Document:

Form of Indemnification Agmt to be Entered into by Anna's Linens, Inc.

 Exhibit 10.01 
  
 INDEMNIFICATION AGREEMENT 
  
 THIS AGREEMENT is entered into, effective as of
                         , 2005 by and between Anna’s Linens, Inc., a Delaware corporation (the
“Company”), and                                 
(“Indemnitee”). 
  
 WHEREAS, it is essential to the
Company to retain and attract as directors and officers the most capable persons available; 
  
 WHEREAS, Indemnitee is a director and/or officer of the Company; 
  
 WHEREAS, both the Company and Indemnitee recognize the increased risk of litigation and other claims currently being asserted against directors and
officers of corporations; 
  
 WHEREAS, the Certificate of
Incorporation and Bylaws of the Company require the Company to indemnify and advance expenses to its directors and officers to the fullest extent permitted under Delaware law, and the Indemnitee has been serving and continues to serve as a director
and/or officer of the Company in part in reliance on the Company’s Certificate of Incorporation and Bylaws; and 
  
 WHEREAS, in recognition of Indemnitee’s need for (i) substantial protection against personal liability based on Indemnitee’s reliance on the
aforesaid Certificate of Incorporation and Bylaws, (ii) specific contractual assurance that the protection promised by the Certificate of Incorporation and Bylaws will be available to Indemnitee (regardless of, among other things, any amendment to
or revocation of the Certificate of Incorporation and Bylaws or any change in the composition of the Company’s Board of Directors or acquisition transaction relating to the Company), and (iii) an inducement to provide effective services to the
Company as a director and/or officer, the Company wishes to provide in this Agreement for the indemnification of and the advancing of expenses to Indemnitee to the fullest extent (whether partial or complete) permitted under Delaware law and as set
forth in this Agreement, and, to the extent insurance is maintained, to provide for the continued coverage of Indemnitee under the Company’s directors’ and officers’ liability insurance policies. 
  
 NOW, THEREFORE, in consideration of the above premises and of Indemnitee
continuing to serve the Company directly or, at its request, with another enterprise, and intending to be legally bound hereby, the parties agree as follows: 
  

1. Certain Definitions: 
  
 (a) Board: the Board of Directors of the Company. 
  
 (b) Affiliate: any corporation or other person or entity that directly, or indirectly through one or more intermediaries, controls or is controlled
by, or is under common control with, the person specified. 
  

 1 

 (c) Change in Control: shall be deemed to have occurred if (i) any “person” (as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation
owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, and other than any person holding shares of the Company on the date that the Company first registers
under the Act or any transferee of such individual if such transferee is a spouse or lineal descendant of the transferee or a trust for the benefit of the individual, his spouse or lineal descendants), is or becomes the “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 30% or more of the total voting power represented by the Company’s then outstanding Voting Securities, or (ii) during any
period of two consecutive years, individuals who at the beginning of such period constitute the Board and any new director whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of the Board, or
(iii) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation, other than a merger or consolidation that would result in the Voting Securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) at least 80% of the total voting power represented by the Voting Securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or (iv) the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company (in one transaction or a series of
transactions) of all or substantially all of the Company’s assets. 
  
 (d) Expenses: any expense, liability, or loss, including attorneys’ fees, judgments, fines, ERISA excise taxes and penalties, amounts paid or to be paid in settlement, any interest, assessments, or other charges imposed thereon,
any federal, state, local, or foreign taxes imposed as a result of the actual or deemed receipt of any payments under this Agreement, and all other costs and obligations, paid or incurred in connection with investigating, defending, being a witness
in, participating in (including on appeal), or preparing for any of the foregoing in, any Proceeding relating to any Indemnifiable Event. 
  
 (e) Indemnifiable Event: any event or occurrence that takes place either prior to or after the execution of this Agreement, related to the fact
that Indemnitee is or was a director or officer of the Company, or while a director or officer is or was serving at the request of the Company as a director, officer, employee, trustee, agent, or fiduciary of another foreign or domestic corporation,
partnership, joint venture, employee benefit plan, trust, or other enterprise, or was a director, officer, employee, or agent of a foreign or domestic corporation that was a predecessor corporation of the Company or of another enterprise at the
request of such predecessor corporation, or related to anything done or 
  

 2 

 not done by Indemnitee in any such capacity or in any other capacity pursuant to which Indemnitee is providing or has
provided services to the Company, whether or not the basis of the Proceeding is alleged action in an official capacity as a director, officer, employee, or agent or in any other capacity while serving as a director, officer, employee, or agent of
the Company, as described above. 
  
 (f) Independent
Counsel: the person or body appointed in connection with Section 3. 
  
 (g) Proceeding: any threatened, pending, or completed action, suit, or proceeding or any alternative dispute resolution mechanism (including an action by or in the right of the Company), or any inquiry, hearing, or investigation,
whether conducted by the Company or any other party, that Indemnitee in good faith believes might lead to the institution of any such action, suit, or proceeding, whether civil, criminal, administrative, investigative, or other. 
  
 (h) Reviewing Party: the person or body appointed in accordance with
Section 3. 
  
 (i) Voting Securities: any securities of the
Company that vote generally in the election of directors. 
  
 2. Agreement to Indemnify. 
  
 (a) General
Agreement. In the event Indemnitee was, is, or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, a Proceeding by reason of (or arising in part out of) an
Indemnifiable Event, the Company shall indemnify Indemnitee from and against any and all Expenses to the fullest extent permitted by law, as the same exists or may hereafter be amended or interpreted (but in the case of any such amendment or
interpretation, only to the extent that such amendment or interpretation permits the Company to provide broader indemnification rights than were permitted prior thereto). The parties hereto intend that this Agreement shall provide for
indemnification in excess of that expressly permitted by statute, including, without limitation, any indemnification provided by the Company’s Certificate of Incorporation, its Bylaws, vote of its shareholders or disinterested directors, or
applicable law. 
  
 (b) Initiation of Proceeding.
Notwithstanding anything in this Agreement to the contrary, Indemnitee shall not be entitled to indemnification pursuant to this Agreement in connection with any Proceeding initiated by Indemnitee against the Company or any director or officer of
the Company unless (i) the Company has joined in or the Board has consented to the initiation of such Proceeding; (ii) the Proceeding is one to enforce indemnification rights under Section 5; or (iii) the Proceeding is instituted after a Change in
Control (other than a Change in Control approved by a majority of the directors on the Board who were directors immediately prior to such Change in Control) and Independent Counsel has approved its initiation. 
  

 3 

 (c) Expense Advances. If so requested by Indemnitee, the Company shall advance (within ten
business days of such request) any and all Expenses to Indemnitee (an “Expense Advance”); provided that, (i) such an Expense Advance shall be made only upon delivery to the Company of an undertaking by or on behalf of the Indemnitee to
repay the amount thereof if it is ultimately determined that Indemnitee is not entitled to be indemnified by the Company, and (ii) if and to the extent that the Reviewing Party determines that Indemnitee would not be permitted to be so indemnified
under applicable law, the Company shall be entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for all such amounts theretofore paid. If Indemnitee has commenced or commences legal proceedings in a court of competent
jurisdiction to secure a determination that Indemnitee should be indemnified under applicable law, as provided in Section 4, any determination made by the Reviewing Party that Indemnitee would not be permitted to be indemnified under applicable law
shall not be binding, and Indemnitee shall not be required to reimburse the Company for any Expense Advance until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or have
lapsed). Indemnitee’s obligation to reimburse the Company for Expense Advances shall be unsecured and no interest shall be charged thereon. 
  
 (d) Mandatory Indemnification. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the
merits or otherwise in defense of any Proceeding relating in whole or in part to an Indemnifiable Event or in defense of any issue or matter therein, Indemnitee shall be indemnified against all Expenses incurred in connection therewith. 

 
 (e) Partial Indemnification. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is
entitled. 
  
 (f) Prohibited Indemnification. No
indemnification pursuant to this Agreement shall be paid by the Company on account of any Proceeding in which judgment is rendered against Indemnitee for an accounting of profits made from the purchase or sale by Indemnitee of securities of the
Company pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of any federal, state, or local laws. 
  
 3. Reviewing Party. Prior to any Change in Control, the Reviewing Party shall be any appropriate person or body
consisting of a member or members of the Board or any other person or body appointed by the Board who is not a party to the particular Proceeding with respect to which Indemnitee is seeking indemnification; after a Change in Control, the Independent
Counsel referred to below shall become the Reviewing Party. With respect to all matters arising after a Change in Control (other than a Change in Control approved by a majority of the directors on the Board who were directors immediately prior to
such Change in Control) concerning the rights of Indemnitee to indemnity payments and Expense Advances under this Agreement or any other 
  

 4 

 agreement or under applicable law or the Company’s Certificate of Incorporation or Bylaws now or hereafter in effect
relating to indemnification for Indemnifiable Events, the Company shall seek legal advice only from Independent Counsel selected by Indemnitee and approved by the Company (which approval shall not be unreasonably withheld), and who has not otherwise
performed services for the Company or the Indemnitee (other than in connection with indemnification matters) within the last five years. The Independent Counsel shall not include any person who, under the applicable standards of professional conduct
then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. Such counsel, among other things, shall render its written opinion to the
Company and Indemnitee as to whether and to what extent the Indemnitee should be permitted to be indemnified under applicable law. The Company agrees to pay the reasonable fees of the Independent Counsel and to indemnify fully such counsel against
any and all expenses (including attorneys’ fees), claims, liabilities, loss, and damages arising out of or relating to this Agreement or the engagement of Independent Counsel pursuant hereto. 
  
 4. Indemnification Process and Appeal. 
  
 (a) Indemnification Payment. Indemnitee shall be entitled to
indemnification of Expenses, and shall receive payment thereof, from the Company in accordance with this Agreement as soon as practicable after Indemnitee has made written demand on the Company for indemnification, unless the Reviewing Party has
given a written opinion to the Company that Indemnitee is not entitled to indemnification under applicable law. 
  
 (b) Suit to Enforce Rights. Regardless of any action by the Reviewing Party, if Indemnitee has not received full indemnification within twenty days
after making a demand in accordance with Section 4(a), Indemnitee shall have the right to enforce its indemnification rights under this Agreement by commencing litigation in any court in the State of California or the State of Delaware having
subject matter jurisdiction thereof seeking an initial determination by the court or challenging any determination by the Reviewing Party or any aspect thereof. The Company hereby consents to service of process and to appear in any such proceeding.
Any determination by the Reviewing Party not challenged by the Indemnitee shall be binding on the Company and Indemnitee. The remedy provided for in this Section 4 shall be in addition to any other remedies available to Indemnitee at law or in
equity. 
  
 (c) Defense to Indemnification, Burden of Proof,
and Presumptions. It shall be a defense to any action brought by Indemnitee against the Company to enforce this Agreement (other than an action brought to enforce a claim for Expenses incurred in defending a Proceeding in advance of its final
disposition where the required undertaking has been tendered to the Company) that it is not permissible under applicable law for the Company to indemnify Indemnitee for the amount claimed. In connection with any such action or any determination by
the Reviewing Party or otherwise as to whether Indemnitee is entitled to be indemnified hereunder, the burden of proving such a defense or determination shall be on the Company. Neither the failure of the Reviewing Party or 
  

 5 

 the Company (including its Board, independent legal counsel, or its stockholders) to have made a determination prior to
the commencement of such action by Indemnitee that indemnification of the claimant is proper under the circumstances because Indemnitee has met the standard of conduct set forth in applicable law, nor an actual determination by the Reviewing Party
or Company (including its Board, independent legal counsel, or its stockholders) that the Indemnitee had not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the Indemnitee has not met the
applicable standard of conduct. For purposes of this Agreement, the termination of any claim, action, suit, or proceeding, by judgment, order, settlement (whether with or without court approval), conviction, or upon a plea of nolo contendere, or its
equivalent, shall not create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law. 
  
 5. Indemnification for Expenses Incurred in Enforcing Rights. The
Company shall indemnify Indemnitee against any and all Expenses that are incurred by Indemnitee in connection with any action brought by Indemnitee for 
  
 (i) indemnification or advance payment of Expenses by the Company under this Agreement or any other agreement or under applicable law or the
Company’s Certificate of Incorporation or Bylaws now or hereafter in effect relating to indemnification for Indemnifiable Events, and/or 
  
 (ii) recovery under directors’ and officers’ liability insurance policies maintained by the Company, but only in the event that Indemnitee
ultimately is determined to be entitled to such indemnification or insurance recovery, as the case may be. In addition, the Company shall, if so requested by Indemnitee, advance the foregoing Expenses to Indemnitee, subject to and in accordance with
Section 2(c). 
  
 6. Notification and Defense of
Proceeding. 
  
 (a) Notice. Promptly after receipt by
Indemnitee of notice of the commencement of any Proceeding, Indemnitee shall, if a claim in respect thereof is to be made against the Company under this Agreement, notify the Company of the commencement thereof; but the omission so to notify the
Company will not relieve the Company from any liability that it may have to Indemnitee, except as provided in Section 6(c). 
  
 (b) Defense. With respect to any Proceeding as to which Indemnitee notifies the Company of the commencement thereof, the Company will be entitled
to participate in the Proceeding at its own expense and except as otherwise provided below, to the extent the Company so wishes, it may assume the defense thereof with counsel reasonably satisfactory to Indemnitee. After notice from the Company to
Indemnitee of its election to assume the defense of any Proceeding, the Company shall not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently incurred by Indemnitee in connection with the defense of such
Proceeding other than reasonable 
  

 6 

 costs of investigation or as otherwise provided below. Indemnitee shall have the right to employ legal counsel in such
Proceeding, but all Expenses related thereto incurred after notice from the Company of its assumption of the defense shall be at Indemnitee’s expense unless: (i) the employment of legal counsel by Indemnitee has been authorized by the Company,
(ii) Indemnitee has reasonably determined that there may be a conflict of interest between Indemnitee and the Company in the defense of the Proceeding, (iii) after a Change in Control (other than a Change in Control approved by a majority of the
directors on the Board who were directors immediately prior to such Change in Control), the employment of counsel by Indemnitee has been approved by the Independent Counsel, or (iv) the Company shall not in fact have employed counsel to assume the
defense of such Proceeding, in each of which cases all Expenses of the Proceeding shall be borne by the Company. The Company shall not be entitled to assume the defense of any Proceeding brought by or on behalf of the Company or as to which
Indemnitee shall have made the determination provided for in (ii), (iii) and (iv) above. 
  
 (c) Settlement of Claims. The Company shall not be liable to indemnify Indemnitee under this Agreement or otherwise for any amounts paid in settlement of any Proceeding effected without the Company’s
written consent, such consent not to be unreasonably withheld; provided, however, that if a Change in Control has occurred (other than a Change in Control approved by a majority of the directors on the Board who were directors immediately prior to
such Change in Control), the Company shall be liable for indemnification of Indemnitee for amounts paid in settlement if the Independent Counsel has approved the settlement. The Company shall not settle any Proceeding in any manner that would impose
any penalty or limitation on Indemnitee without Indemnitee’s written consent. The Company shall not be liable to indemnify the Indemnitee under this Agreement with regard to any judicial award if the Company was not given a reasonable and
timely opportunity, at its expense, to participate in the defense of such action; the Company’s liability hereunder shall not be excused if participation in the Proceeding by the Company was barred by this Agreement. 
  
 7. Establishment of Trust. In the event of a Change in Control (other
than a Change in Control approved by a majority of the directors on the Board who were directors immediately prior to such Change in Control) the Company shall, upon written request by Indemnitee, create a Trust for the benefit of the Indemnitee and
from time to time upon written request of Indemnitee shall fund the Trust in an amount sufficient to satisfy any and all Expenses reasonably anticipated at the time of each such request to be incurred in connection with investigating, preparing for,
participating in, and/or defending any Proceeding relating to an Indemnifiable Event. The amount or amounts to be deposited in the Trust pursuant to the foregoing funding obligation shall be determined by the Independent Counsel. The terms of the
Trust shall provide that (i) the Trust shall not be revoked or the principal thereof invaded without the written consent of the Indemnitee, (ii) the Trustee shall advance, within ten business days of a request by the Indemnitee, any and all Expenses
to the Indemnitee (and the Indemnitee hereby agrees to reimburse the Trust under the same circumstances for which the Indemnitee would be required to reimburse the Company under Section 2(c) of this Agreement), (iii) the Trust shall continue to be
funded by the Company in accordance with the funding obligation set 
  

 7 

 forth above, (iv) the Trustee shall promptly pay to the Indemnitee all amounts for which the Indemnitee shall be entitled
to indemnification pursuant to this Agreement or otherwise, and (v) all unexpended funds in the Trust shall revert to the Company upon a final determination by the Independent Counsel or a court of competent jurisdiction, as the case may be, that
the Indemnitee has been fully indemnified under the terms of this Agreement. The Trustee shall be chosen by the Indemnitee. Nothing in this Section 7 shall relieve the Company of any of its obligations under this Agreement. All income earned on the
assets held in the Trust shall be reported as income by the Company for federal, state, local, and foreign tax purposes. The Company shall pay all costs of establishing and maintaining the Trust and shall indemnify the Trustee against any and all
expenses (including attorneys’ fees), claims, liabilities, loss, and damages arising out of or relating to this Agreement or the establishment and maintenance of the Trust. 
  
 8. Non-Exclusivity. The rights of Indemnitee hereunder shall be in addition to any other rights Indemnitee may have
under the Company’s Certificate of Incorporation, Bylaws, applicable law, or otherwise; provided, however, that this Agreement shall supersede any prior indemnification agreement between the Company and the Indemnitee. To the extent that a
change in applicable law (whether by statute or judicial decision) permits greater indemnification than would be afforded currently under the Company’s Certificate of Incorporation, Bylaws, applicable law, or this Agreement, it is the intent of
the parties that Indemnitee enjoy by this Agreement the greater benefits so afforded by such change. 
  
 9. Liability Insurance. To the extent the Company maintains an insurance policy or policies providing general and/or directors’ and
officers’ liability insurance, Indemnitee shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any Company director or officer. 
  
 10. Period of Limitations. No legal action shall be brought and no
cause of action shall be asserted by or on behalf of the Company or any Affiliate of the Company against Indemnitee, Indemnitee’s spouse, heirs, executors, or personal or legal representatives after the expiration of two years from the date of
accrual of such cause of action, or such longer period as may be required by state law under the circumstances. Any claim or cause of action of the Company or its Affiliate shall be extinguished and deemed released unless asserted by the timely
filing and notice of a legal action within such period; provided, however, that if any shorter period of limitations is otherwise applicable to any such cause of action, the shorter period shall govern. 
  
 11. Amendment of this Agreement. 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 binding unless in the form of a writing signed by the party against whom enforcement
of the waiver is sought, and no such waiver shall operate as a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. Except as specifically provided herein, no failure to exercise or
any delay in exercising any right or remedy hereunder shall constitute a waiver thereof. 
  

 8 

 12. Subrogation. In the event of payment under this Agreement, the Company 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 shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the
Company effectively to bring suit to enforce such rights. 
  
 13.
No Duplication of Payments. The Company shall not be liable under this Agreement to make any payment in connection with any claim made against Indemnitee to the extent Indemnitee has otherwise received payment (under any insurance policy,
Bylaw, or otherwise) of the amounts otherwise indemnifiable hereunder. 
  
 14. Binding Effect. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger,
consolidation, or otherwise to all or substantially all of the business and/or assets of the Company), assigns, spouses, heirs, and personal and legal representatives. The Company shall require and cause any successor (whether direct or indirect by
purchase, merger, consolidation, or otherwise) to all, substantially all, or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. The indemnification provided under this Agreement shall continue as to Indemnitee for any action
taken or not taken while serving in an indemnified capacity pertaining to an Indemnifiable Event even though he may have ceased to serve in such capacity at the time of any Proceeding. 
  
 15. Severability. If any provision (or portion thereof) of this Agreement shall be held by a court of competent
jurisdiction to be invalid, void, or otherwise unenforceable, the remaining provisions shall remain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent possible, the provisions of this Agreement (including, without
limitation, each portion of this Agreement containing any provision held to be invalid, void, or otherwise unenforceable, that is not itself invalid, void, or unenforceable) shall be construed so as to give effect to the intent manifested by the
provision held invalid, void, or unenforceable. 
  
 16.
Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware applicable to contracts made and to be performed in such State without giving effect to its principles of
conflicts of laws. 
  

 9 

 17. Notices. All notices, demands, and other communications required or permitted hereunder shall
be made in writing and shall be deemed to have been duly given if delivered by hand, against receipt, or mailed, postage prepaid, certified or registered mail, return receipt requested, and addressed to the Company at: 
  
 Anna’s Linens, Inc. 
  

			
		
	 	 	

		
	 	 	

  
 Attention: Chief
Executive Officer 
  
 and to Indemnitee at: 
  
 INDEMNITEE NAME 
  
 ADDRESS 1 
  
 ADDRESS 2 
  
 Notice of change of address shall be effective only when given in accordance with this Section. All notices complying with this Section shall be deemed to have been
received on the date of hand delivery or on the third business day after mailing. 
  
 18. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 
  
 [Signature Page Follows] 
  

 10 

 IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the day
specified above. 
  

			
	 ANNA’S LINENS, INC.

	
	 a Delaware corporation

		
	 By:
	 	  

	 	 	 Alan Gladstone, Chief Executive Officer

		
	 	 	 
	
	 INDEMNITEE
  

	
	  

  

 11Anna's Linen Company 1999 Stock Option Plan

 Exhibit 10.02 
  
 ANNA’S LINEN COMPANY 
  
 1999 STOCK OPTION PLAN 

 ANNA’S LINEN COMPANY 
 1999 STOCK OPTION PLAN 
  
 1. PURPOSE 
  
 The purpose
of the Plan is to provide incentives to attract, retain and motivate eligible persons whose present and potential contributions are important to the success of the Company and its Subsidiaries and Affiliates, by offering them an opportunity to
participate in the Company’s future performance through awards of Options. 
  
 Capitalized terms not defined in the text are defined in Section 20. 
  
 2. SHARES SUBJECT TO THE PLAN 
  
 2.1 Number of Shares Available. Subject to Sections 2.2 and 14, the total number of Shares reserved and available for grant and issuance pursuant
to the Plan shall be Fifty Thousand (50,000) Shares, provided however, that the maximum number of Shares that may be issued under the Plan to any Participant during the term of the Plan shall be limited to Twenty Five Thousand (25,000) Shares.
Subject to Sections 2.2 and 14, Shares reserved for issuance pursuant to Options granted under this Plan shall again be available for grant and issuance, in connection with future Options under the Plan, that: (a) are subject to issuance upon
exercise of an Option, but cease to be subject to such Option for any reason other than exercise of such Option, or (b) are subject to an Option that otherwise terminates without such Shares being issued and for which the participant did not receive
any benefits of ownership. 
  
 2.2 Adjustment of Shares. In
the event that the number of outstanding shares of the Company’s Common Stock is changed by a stock dividend, recapitalization, stock split, reverse stock split, subdivision, combination, reclassification or similar change in the capital
structure of the Company without consideration, then: (a) the number of Shares reserved for issuance under the Plan, and (b) the Exercise Prices of and number of Shares subject to outstanding Options, shall be proportionately adjusted, subject to
any required action by the Board or the stockholders of the Company and compliance with applicable securities laws; provided, however, that fractions of a Share shall not be issued, but shall either be paid in cash at Fair Market Value or shall be
rounded up to the nearest Share, as determined by the Committee; and provided, further, that the Exercise Price of any Option may not be decreased to below the par value of the Shares. 
  

 1 

 3. ELIGIBILITY 
  
 3.1 Eligibility of Employees, Consultants and Independent Contractors. ISOs (as defined in Section 5 below) may be
granted only to employees (including officers and directors who are also employees) of the Company or of a Subsidiary of the Company. NQSOs may be granted to employees, officers, directors, consultants, independent contractors and advisers of the
Company or any Subsidiary or Affiliate of the Company; provided, however, that such consultants, contractors and advisers render bona fide services not in connection with the offer and sale of securities in a capital-raising transaction. A person
may be granted both ISOs and NQSOs under the Plan. 
  
 4.
ADMINISTRATION 
  
 4.1 Committee Authority. The Plan
shall be administered by the Committee or the Board acting as the Committee. Subject to the purposes, terms and conditions of the Plan, and to the direction of the Board, the Committee shall have full power to implement and carry out the Plan. The
Committee shall have the authority to: 
  
 (a)
construe and interpret the Plan, any Option Agreement and any other agreement or document executed pursuant to the Plan; 
  
 (b) prescribe, amend and rescind rules and regulations relating to the Plan; 
  
 (c) select persons to receive Options; 
  
 (d) determine the form and terms of Options; 
  
 (e) determine the number of Shares or other consideration
subject to Options; 
  
 (f) determine whether
Options will be granted singly, in combination or in tandem with, in replacement of, or as alternatives to, other Options under the Plan or any other incentive or compensation plan of the Company or any Subsidiary or Affiliate of the Company;

  
 (g) grant waivers of Plan or Option
conditions; 
  
 (h) determine the vesting,
exercisability and payment of Options and to accelerate the vesting and/or exercisability of Options, as provided herein; 
  
 (i) correct, any defect, supply any omission, or reconcile any inconsistency in the Plan, any Option or any Option Agreement; 

 
 (j) determine whether an Option has been earned; and

  

 2 

 (k) make all other determinations necessary or advisable for the administration of the
Plan. 
  
 4.2 Committee Discretion. Any determination
permitted to be made by the Committee under the Plan with respect to any Option shall be made in its sole discretion at the time of grant of the Option or, unless in contravention of any express term of the Plan or Option, at any later time, and
such determination shall be final and binding on the Company and all persons having an interest in any Option under the Plan. 
  
 4.3 Composition of Committee. The Committee shall be comprised of either (i) at least two members of the Board, all of whom are both Outside
Directors and Nonemployee Directors; or (ii) the Board acting as the Committee. It is the intent of the Company that the Plan and Options hereunder satisfy and be interpreted in a manner, that, in the case of Participants who are or may be Insiders,
satisfies the applicable requirements of Rule 16b-3 (or its successor) of the Exchange Act. If any provision of the Plan or of any Option would otherwise conflict with the intent expressed in this Section 4.3, that provision, to the extent possible,
shall be interpreted and deemed amended so as to avoid such conflict. 
  
 5. GRANT AND EXERCISE OF OPTIONS 
  
 5.1 Grant
of Options. Except as otherwise limited herein, the Committee may grant Options to eligible persons pursuant to this Section 5.1 and shall determine whether such Options shall be Incentive Stock Options within the meaning of the Code
(“ISOs”) or Nonqualified Stock Options (“NQSOs”), the number of Shares subject to the Option, the Exercise Price of the Option, the period during which the Option may be exercised, and all other terms and conditions of the
Option, subject to the following: 
  
 5.1.1 Form of Option
Grant. Each Option granted shall be evidenced by an Option Agreement, which shall expressly identify the Option as an ISO or NQSO (“Stock Option Agreement”), and be in such form and contain such provisions (which need not be the same
for each Participant receiving an Option) as the Committee shall from time to time approve, and which shall comply with and be subject to the terms and conditions of the Plan. The Committee may in its discretion include in any NQSO granted under the
Plan a condition that the Participant shall agree to remain in the employ of, and to render services to, the Company or any of its Subsidiaries for a period of time (specified in the agreement) following the date the NQSO is granted. 
  
 5.1.2 Date of Grant. The date of grant of an Option shall be the date
on which the Committee makes the determination to grant such Option. The Stock Option Agreement and a copy of the Plan will be delivered to the Participant within a reasonable time after the granting of such Option. 
  

 3 

 5.1.3 Exercise of Period. Options shall be exercisable within the times or upon the events
determined by the Committee as set forth in the Stock Option Agreement; provided, however: 
  
 (a) no Option shall be exercisable after the expiration of ten (10) years from the date the Option is granted; 
  
 (b) no ISO granted to a person who directly or by
attribution owns more than Ten Percent (10%) of the total combined voting power of all classes of stock of the Company or any Subsidiary of the Company (“Ten Percent Stockholder”) shall be exercisable after the expiration of five (5) years
from the date the Option is granted. 
  
 5.1.4 Exercise
Price. The Exercise Price shall be determined by the Committee when an Option is granted and may be not less than (i) 100% of the Fair Market Value of the Shares on the date of grant, or (ii) the par value of the Shares; provided, however, that
the Exercise Price of any ISO granted to a Ten Percent Stockholder shall not be less than 110% of the Fair Market Value of the Shares on the date of grant. Payment for the Shares purchased may be made in accordance with Section 6 of the Plan.

  
 5.1.5 Method of Exercise. Options may be exercised only
by delivery to the Company of a written stock option exercise agreement (the “Exercise Agreement”) in a form approved by the Committee (which need not be the same for each Participant receiving an Option pursuant to the Plan), stating the
number of Shares being purchased, the restrictions imposed on the Shares, if any, and such representations and agreements regarding Participant’s investment intent, access to information and other matters, if any, as may be required or
desirable by the Company to comply with applicable securities laws, together with payment in full of the Exercise Price for the number of Shares being purchased. 
  
 5.1.6 Termination. Notwithstanding the exercise periods set forth in the Stock Option Agreement, exercise of an
Option shall always be subject to the following: 
  
 (a) If the Participant is Terminated for any reason except death or Disability, then the Participant may exercise such Participant’s Options, only to the extent that such Options would have been exercisable upon the Termination Date,
no later than ninty (90) days after the Termination Date, but in any event, no later than the expiration date of the Options. 
  
 (b) If the Participant is terminated because of death or Disability, then the Participant’s Options which are ISO’ s may be
exercised, only to the extent that such Options would have been exercisable by Participant on the Termination Date, and must be exercised by Participant (or Participant’s legal representative or authorized assignee) no later than one hundred
eighty (180) days after the Termination Date, but in any event no later than the expiration date of the Options. 
  
 5.1.7 Limitations on Exercise. The Committee may specify a reasonable minimum number of Shares that may be purchased on any exercise of an Option,
provided that such minimum number will not prevent Participant from exercising the Option for the full number of Shares for which it is then exercisable. 
  

 4 

 5.1.8 Limitations on ISOs. The aggregate Fair Market Value (determined as of the date of grant) of
Shares with respect to which ISOs are exercisable for the first time by a Participant during any calendar year (under the Plan or under any other incentive stock option plan of the Company or any Affiliate or Subsidiary of the Company) shall not
exceed $100,000. If the Fair Market Value of Shares on the date of grant with respect to which ISOs are exercisable for the first time by a Participant during any calendar year exceeds $100,000, the Options for the first $100,000 worth of Shares to
become exercisable in such calendar year shall be ISOs and the Options for the amount in excess of $100,000 that become exercisable in that calendar year shall be NQSOs. In the event that the Code or the regulations promulgated thereunder are
amended after the Effective Date of the Plan to provide for a different limit on the Fair Market Value of Shares permitted to be subject to ISOs, such different limit shall be automatically incorporated herein and shall apply to any Options granted
after the effective date of such amendment. 
  
 5.1.9
Modification, Extension or Renewal. The Committee may modify, extend or renew outstanding Options, provided that any such action may not, without the written consent of a Participant, impair any of such Participant’s rights under any
Option previously granted, and provided further, that the Committee may not reduce the Exercise Price of outstanding Options. Any outstanding ISO that is modified, extended, renewed or otherwise altered shall be treated in accordance with Section
424(h) of the Code. 
  
 5.1.10 No Disqualification.
Notwithstanding any other provision in the Plan, no term of the Plan relating to ISOs shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be exercised, so as to disqualify the Plan under Section 422
of the Code or, without the consent of the Participant affected, to disqualify any ISO under Section 422 of the Code. 
  
 5.2 Accelerated Vesting 
  
 5.2.1 Notwithstanding the exercise periods set forth in the Stock Option Agreement, the Committee shall have the authority to accelerate the
exercisability of Options granted pursuant to the terms of this Plan, provided however, that the acceleration of exercisability shall be conditioned upon inclusion in the Option agreements with Participants of such provisions and restrictions as are
necessary to permit stock issued upon exercise of such Options to continue to qualify for the exception from Section 16(b) of the Securities Act as is provided under Rule 16(b)(3)(a),(b) and (c). 
  
 5.2.2 Notwithstanding anything herein to the contrary, if a Change in Control
of the Company occurs or if the Committee determines in its sole discretion that an Acceleration Event has occurred, then all Options shall become fully exercisable as of the date such Change in Control occurred or the Committee determines that an
Acceleration Event has occurred, provided however, that the acceleration of exercisability shall be subject to the imposition of such restrictions on transferability of shares of Common Stock subject to such Options, as are necessary to permit stock
issued upon exercise of such Options to continue to qualify for the exception from Section 16(b) of the Securities Act as is provided under Rule 16(b)(3)(a),(b) and (c). 
  

 5 

 6. PAYMENT FOR SHARE PURCHASES 
  
 6.1 Payment. Payment for Shares purchased pursuant to the Plan may be made in cash (by check or equivalent) or, where
expressly approved by the Committee and permitted by law by: 
  
 (a) by cancellation of indebtedness of the Company to the Participant; 
  
 (b) by surrender of shares of the Company’s Common Stock that either: (1) have been owned by Participant for more than six (6) months
and have been paid for within the meaning of Rule 144 of the Securities Act; or were obtained by Participant in the public market; and, (2) are clear of all liens, claims, encumbrances or security interests; 
  
 (c) by waiver of compensation due or accrued to Participant
for services rendered; 
  
 (d) provided that a
public market for the Company’s stock exists and subject to the ability of the Participant to sell Shares in compliance with applicable securities laws: 
  

(i) through a “same day sale” commitment from the Participant and a broker-dealer that is a member of the National
Association of Securities Dealers (an “NASD Dealer”) whereby the Participant irrevocably elects to exercise the Option and to sell a portion of the Shares so purchased in order to pay the Exercise Price, and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the Exercise Price directly to the Company; or 
  
 (ii) through a “margin” commitment from the Participant and an NASD Dealer whereby Participant irrevocably elects to exercise
the Option and to pledge the Shares so purchased to the NASD Dealer in a margin account as security for a loan from the NASD Dealer in the amount of the Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the Exercise Price directly to the Company; or 
  
 (e) by any combination of the foregoing. 
  
 Notwithstanding the foregoing, the Exercise Price of an Option held by a director who is not an employee shall be paid either (i) in cash; or (ii) pursuant to subsection (a) of this Section 6.1, or (iii) by any combination of the foregoing
(i) and (ii). 
  
 7. WITHHOLDING TAXES 
  
 7.1 Voting and Dividends. Whenever Shares are to be issued in
satisfaction of Options granted under the Plan, the Company may require the Participant to remit to the Company an amount sufficient to satisfy federal, state and local withholding tax requirements prior to the delivery of any certificate or
certificates for such Shares. 
  

 6 

 8. PRIVILEGES OF STOCK OWNERSHIP 
  
 8.1 Voting and Dividends. No Participant shall have any of the rights of a stockholder with respect to any Shares
until the Shares are issued to the Participant. After Shares are issued to the Participant, the Participant shall be a stockholder and have all the rights of a stockholder with respect to such Shares, including the right to vote and receive all
dividends or other distributions made or paid with respect to such Shares. 
  
 8.2 Financial Statements. The Company shall provide financial statements to each Participant annually during the period such Participant has Options outstanding, provided, however, that the Company shall not be
required to provide such financial statements to Participants whose services in connection with the Company assure them access to equivalent information. 
  
 9. TRANSFERABILITY 
  
 Options granted under the Plan, and any interest therein, shall not be transferable or assignable by Participant, and may not be made subject to
execution, attachment or similar process, otherwise than by will or by the laws of descent and distribution or as consistent with the specific Plan and Option Agreement provisions relating thereto. During the lifetime of the Participant, an Option
shall be exercisable only by the Participant, and any elections with respect to an Option, may be made only by the Participant. 
  
 10. CERTIFICATES 
  
 All certificates for Shares or other securities delivered under the Plan shall be subject to such stock transfer orders, legends and other restrictions as
the Committee may deem necessary or advisable, including restrictions under any applicable federal, state or foreign securities law, or any rules, regulations and other requirements of the SEC or any stock exchange or automated quotation system upon
which the Shares may be listed. 
  
 11. EXCHANGE AND BUYOUT OF
OPTIONS 
  
 The Committee may, at any time or from time to
time, authorize the Company, with the consent of the respective Participants, to issue new Options in exchange for the surrender and cancellation of any or all outstanding Options. The Committee may at any time buy from a Participant an Option
previously granted with payment in cash, Shares or other consideration, based on such terms and conditions as the Committee and the Participant shall agree. 
  
 12. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE 
  
 An Option shall not be effective unless such Option is in compliance with all applicable federal and state securities laws, rules and regulations of any
governmental body, and 
  

 7 

 the requirements of any stock exchange or automated quotation system upon which the Shares may then be listed, as they
are in effect on the date of grant of the Option and also on the date of exercise or other issuance. Notwithstanding any other provision in the Plan, the Company shall have no obligation to issue or deliver certificates for Shares under the Plan
prior to: (a) obtaining any approvals from governmental agencies that the Company determines are necessary or advisable, and/or (b) completion of any registration or other qualification of such Shares under any state or federal law or ruling of any
governmental body that the Company determines to be necessary or advisable. The Company shall be under no obligation to register the Shares with the SEC or to effect compliance with the registration, qualification or listing requirements of any
state securities laws, stock exchange or automated quotation system, and the Company shall have no liability for any inability or failure to do so. 
  
 13. NO OBLIGATION TO EMPLOY 
  
 Nothing in the Plan or any Option granted under the Plan shall confer or be deemed to confer on any Participant any right to continue in the employ of, or
to continue any other relationship with, the Company, or any Subsidiary or Affiliate of the Company or limit in any way the right of the Company or any Subsidiary or Affiliate of the Company to terminate Participant’s employment or other
relationship at any time, with or without cause. 
  
 14.
CHANGES IN THE COMPANY’S CAPITAL STRUCTURE 
  
 The
existence of outstanding Options shall not affect in any way the right or power of the Company or its stockholders to make or authorize all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or
its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the Company, or
any other corporate act or proceeding, whether of a similar character or otherwise. 
  
 If the Company shall effect a subdivision or consolidation of shares or other capital readjustment, the payment of a stock dividend, or other increase or reduction of the number of shares of its Common Stock
outstanding, without receiving compensation therefor in money, services or property, then (i) the number, class, and per share price of Shares subject to outstanding Options hereunder shall be appropriately adjusted in such a manner as to entitle a
Participant to receive upon exercise thereof (and, if relevant, for the same aggregate cash consideration), the same total number and class of shares as such Participant would have received had such Participant exercised such Option in full
immediately prior to such event; and (ii) the number and class of shares with respect to which Options may be granted under the Plan shall be adjusted by substituting for the total number of shares of Common Stock then reserved that number and class
of shares of stock that would have been received by the owner of an equal number of outstanding shares of Common Stock as the result of the event requiring the adjustment. 
  
 After a merger of one or more corporations into the Company, or after a consolidation of the Company and one or more
corporations in which the Company shall be the surviving corporation, each holder of an outstanding Option shall, at no additional cost, be entitled 
  

 8 

 to receive upon exercise of such Option (subject to any required action by stockholders of the Company) in, lieu of the
number of Shares as to which such Option shall then be so exercisable, the number and class of shares of stock or other securities to which such holder would have been entitled pursuant to the terms of the agreement of merger or consolidation if,
immediately prior to such merger or consolidation, such holder had been the holder of record of a number of shares of Common Stock equal to the number of shares as to which such Option shall be so exercised. 
  
 If the Company is merged into or consolidated with another corporation under
circumstances where the Company is not the surviving corporation, or if the Company is liquidated, or sells or otherwise disposes of substantially all its assets to another corporation while unexercised Options remain outstanding under the Plan, (i)
subject to the provisions of clause (ii) below, after the effective date of such merger, consolidation or sale, as the case may be, each holder of an outstanding Option shall be entitled to receive upon exercise of such Option in lieu of shares of
Common Stock, shares of such stock or other securities, cash or property as the holders of shares of Common Stock received pursuant to the terms of the merger, consolidation or sale; or (ii) all outstanding Options may be canceled by the Board as of
the effective date of any such merger, consolidation, liquidation or sale provided that: (x) notice of such cancellation shall be given to each holder of an Option, and (y) each holder of an Option shall have the right to exercise such Option to the
extent that the same is then exercisable or, if the Board shall have accelerated the time for exercise of all unexercised and unexpired Options, in full during the 30-day period preceding the effective date of such merger, consolidation, liquidation
or sale. 
  
 Except as expressly provided above, the issue by the
Company of shares of stock of any class, securities convertible into shares of stock of any class, for cash, property or services, either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares
or obligations of the Company convertible into such shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares then subject to outstanding Options. 
  
 15. ADOPTION AND STOCKHOLDER APPROVAL 
  
 The Plan shall become effective on the date that it is adopted by the Board
(the “Effective Date”). The Company shall submit the Plan for approval by the stockholders of the Company at the next annual meeting of stockholders of the Company to obtain the advantages under NASD, IRS, Securities and Exchange
Commission and other regulations that approval of stockholders may bestow, provided however, that Options granted under the Plan shall be conditioned upon stockholder approval of the Plan within one year of adoption by the Board. 
  
 16. TERM OF PLAN 
  
 The Plan will terminate ten (10) years from the Effective Date. 

 

 9 

 17. AMENDMENT OR TERMINATION OF PLAN 
  
 The Board may at any time terminate or amend the Plan in any respect,
including without limitation amendment of any form of Option Agreement or instrument to be executed pursuant to the Plan; provided, however, that: 
  
 (a) the Board shall not, without the approval of the stockholders of the Company, amend the Plan in any manner that requires such
stockholder approval pursuant to the Code or the regulations promulgated thereunder as such provisions apply to ISO plans or pursuant to the Exchange Act or Rule 16b-3 (or its successor), as amended, thereunder; and 
  
 (b) the terms and conditions of any awards of Options to
Directors and the category of persons eligible to be awarded such shares under the Plan shall not be amended more than once every six months, other than to comply with changes in the Code or ERISA, or the rules and regulations thereunder.

  
 18. NONEXECLUSIVITY OF THE PLAN 
  
 Neither the adoption of the Plan by the Board, the submission of the Plan to
the stockholders of the Company for approval, nor any provision of the Plan shall be construed as creating any limitations on the power of the Board to adopt such additional compensation arrangements as it may deem desirable, including, without
limitation, the granting of stock options and bonuses otherwise than under the Plan, and such arrangements may be either generally applicable or applicable only in specific cases. 
  

 10 

 19. GOVERNING LAW 
  
 The Plan and all agreements, documents and instruments entered into pursuant to the Plan shall be governed by and construed
in accordance with the internal laws of the State of California, excluding that body of law pertaining to conflict of laws. 
  
 20. DEFINITIONS 
  
 As used in the Plan, the following terms shall have the following meanings: 
  
 “Acceleration Event” means but is not limited to, any Change of Control of the Company or other
event determined in the discretion of the Committee. 
  
 “Affiliate” means any corporation that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, another corporation, where
“control” (including the terms “controlled by” and “under common control with” means the possession, direct or indirect, of the power to cause the direction of the management and policies of the corporation, whether
through the ownership of voting securities, by contract or otherwise. 
  
 “Board” means the Board of Directors of the Company. 
  
 “Change in Control” means the occurrence of any of the following events: 
  
 (A) when the Company acquires actual knowledge that any person (as such term
is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the beneficial owner (as defined in Rule 13d-3 of the Exchange Act) directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of
the Company’s then-outstanding securities; 
  
 (B) upon the
first purchase of Common Stock pursuant to a tender or exchange offer (other than a tender or exchange offer made by the Company); 
  
 (C) upon the approval by the Company’s shareholders of: (i) a merger or consolidation of the Company with or into another corporation, which does not
result in any capital reorganization or reclassification or other change in the Company’s then-outstanding shares of Common Stock), (ii) a sale or disposition of all or substantially all of the Company’s assets, or (iii) a plan of
liquidation or dissolution of the Company; 
  
 (D) if during any
period of two consecutive years, the individuals who at the beginning of such period constitute the Board of Directors of the Company cease for any reason to constitute at least a majority thereof, unless the election, or the nomination for election
by the Company’ s shareholders, of each new director is approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period; or 
  
 (E) if the Board of Directors or any designated committee determines, in its
sole discretion, that any person (such as that term is used in Sections 13(d) and 14(d) of the Exchange Act) directly or indirectly exercises a controlling influence over the management or policies of the Company. 
  

 11 

 “Code” means the Internal Revenue Code of 1986, as amended.

  
 “Committee” means the committee
appointed by the Board to administer the Plan, or if no committee is appointed, the Board. 
  
 “Company” means Anna’s Linen Company, a corporation organized under the laws of the State of California, or any successor corporation. 
  
 “Disability” means a disability,
whether temporary or permanent, partial or total, within the meaning of Section 22(e)(3) of the Code, as determined by the Committee. 
  
 “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  
 “Exercise Price” means the price at
which a holder of an Option may purchase the Shares issuable upon exercise of the Option, but in no event shall such price be less than the par value of the Common Stock. 
  
 “Fair Market Value” means, as of any date, the value of a share of the Company’s
Common Stock determined as follows: 
  
 (a) if
such Common Stock is then quoted on the Nasdaq National Market System, its last reported sale price on the Nasdaq National Market or, if no such reported sale takes place on such date, the average of the closing bid and asked prices; 
  
 (b) if such Common Stock is publicly traded and is then
listed on a national securities exchange, the last reported sale price or, if no such reported sale takes place on such date, the average of the closing bid and asked prices on the principal national securities exchange on which the Common Stock is
listed or admitted to trading; 
  
 (c) if such
Common Stock is publicly traded but is not quoted on the Nasdaq National Market nor listed or admitted to trading on a national securities exchange, the average of the closing bid and asked prices on such date, as reported by the Wall Street
Journal, for the over-the-counter market; or 
  
 (d) if none of the foregoing is applicable, by the Board of Directors of the Company in good faith. 
  
 “Insider” means an officer or director of the Company or other person whose transactions in the Company’s Common Stock
are subject to Section 16 of the Exchange Act. 
  

 12 

 “Nonemployee Director” means an director of the Company defined in
Rule 16b-3(b)(i) of the Exchange Act. 
  
 “Option” means an option to purchase Shares of Common Stock of the Company pursuant to Section 5. 
  
 “Option Agreement” means, with respect to each Option, the signed written agreement between the Company and the
Participant setting forth the terms and conditions of the Option. 
  
 “Outside Director” means any outside director as defined in Section 162(m) of the Code and the regulations issued thereunder. 
  
 “Participant” means a person who receives an Option under the Plan. 
  
 “Plan” means this Anna’s Linen
Company 1999 Stock Option Plan, as amended from time to time. 
  
 “Securities Act” means the Securities Act of 1933, as amended. 
  
 “Shares” means shares of the Company’s Common Stock, $0.01 par value, reserved for issuance under the Plan, as
adjusted pursuant to Sections 2 and 14, and any security issued in respect thereto or in replacement therefor. 
  
 “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the
Company if, at the time of granting of the Option, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other
corporations in such chain. 
  
 “Termination” or “Terminated” means, for purposes of the Plan with respect to a Participant, that the Participant has ceased to provide services as an employee,
director, consultant, independent contractor or adviser, to the Company or a Subsidiary or Affiliate of the Company, except in the case of sick leave, military leave, or any other leave of absence approved by the Committee, provided, that such leave
is for a period of not more than ninety (90) days, or reinstatement upon the expiration of such leave is guaranteed by contract or statute. The Committee shall have sole discretion to determine whether a Participant has ceased to provide services
and the effective date on which the Participant ceased to provide services (the “Termination Date”). 
  

 13 

 TABLE OF CONTENTS 
  

 14

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00084-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00084-of-00352.parquet"}]]