Pottery Barn 2005 Annual Report Download - page 139

(i) Exercise Price. The exercise price per share shall be determined by the Administrator at the time of
grant, but it shall not be less than 100% of the Fair Market Value on the date of grant.
(ii) SAR Term. The term of each Stock Appreciation Right shall be fixed by the Administrator, but no
Stock Appreciation Right shall be exercisable more than ten (10) years after the date of grant.
(iii) Exercisability; Rights of a Shareholder. Stock Appreciation Rights shall become exercisable at
such time or times, whether or not in installments, as shall be determined by the Administrator in an Award
Agreement; provided, however, that all Stock Appreciation Rights must be exercised within ten (10) years
of the date they become exercisable or they shall automatically expire. The Administrator may, at any time,
accelerate the exercisability of all or any portion of any Stock Appreciation Right. An optionee shall have
the rights of a shareholder only as to shares acquired upon the exercise of a Stock Appreciation Right and
not as to unexercised Stock Appreciation Rights.
(iv) Method of Exercise. Stock Appreciation Rights may be exercised in whole or in part, by giving
written or electronic notice of exercise to the Company, specifying the number of shares to be purchased.
Upon exercise of an SAR, a Participant shall be entitled to receive payment from the Company solely in
shares of Stock equal to an amount determined by multiplying the difference between the Fair Market Value
of a share of Stock on the date of exercise over the exercise price times the number of shares of Stock with
respect to which the SAR is exercised, rounded down to the nearest whole share.
The actual or constructive delivery of certificates (as described in Section 18(b)) representing the shares of
Stock to be delivered pursuant to the exercise of a Stock Appreciation Right will be contingent upon fulfilling
any requirements contained in the Stock Appreciation Right Award or Applicable Laws.
(b) Termination. Except as may otherwise be provided by the Administrator either in the Award Agreement
or, subject to Section 15 below, in writing after the Award Agreement is issued, a Participant’s rights in all Stock
Appreciation Rights shall automatically terminate ninety (90) days following his or her termination of
employment (or cessation of business relationship) with the Company and its Subsidiaries for any reason.
Notwithstanding the foregoing, if a Participant ceases to be employed by the Company and the Company’s
Subsidiaries by reason of his or her death, or if the employee dies within the thirty (30) day period after the
employee ceases to be employed by the Company and the Company’s Subsidiaries, any Stock Appreciation
Rights of such Participant may be exercised, to the extent of the number of shares with respect to which he or she
could have exercised it on the date of his or her death, by his or her estate, personal representative or beneficiary
who has acquired the Stock Appreciation Rights by will or by the laws of descent and distribution, at any time
prior to the earlier of the specified expiration date of the SARs or one hundred eighty (180) days from the date of
such Participant’s death. Additionally, if a Participant ceases to be employed by the Company and the
Company’s Subsidiaries by reason of his or her Disability, he or she shall have the right to exercise any Stock
Appreciation Rights held on the date of termination of employment, to the extent of the number of shares with
respect to which he or she could have exercised it on that date, at any time prior to the earlier of the specified
expiration date of the Stock Appreciation Rights or one hundred eighty (180) days from the date of the
termination of employment.
SECTION 8.
RESTRICTED STOCK AWARDS
(a) Nature of Restricted Stock Awards. A Restricted Stock Award is an Award entitling the recipient to
acquire shares of Stock subject to such restrictions and conditions as the Administrator may determine at the time
of grant (“Restricted Stock”). A Restricted Stock Award can be made without any required payment, upon
payment of par value or upon any other such payment, all as determined by the Administrator in its discretion
and in compliance with Applicable Law. Conditions may be based on continuing employment (or service as a
Non-employee Director) and/or achievement of pre-established performance goals and objectives. The terms and
conditions of each such Award Agreement shall be determined by the Administrator, and such terms and
conditions may differ among individual Awards and Participants.
A-9
Exhibits