Indemnification Agreement - bebe stores inc.
FORM OF INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made and entered into as of April __, 1998 by and
between bebe stores, inc., a California corporation (the "Corporation"), and
__________ ("Agent").
RECITALS
WHEREAS, Agent performs a valuable service to the Corporation in his
capacity as a ____________ of the Corporation;
WHEREAS, the shareholders of the Corporation have adopted bylaws (the
"Bylaws") providing for the indemnification of the directors, officers,
employees and other agents of the Corporation, including persons serving at
the request of the Corporation in such capacities with other corporations or
enterprises, as authorized by the California General Corporation Law, as
amended (the "Code");
WHEREAS, the Bylaws and the Code, by their non-exclusive nature, permit
contracts between the Corporation and its directors, officers, employees and
other agents with respect to indemnification of such persons; and
WHEREAS, in order to induce Agent to continue to serve in the capacity
set forth above, the Corporation has determined and agreed to enter into this
Agreement with Agent.
NOW, THEREFORE, in consideration of Agent's continued service in the
capacity set forth above after the date hereof, the parties hereto agree as
follows:
AGREEMENT
1. SERVICE TO THE CORPORATION. Agent will serve, at the will of the
Corporation or under separate contract, if any such contract exists, as a
director, officer or agent of the Corporation or as a director, officer or
other fiduciary of an affiliate of the Corporation (including any employee
benefit plan of the Corporation) faithfully and to the best of his ability so
long as he is duly elected and qualified in accordance with the provisions of
the Bylaws or other applicable charter documents of the Corporation or such
affiliate; provided, however, that Agent may at any time and for any reason
resign from such position (subject to any contractual obligation that Agent
may have assumed apart from this Agreement) and that the Corporation or any
affiliate shall have no obligation under this Agreement to continue Agent in
any such position.
2. MAINTENANCE OF LIABILITY INSURANCE.
(a) The Corporation hereby covenants and agrees that, so long as
the Agent shall continue to serve as an agent of the Corporation and
thereafter so long as the Agent shall be subject to any possible action, suit
or proceeding by reason of the fact that the Agent was an agent of the
Corporation, the Corporation, subject to Section 2(c), shall promptly obtain
and
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maintain in full force and effect directors' and officers' liability
insurance ("D&O Insurance") in reasonable amounts from established and
reputable insurers.
(b) In all policies of D&O Insurance, the Agent shall be named as
an insured in such a manner as to provide the Agent the same rights and
benefits as are accorded to the most favorably insured of the Corporation's
directors, if the Agent is a director; or of the Corporation's officers, if
the Agent is not a director of the Corporation but is an officer; or of the
Corporation's key employees, if the Agent is not an officer or director but
is a key employee or other agent.
(c) Notwithstanding the foregoing, the Corporation shall have no
obligation to obtain or maintain D&O Insurance if the Corporation determines
in good faith that such insurance is not reasonably available, the premium
costs for such insurance are disproportionate to the amount of coverage
provided, the coverage provided by such insurance is limited by exclusions so
as to provide an insufficient benefit, or the Agent is covered by similar
insurance maintained by a subsidiary of the Corporation.
3. INDEMNITY OF AGENT. The Corporation hereby agrees to hold harmless
and indemnify Agent to the fullest extent authorized or permitted by the
provision of the Bylaws and the Code.
4. ADDITIONAL INDEMNITY. In addition to and not in limitation of the
indemnification otherwise provided for herein, and subject only to the
exclusions set forth in Section 5 hereof, the Corporation hereby further
agrees to hold harmless and indemnify Agent:
(a) against any and all expenses (including attorneys' fees),
witness fees, damages, judgments, fines and amounts paid in settlement and
any other amounts that Agent becomes legally obligated to pay because of any
claim or claims made against or by him in connection with any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
arbitrational, administrative or investigative (including an action by or in
the right of the Corporation) to which Agent is, was or at any time becomes a
party, or is threatened to be made a party, by reason of the fact that Agent
is, was or at any time becomes a director, officer, employee or other agent
of the Corporation, or is or was serving or at any time serves at the request
of the Corporation as a director, officer, employee or other agent of another
corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise, or was a director, officer, employee or agent of a
corporation which was a predecessor corporation of the Corporation or of
another enterprise at the request of such predecessor corporation; and
(b) otherwise to the fullest extent as may be provided to Agent by
the Corporation under the non-exclusivity provisions of Article VIII of the
Bylaws and the Code.
5. LIMITATIONS ON ADDITIONAL INDEMNITY. No indemnity pursuant to
Section 4 hereof shall be paid by the Corporation:
(a) on account of any claim against Agent for an accounting of
profits made from the purchase or sale by Agent of securities of the
Corporation pursuant to the provisions of
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Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto
or similar provisions of any federal, state or local statutory law;
(b) for which payment is actually made to Agent under a valid and
collectible insurance policy or under a valid and enforceable indemnity
clause, by-law or agreement, except in respect of any excess beyond payment
under such insurance, clause, by-law or agreement;
(c) if indemnification is not lawful (and, in this respect, both
the Corporation and Agent have been advised that the Securities and Exchange
Commission believes that indemnification for liabilities arising under the
federal securities laws is against public policy and is, therefore,
unenforceable and that claims for indemnification should be submitted to
appropriate courts for adjudication);
(d) in connection with any proceeding (or part thereof) initiated
by Agent, or any proceeding by Agent against the Corporation or its
directors, officers, employees or other agents, unless (i) such
indemnification is expressly required to be made by law, (ii) the proceeding
was authorized by the Board of Directors of the Corporation, (iii) such
indemnification is provided by the Corporation, in its sole discretion,
pursuant to the powers vested in the Corporation under the Code, or (iv) the
proceeding is initiated pursuant to Section 10 hereof;
(e) on account of Agent's acts or omissions that involve
intentional misconduct or a knowing and culpable violation of law;
(f) on account of Agent's acts or omissions that Agent believes to
be contrary to the best interests of the Corporation or its shareholders or
that involve the absence of good faith on the part of the Agent;
(g) in respect of any action brought by or in the right of the
Corporation for breach of Agent's duties to the Corporation and its
shareholders:
(i) on account of any transaction from which Agent derived an
improper personal benefit.
(ii) on account of Agent's acts or omissions that show a
reckless disregard for the Agent's duty to the Corporation or its
shareholders in circumstances in which Agent was aware, or should have been
aware, in the ordinary course of performing Agent's duties, of a risk of
serious injury to the Corporation or its shareholders.
(iii) on account of Agent's acts or omissions that
constitute an unexcused pattern of inattention that amounts to an abdication
of Agent's duty to the Corporation or its shareholders.
(iv) on account of any liability of Agent under Section 310 of
the Code.
(v) on account of any liability of Agent under Section 316 of
the Code.
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(vi) on account of any act or omission of Agent occurring
prior to the date when a provision in the Corporation's Articles of
Incorporation eliminating or limiting the personal liability of the
Corporation's directors for monetary damages in actions brought by or in the
right of the Corporation, as authorized by Section 204(a)(10) of the Code,
first became effective;
(h) in respect of any action by or in the right of the Corporation
to procure a judgment in its favor:
(i) in respect of any claim, issue or matter as to which
Agent shall have been adjudged to be liable to the Corporation in the
performance of Agent's duty to the Corporation and its shareholders, unless
and only to the extent that the court in which such proceeding is or was
pending shall determine upon application that, in view of all of the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for expenses and then only to the extent the court shall determine.
(ii) of amounts paid in settling or otherwise disposing of a
pending action without court approval.
(iii) of expenses incurred in defending a pending action
which is settled or otherwise disposed of without court approval; or
(i) except as provided in subdivision (d) or paragraph (4) of
subdivision (e) of Section 317 of the Code, in any circumstance where it
appears:
(i) that it would be inconsistent with a provision of the
Corporation's Articles of Incorporation or By- laws, a resolution of the
Corporation's shareholders or an agreement in effect at the time of the
accrual of the alleged cause of action asserted in the proceeding in which
the expenses were incurred or other amounts were paid, which prohibits or
otherwise limits indemnification.
(ii) that it would be inconsistent with any condition
expressly imposed by a court in approving a settlement.
6. CONTINUATION OF INDEMNITY. All agreements and obligations of the
Corporation contained herein shall continue during the period Agent is a
director, officer, employee or other agent of the Corporation (or is or was
serving at the request of the Corporation as a director, officer, employee or
other agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise) and shall continue thereafter so
long as Agent shall be subject to any possible claim or threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
arbitrational, administrative or investigative, by reason of the fact that
Agent was serving in the capacity referred to herein.
7. PARTIAL INDEMNIFICATION. Agent shall be entitled under this
Agreement to indemnification by the Corporation for a portion of the expenses
(including attorneys' fees), witness fees, damages, judgments, fines and
amounts paid in settlement and any other amounts that Agent becomes legally
obligated to pay in connection with any action, suit or proceeding
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referred to in Section 4 hereof even if not entitled hereunder to
indemnification for the total amount thereof, and the Corporation shall
indemnify Agent for the portion thereof to which Agent is entitled.
8. NOTICE AND OTHER INDEMNIFICATION PROCEDURES.
(a) Promptly after receipt by the Agent of notice of the
commencement of or the threat of commencement of any action, suit or
proceeding, the Agent shall, if the Agent believes that indemnification with
respect thereto may be sought from the Corporation under this Agreement,
notify the Corporation of the commencement or threat of commencement thereof;
provided, however, that failure of Agent to provide such notice will not
relieve the Corporation of its liability hereunder if the Corporation
receives notice of such action, suit or proceeding from any other source.
(b) If, at the time of the receipt of a notice of commencement of
an action, suit or proceeding pursuant to Section 8(a) hereof, the
Corporation has D&O Insurance in effect, the Corporation shall give prompt
notice of the commencement of such action, suit or proceeding to the insurers
in accordance with the procedures set forth in the respective policies. The
Corporation shall thereafter take all necessary or desirable action to cause
such insurers to pay, on behalf of the Agent, all amounts payable as a result
of such action, suit or proceeding in accordance with the terms of such
policies.
(c) In the event the Corporation shall be obligated to pay the
expenses of any action, suit or proceeding against the Agent, the
Corporation, if appropriate, shall be entitled to assume the defense of such
action, suit or proceeding, with counsel approved by the Agent, upon the
delivery to the Agent of written notice of its election so to do. After
delivery of such notice, approval of such counsel by the Agent and the
retention of such counsel by the Corporation, the Corporation will not be
liable to the Agent under this Agreement for any fees of counsel subsequently
incurred by the Agent with respect to the same action, suit or proceeding
except for reasonable costs of investigation, provided that (i) the Agent
shall have the right to employ his counsel in any such action, suit or
proceeding at the Agent's expense; and (ii) if (A) the employment of counsel
by the Agent has been previously authorized by the Corporation, (B) the Agent
shall have reasonably concluded that there may be a conflict of interest
between the Corporation and the Agent in the conduct of any such defense or
(C) the Corporation shall not, in fact, have employed counsel to assume the
defense of such action, suit or proceeding, the fees and expenses of Agent's
counsel shall be at the expense of the Corporation.
(d) the Corporation shall not be liable to indemnify Agent under
this Agreement for any amounts paid in settlement of any action or claim
effected without its written consent, which shall not be unreasonably
withheld. The Corporation shall be permitted to settle any action except
that it shall not settle any action or claim in any manner which would impose
any penalty or limitation on Agent without Agent's written consent, which may
be given or withheld in Agent's sole discretion.
9. EXPENSES. The Corporation shall advance, prior to the final
disposition of any proceeding, promptly following request therefor, all
expenses incurred by Agent in connection
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with such proceeding upon receipt of an undertaking by or on behalf of Agent
to repay said amounts if it shall be determined ultimately by a court of last
resort that Agent is not entitled to be indemnified under the provisions of
this Agreement, the Bylaws, the Code or otherwise; provided, however, that no
advance shall be paid by the Corporation in circumstances in which no
indemnity shall be payable by the Corporation under Section 5(i) hereof.
10. ENFORCEMENT. Any right to indemnification or advances granted by
this Agreement to Agent shall be enforceable by or on behalf of Agent in any
court of competent jurisdiction if (i) the claim for indemnification or
advances is denied, in whole or in part, or (ii) no disposition of such claim
is made within ninety (90) days of request therefor. Agent, in such
enforcement action, if successful in whole or in part, shall be entitled to
be paid also the expense of prosecuting his claim. It shall be a defense to
any action for which a claim for indemnification is made under Section 4
hereof (other than an action brought to enforce a claim for expenses pursuant
to Section 9 hereof, provided that the required undertaking has been tendered
to the Corporation) that Agent is not entitled to indemnification because of
the limitations set forth in Section 5 hereof. Neither the failure of the
Corporation (including its Board of Directors or its shareholders) to have
made a determination prior to the commencement of such enforcement action
that indemnification of Agent is proper in the circumstances, nor an actual
determination by the Corporation (including its Board of Directors or its
shareholders) that such indemnification is improper shall be a defense to the
action or create a presumption that Agent is not entitled to indemnification
under this Agreement or otherwise.
11. SUBROGATION. In the event of payment under this Agreement, the
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Agent, who shall execute all documents required and
shall do all acts that may be necessary to secure such rights and to enable
the Corporation effectively to bring suit to enforce such rights.
12. NON-EXCLUSIVITY OF RIGHTS. The rights conferred on Agent by this
Agreement shall not be exclusive of any other right which Agent may have or
hereafter acquire under any statute, provision of the Corporation's Articles
of Incorporation or Bylaws, agreement, vote of shareholders or directors, or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding office.
13. SURVIVAL OF RIGHTS.
(a) The rights conferred on Agent by this Agreement shall continue
after Agent has ceased to be a director, officer, employee or other agent of
the Corporation or to serve at the request of the Corporation as a director,
officer, employee or other agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise and shall inure to
the benefit of Agent's heirs, executors and administrators.
(b) The Corporation shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Corporation, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Corporation would be required to perform if no such
succession had taken place.
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14. INTERPRETATION OF AGREEMENT. It is understood that the parties
hereto intend this Agreement to be interpreted and enforced so as to provide
indemnification to the Agent to the fullest extent permitted by law.
15. SEVERABILITY. If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable for any reason
whatsoever, (i) the validity, legality and enforceability of the remaining
provisions of the Agreement (including without limitation, all portions of
any paragraphs of this Agreement containing any such provision held to be
invalid, illegal or unenforceable, that are not themselves invalid, illegal
or unenforceable) shall not in any way be affected or impaired thereby, and
(ii) to the fullest extent possible, the provisions of this Agreement
(including, without limitation, all portion of any paragraph of this
agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable)
shall be construed so as to give effect to the intent manifested by the
provision held invalid, illegal or unenforceable and to give effect to
Section 14 hereof.
16. SUCCESSORS AND ASSIGNS. The terms of this Agreement shall bind,
and shall inure to the benefit of, the successors and assigns of the parties
hereto.
17. GOVERNING LAW. This Agreement shall be governed exclusively by and
construed according to the laws of the State of California as applied to
contracts between California residents entered into and to be performed
entirely within California.
18. AMENDMENT AND TERMINATION. No amendment, modification, termination
or cancellation of this Agreement shall be effective unless in writing signed
by both parties hereto.
19. IDENTICAL COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall for all purposes be deemed to be an
original but all of which together shall constitute but one and the same
Agreement. Only one such counterpart need be produced to evidence the
existence of this Agreement.
20. HEADINGS. The headings of the sections of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of
this Agreement or to affect the construction hereof.
21. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given (i)
upon delivery if delivered by hand to the party to whom such communication
was directed or (ii) upon the third business day after the date on which such
communication was mailed if mailed by certified or registered mail with
postage prepaid:
(a) If to Agent, at the address indicated on the signature page
hereof.
(b) If to the Corporation, to
bebe stores, inc.
380 Valley Drive
Brisbane, CA 94005
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or to such other address as may have been furnished to Agent by the
Corporation.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the day and year first above written.
bebe stores, inc.
By
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Title
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AGENT
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[Name]
Agent Address:
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