INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT, is made as of May
22, 1998 by and between ShopKo Stores, Inc., a
Wisconsin corporation (the "Company"), and ____________
("Indemnitee").
WHEREAS, Indemnitee is a member of the Board of
Directors and/or an executive officer of the Company;
and
WHEREAS, it will be difficult to retain directors
and executive officers of the Company unless such
persons are adequately indemnified against liabilities
incurred and claims made in performance of their duties
as directors and/or executive officers of the Company;
and
WHEREAS, Article VII of the Company's By-laws (the
"By-laws") provides for the indemnification by the
Company of the officers and directors of the Company
and, as additional consideration for the services of
Indemnitee, the Company has obtained at its expense
directors' and officers' liability insurance ("D & O
Insurance") covering Indemnitee with respect to
Indemnitee's position with the Company; and
WHEREAS, to induce Indemnitee to continue to serve
as a member of the Board of Directors and/or as an
executive officer of the Company, the Company has
determined that it is in its best interests to assure
Indemnitee of the protection currently provided by the
By-laws and D & O Insurance and to indemnify Indemnitee
to the fullest extent permitted by the Wisconsin
Business Corporation Law (the "WBCL").
NOW, THEREFORE, in consideration of the premises
and the covenants contained herein, the Company and
Indemnitee do hereby covenant and agree as follows:
1. Indemnification. The Company agrees to
indemnify and hold Indemnitee harmless from and against
any and all claims, liabilities, damages, judgments,
penalties, fines, settlements, disbursements or
expenses of any type whatsoever (including, without
limitation, reasonable attorneys' fees) incurred by
Indemnitee in or arising out of (A) the status,
capacities or activities of Indemnitee as a director
and/or an executive officer of the Company, or (B) the
status, capacities or activities of Indemnitee with any
Subsidiary (as hereinafter defined) which status,
capacities or activities with such Subsidiary were
undertaken in connection with the Indemnitee's position
with the Company as a director and/or an executive
officer, in each case to the maximum extent permitted
under Subchapter VIII of the WBCL and Article VII of
the By-laws as in effect on the date hereof and as
either may be amended to provide more advantageous
rights to the Indemnitee. For purposes hereof,
"Subsidiary" means any corporation, joint venture,
limited liability company, or other business entity in
which the Company has a significant direct or indirect
equity interest.
2. Advances of Expenses. Upon written request by
Indemnitee and subject to the requirements of the WBCL,
the Company shall advance all expenses incurred by
Indemnitee in connection with the investigation,
defense, settlement or appeal of any proceeding, action
or investigation to which Indemnitee is a party or is
threatened to be made a party arising out of any matter
for which the Indemnitee is entitled to indemnification
pursuant to Section 1 hereof to the maximum extent
permitted under Subchapter VIII of the WBCL and Article
VII of the By-laws as in effect on the date of this
Agreement and as either may be amended to provide more
advantageous rights to the Indemnitee. The
indemnification provisions contained in Subchapter VIII
of the WBCL and Article VII of the By-laws, as in
effect on the date hereof and as either may be amended
to provide more advantageous indemnification rights to
Indemnitee, shall be deemed to be a contract between
the Company and Indemnitee and any amendment,
modification, revocation or repeal of any such
provisions of Subchapter VIII of the WBCL or Article
VII of the By-laws shall not limit any rights of
Indemnitee hereunder to indemnification or the
allowance of expenses.
3. Other Rights of Director. The right of
Indemnitee to indemnification or advance of expenses
pursuant to this Agreement shall not be exclusive of
other rights Indemnitee may have (i) under applicable
law, (ii) pursuant to other agreements between the
Company and Indemnitee or the By-laws, or (iii)
pursuant to any agreement with a third party (by way of
insurance, indemnification or otherwise).
4. Absolute Right to Indemnification and
Advancement of Expenses. The Company agrees that it
shall not, and the Company hereby waives all rights
that it has or may have to refuse to indemnify, or
withhold payment of amounts for which Indemnitee is
indemnified hereunder, based on any breach or alleged
breach of any of the provisions of this Agreement by
Indemnitee or for any other reason whatsoever;
provided, however, that the Agreement shall not require
the Company to make any payment prohibited by law, or
to advance expenses contrary to the provisions hereof.
In the event Indemnitee is required to bring any action
to enforce Indemnitee's rights or to collect monies due
to Indemnitee under this Agreement, and is successful
in such action, the Company shall reimburse Indemnitee
for all of Indemnitee's legal fees and expenses in
bringing and pursuing such action.
5. Amendments to Wisconsin WBCL or Company's
Articles or By-laws. The Company shall not amend its
Articles of Incorporation ("Articles") or By-laws to
reduce or eliminate the Indemnitee's right to
indemnification or advances provided for under this
Agreement. Any amendments to the Articles or By-laws
made subsequent to the date of this Agreement which
reduce or eliminate rights of persons entitled to
indemnification or advances under such Articles or By-
laws shall not limit the rights of Indemnitee pursuant
to this Agreement. If the WBCL, the Articles or the By-
laws are amended so as to provide for greater
indemnification rights or benefits, Indemnitee shall be
entitled to such greater rights and benefits
immediately upon such amendment. Subsequent amendments
to the WBCL or other applicable law shall in no way
reduce Indemnitee's rights under this Agreement.
6. Maintenance of Insurance. The Company
represents that it presently has in force and effect
directors and officers insurance under a directors' and
officers' liability insurance policy covering certain
liabilities which may be incurred by its officers and
directors. The Company agrees to purchase and maintain
in effect, for the benefit of Indemnitee, D & O
Insurance providing, in all respects, coverage not less
favorable than that presently provided pursuant to said
policy for so long as Indemnitee shall serve as
director and/or executive officer and until the later
of (i) three years after Indemnitee ceases to be a
director and/or executive officer, as the case may be,
for any reason, or (ii) for so long as Indemnitee shall
be subject to any possible claim or threatened, pending
or completed action, suit or proceeding, whether civil,
criminal or investigative, by reason of the fact that
Indemnitee was a member of the Board of Directors
and/or an executive officer, as the case may be. The
unavailability or subsequent exclusions, limitations or
deductibles contained in coverage provided by such
D & O Insurance shall in no way limit the obligations
of the Company to insure and indemnify Indemnitee to
the full extent required by this Agreement.
7. Effect of Certain Proceedings. The termination
of any proceeding or of any claim, issue or matter
therein, by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, does
not of itself adversely affect the right of Indemnitee
to indemnification hereunder or create a presumption
that indemnification is not required. The knowledge
and/or actions, or failure to act, of any director,
officer, agent or employee of the Company shall not be
imputed to Indemnitee for purposes of determining the
right to indemnification under this Agreement.
8. Notification. Promptly after receipt by
Indemnitee or the Company of any notice or document
respecting the commencement of any action, suit,
proceeding or investigation naming or involving
Indemnitee and relating to any matter concerning which
Indemnitee may be entitled to indemnification or
advances pursuant to this Agreement, the party
receiving notice will notify the other of the receipt
of same, but the failure by Indemnitee to so notify the
Company shall not relieve the Company from any
obligation under this Agreement or otherwise.
9. Amendment. This Agreement may be amended at
any time by written instrument executed by the Company
and Indemnitee.
10. Notices. All notices and other
communications between the parties with respect to this
Agreement must be made in writing and shall be deemed
to have been fully delivered as of the date on which
they are hand delivered or deposited in the United
States mail for delivery by registered or certified
mail, postage and fees prepaid.
11. Binding Effect. Due to the personal nature
of the services to be rendered by Indemnitee,
Indemnitee may not assign this Agreement. Subject to
the foregoing, the provisions of this Agreement are
binding upon and inure to the benefit of (i) Indemnitee
and Indemnitee's respective heirs, legal
representatives and administrators, and (ii) the
Company and its successors, transferees and assigns.
12. Term of Agreement. This Agreement shall
continue and terminate upon the later of: (i) 10 years
after the date that Indemnitee shall have ceased to
serve as a director and/or executive officer of the
Company; or (ii) the final termination of all pending
proceedings in respect of which Indemnitee is granted
rights of indemnification or advancement of expenses
hereunder and of any proceeding commenced by Indemnitee
pursuant to Section 14 of this Agreement relating
thereto.
13. Validity. The invalidity or unenforceability
of any provision of the Agreement shall not affect the
validity or enforceability of any other provision of
this Agreement, which shall remain in full force and
effect.
14. Arbitration. Any dispute or controversy
arising under or in connection with this Agreement
shall be discussed between the parties in a good faith
effort to arrive at a mutual settlement of any such
controversy. If, notwithstanding the parties' good
faith efforts, a dispute remains unresolved for a
period of 45 days after initial notice from one party
to the other of the dispute, the parties shall submit
such dispute to arbitration in accordance with the
rules of the American Arbitration Association, and
judgment upon the award may be entered in any court
having jurisdiction over the controversy. The costs of
the proceedings shall be paid by the Company. Unless
otherwise agreed upon, the place of arbitration
proceedings shall be Xxxxx County, Wisconsin.
15. Subrogation. In the event of payment by the
Company to Indemnitee under this Agreement, the Company
shall be subrogated to the extent of such payment to
all of the rights of recovery of Indemnitee, and
Indemnitee shall execute all documents and shall do all
things necessary to enable the Company effectively to
bring suit to enforce such rights.
16. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws
of the State of Wisconsin.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the day and year first above written.
SHOPKO STORES, INC.
______________________ By:_____________________
INDEMNITEE Its
