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Exhibit 10.1
AMENDED AND RESTATED INDEMNIFICATION AGREEMENT
THIS
AMENDED AND RESTATED INDEMNIFICATION AGREEMENT (the
“Agreement”) is made as of the date set forth on
the signature page to this Agreement, by and between 99¢
Only Stores, a California corporation (the
“Company”), and the individual named on the
signature page to this Agreement (the
“Indemnitee”), a director of the
Company.
RECITALS
A.
The
Company and the Indemnitee are aware of the substantial
increase in the number of lawsuits filed against corporate
directors.
B.
The
Company and the Indemnitee recognize that the cost of
defending against such lawsuits, whether or not meritorious,
may impose substantial economic hardship on the
Company’s directors.
C.
The Company and the Indemnitee further recognize that the
legal risks, potential liabilities, and expenses of defense
associated with lawsuits against directors arising or alleged
to arise from the conduct of the affairs of the Company
frequently bear no reasonable proportion to the amount of
compensation received by the Company’s directors, and
thus may make it more difficult for the Company to obtain
experienced and capable directors.
D.
The Company has concluded that in order to attract and
retain the services of highly talented, qualified and
experienced individuals, such as the Indemnitee, to serve as
the Company’s directors and to encourage such
individuals to take the business risks necessary for the
success of the Company, it is necessary for the Company to
contractually indemnify its directors.
AGREEMENT
NOW,
THEREFORE, in consideration of the recitals set forth above
and the continued services of the Indemnitee, and as an
inducement to the Indemnitee to serve, or to continue to
serve, as a director of the Company, the Company and the
Indemnitee do hereby agree as follows:
1.
Definitions
1.1
“Expenses” means all costs, charges and expenses
actually and reasonably incurred in connection with a
Proceeding, including, without limitation, attorneys' fees,
disbursements and retainers, accounting and witness fees,
travel and deposition costs, expenses of investigations,
judicial or administrative proceedings or appeals, and any
expenses of establishing a right to indemnification pursuant
to this Agreement, including reasonable compensation for time
spent by the Indemnitee in connection with the investigation,
defense or appeal of a Proceeding or actions for
indemnification pursuant to this Agreement, for which the
Indemnitee is not otherwise compensated by the Company or any
third party; provided, however, that the term
“Expenses” does not include Losses.
1.2 “Losses”
means any amount which the Indemnitee pays or is obligated to
pay in connection with a Proceeding, including, without
limitation, (i) the amount of damages, judgments, amounts paid
in settlement, and fines, interest or penalties relating to
any Proceeding, (ii) excise taxes under the Employee
Retirement Income Security Act of 1974, as amended
(“ERISA”), relating to any Proceeding, either of
which are actually levied against the Indemnitee or paid or
payable by or on behalf of the Indemnitee; provided, however,
that the term “Losses” does not include
Expenses.
1.3 “Proceeding”
means any threatened, pending or completed action or
proceeding, whether civil, criminal, administrative or
investigative, whether brought in the name of the Company or
otherwise, in which the Indemnitee may be or may have been
involved as a party or otherwise, by reason of the fact that
the Indemnitee is or was a director of the Company, by reason
of any action taken by the Indemnitee or of any inaction on
the Indemnitee’s part while acting as such director or
by reason of the fact that the Indemnitee is or was serving at
the request of the Company as a director, officer, employee or
agent of another foreign or domestic corporation, partnership,
joint venture, trust or other enterprise, or was a director of
the foreign or domestic corporation which was a predecessor
corporation to the Company or of another enterprise at the
request of such predecessor corporation, whether or not the
Indemnitee is serving in such capacity at the time any
liability, Expense or Loss is incurred for which
indemnification or reimbursement can be provided under this
Agreement.
2.
Agreement to Serve
In
reliance on this Agreement, the Indemnitee agrees to serve, or
to continue to serve, as a director of the Company for so long
as the Indemnitee is duly elected or appointed or until the
Indemnitee resigns or fails to stand for reelection. Nothing
in this Agreement shall be construed to create any right of
the Indemnitee to continued employment with the Company or any
subsidiary or affiliate of the Company. Nothing in this
Agreement shall affect or alter any of the terms of any
otherwise valid employment agreement or other agreement
between the Indemnitee and the Company relating to the
Indemnitee's conditions and/or terms of employment or
service. In serving as a director of the Company,
the Indemnitee is relying on the right to indemnification
provided by this Agreement, and such right shall be
enforceable as a contract right.
3.
Indemnification in Third Party
Actions
The
Company shall indemnify the Indemnitee to the fullest extent
permitted by applicable law against any and all Expenses and
Losses actually and reasonably incurred by the Indemnitee in
connection with a Proceeding, other than a Proceeding by or in
the right of the Company, provided that any settlement of a
Proceeding be approved in writing by the Company and provided
the Indemnitee acted in good faith and in a manner the
Indemnitee reasonably believed to be in the best interests of
the Company and its shareholders, and with respect to any
criminal Proceeding, had no reasonable cause to believe the
Indemnitee’s conduct was unlawful.
4.
Indemnification in Proceedings By or In the Right
of the Company
The
Company shall indemnify the Indemnitee to the fullest extent
permitted by applicable law against any and all Expenses and
Losses actually and reasonably incurred by the Indemnitee, in
connection with a Proceeding by or in the right of the Company
to procure a judgment in its favor, if the Indemnitee acted in
good faith and in a manner the Indemnitee reasonably believed
to be in the best interests of the Company and its
shareholders. Notwithstanding the foregoing, no
indemnification shall be made in respect of (i) any claim,
issue or matter as to which the Indemnitee shall have been
adjudged in a final adjudication to be liable to the Company
in the performance of the Indemnitee’s duty to the
Company and its shareholders, unless and only to the extent
that the court in which the Proceeding is or was pending shall
determine upon application that, in view of all the
circumstances of the case, the Indemnitee is fairly and
reasonably entitled to indemnity for Expenses and Losses and
then only to the extent that the court shall determine; (ii)
any amounts paid by the Indemnitee in settling or otherwise
disposing of a pending action without court approval; and
(iii) Expenses incurred in defending a pending action which is
settled or otherwise disposed of without court
approval.
5.
Indemnification of Expenses of Successful Party
Notwithstanding
any other provision of this Agreement, to the extent that the
Indemnitee has been successful on the merits in defense of any
Proceeding or in defense of any claim, issue, or matter
therein, the Indemnitee shall be indemnified against any and
all Expenses actually and reasonably incurred in connection
therewith.
6.
Partial indemnification
If
the Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for a portion of
the Expenses or Losses actually and reasonably incurred by the
Indemnitee in the investigation, defense, appeal or settlement
of any Proceeding but not, however, for the total amount
thereof, the Company shall nevertheless indemnify the
Indemnitee for the portion of such Expenses and Losses to
which the Indemnitee is entitled.
7.
Advancement of Expenses
The
Expenses incurred by or on behalf of the Indemnitee in
connection with any Proceeding shall be paid by the Company in
advance of the final disposition of the Proceeding at the
written request of the Indemnitee, which may be made from time
to time, and within twenty (20) business days of such request;
provided that the Indemnitee shall undertake in writing to
repay such amount to the extent that it is ultimately
determined that the Indemnitee is not entitled to
indemnification. The Indemnitee’s obligation to repay
the Company for any such amounts shall be unsecured and no
interest shall be charged thereon. The
Indemnitee’s entitlement to advancement of Expenses
shall include those incurred in connection with any Proceeding
by the Indemnitee seeking a determination pursuant to this
Agreement.
8.
Indemnification Procedures
8.1 Notice. Promptly
after receipt by the Indemnitee of notice of the commencement
of any Proceeding, the 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 in
writing. No failure to provide or delay in giving
such notice shall constitute a waiver by the Indemnitee of his
rights hereunder or be deemed to reduce or limit the
Company’s obligations under this Agreement, unless and
only to the extent, such failure or delay actually prejudices
the Company’s rights. In addition, the Indemnitee shall
give the Company such information and cooperation as it may
reasonably require and as shall be within the
Indemnitee’s reasonable control.
8.2 Decision
on indemnification. Any indemnification under Sections 3 or 4
of this Agreement shall be made no later than twenty (20) days
after receipt of the Indemnitee’s written request,
unless a determination is made within that 20-day period by
(a) the Company’s board of directors by a majority vote
of a quorum of the board consisting of directors who are not
and were not parties to the Proceeding, or (b) independent
legal counsel in a written opinion if such a quorum is not
obtainable, that the Indemnitee is not entitled to such
indemnification according to this Agreement.
8.3 Enforcement
of this Agreement
8.3.1 The
right to indemnification or advances as provided by this
Agreement shall be enforceable by the Indemnitee in any court
of competent jurisdiction. The In
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