EXHIBIT 99.6
FORM OF INDEMNIFICATION AGREEMENT
Re: SHARPER IMAGE CORPORATION
Dear _______________:
Thank you for agreeing to serve as a nominee for election to the Board
of Directors of Sharper Image Corporation ("Sharper Image") in connection with
the proxy and/or consent solicitation that Knightspoint Partners II, L.P.,
Starboard Value and Opportunity Master Fund Ltd. and Parche, LLC (collectively,
the "Knightspoint Group") are considering undertaking to nominate and elect
directors at Sharper Image's 2006 annual meeting of stockholders, any other
meeting of stockholders held in lieu thereof, and any adjournments,
postponements, reschedulings or continuations thereof, or by means of a consent
solicitation (the "Knightspoint Group Solicitation"). Your outstanding
qualifications, we believe, will prove a valuable asset to Sharper Image and all
of its stockholders. This letter will set forth the terms of our agreement.
Each member of the Knightspoint Group agrees to severally (pro rata
based on their respective ownership of Sharper Image common stock), and not
jointly, indemnify and hold you harmless against any and all pending or
threatened claims of any nature, whenever brought, arising from the Knightspoint
Group Solicitation and any related transactions, irrespective of the outcome;
provided, however, that you will not be entitled to indemnification for claims
to the extent arising from your gross negligence, willful misconduct or criminal
actions; provided further, that upon your election as a director of Sharper
Image, this indemnification agreement and all of the Knightspoint Group's
obligations hereunder shall not apply to (i) any claim arising from any of your
acts or omissions as a director of Sharper Image or (ii) any claim arising from
any of your acts or omissions prior to becoming a director of Sharper Image that
are covered by Sharper Image's directors and officers insurance policy. This
indemnification will include any and all losses, liabilities, damages, demands,
claims, suits, actions, judgments, or causes of action, assessments, costs and
expenses, including, without limitation, interest, penalties, reasonable
attorneys' fees, and any and all reasonable costs and expenses incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, any civil, criminal, administrative or arbitration action, or any
claim whatsoever, and any and all amounts paid in settlement of any claim or
litigation asserted against, resulting, imposed upon, or incurred or suffered by
you, directly or indirectly, as a result of or arising from the Knightspoint
Group Solicitation and any related transactions (each, a "Loss").
In the event of a claim against you pursuant to the prior paragraph or
the occurrence of a Loss, you shall give the Knightspoint Group written notice
of such claim or Loss. Upon receipt of such written notice, the Knightspoint
Group will promptly provide you with counsel to represent you. Such counsel
shall be reasonably acceptable to you. In addition, you will be reimbursed
promptly for all Losses suffered by you and as incurred as provided herein. If
the Knightspoint Group does not promptly provide counsel to represent you that
is reasonably acceptable to you, you may engage counsel to represent you,
provided such counsel is reasonably acceptable to the Knightspoint Group, and
the Knightspoint Group shall be responsible for all reasonable costs and
expenses of such counsel. The Knightspoint Group may not enter into any
settlement of a Loss or claim without your consent unless such settlement
includes a release of you from any and all liability in respect of such claim
and does not provide for any admissions of liability by you. No member of the
Knightspoint Group may assign its respective obligations under this letter
agreement without your consent, which may be withheld in your sole discretion.
This letter agreement and its terms may only be amended or waived by a written
instrument signed by the Knightspoint Group and you. This letter agreement shall
be governed by the laws of the State of New York, without regard to the
principles of the conflicts of laws thereof.
If you agree to the foregoing terms, please sign below to indicate your
acceptance.
Very truly yours,
KNIGHTSPOINT PARTNERS II, L.P.
By:
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Name:
Title:
STARBOARD VALUE AND OPPORTUNITY
MASTER FUND LTD.
By:
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Name:
Title: Authorized Signatory
PARCHE, LLC
By:
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Name:
Title: Authorized Signatory
ACCEPTED AND AGREED:
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