 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 reasonablybelieved 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. TheCompany 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 ajudgment 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 orother 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 defenseor 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 shallbe 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 

such action or suit was brought shall determine upon application that, despite the adjudication ofliability 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 provisionof 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. Tothe 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 beindemnified 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) shallbe 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 theforegoing, 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 thedetermination 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 beselected 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 theissue 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 indefending 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 ofsuch 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 bythe 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 andpromptly 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 convincinglythat 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 paidby 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 adjudicatedby court order or judgment from which no further right of appeal exists. 

(b) Notice/Cooperation by Indemnitee. Indemnitee shall, as a condition precedentto 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 Companyshall 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 theCompany 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 nolater 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 bythe 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 connectionwith 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 thereceipt 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 theprocedures 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 ofsuch policies. 

 

(e) Selection ofCounsel. 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 byIndemnitee, 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 toIndemnitee 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 atIndemnitee’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 Companyand 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 ofthis 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 itsboard 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 indemnificationprovided 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, theDelaware 

General Corporation Law, or otherwise, both as to action in Indemnitee’s official capacity and as toaction 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 ceasedto 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 orpenalties 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 indemnifyIndemnitee 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 publicpolicy 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 Securitiesand 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. TheCompany 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 ofthe 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 insurancecoverage 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 tothe 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 isnot 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, ifthe 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 similarinsurance 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 orotherwise. 

 

7. Severability. Nothing inthis 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 Agreementshall 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 inaccordance 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 initiatedor 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 advancementof expenses may be provided by the Company in specific cases if the Board of Directors has approved the initiation or bringing of such suit. 

(b) Lack of Good Faith. To indemnify Indemnitee for any expenses incurred by theIndemnitee 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 ingood faith or was frivolous. 

 

(c) InsuredClaims. 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 byan 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 saleby 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 anyconstituent 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 hadpower 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 constituentcorporation 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 orsurviving 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 anOfficer 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 thebenefit 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 costsand 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 abasis 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 bepaid 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 thecourt 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 deemedduly 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. 

15. Consent to Jurisdiction. The Company and Indemnitee each hereby irrevocablyconsent 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 bebrought 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 withrespect 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 oron behalf of the parties hereto. 

 

[SIGNATURE PAGE FOLLOWS]

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

 

**SHARPER IMAGE CORPORATION**

By:
 
 

Title:
 
 

 

AGREED TO ANDACCEPTED: 

 

**INDEMNITEE**

 

 

Name

 

 

 

Address