Pottery Barn 2005 Annual Report Download - page 144

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SECTION 17.
MERGER & SIMILAR TRANSACTION PROVISIONS
In contemplation of and subject to the consummation of a consolidation or merger or sale of all or
substantially all of the assets of the Company in which outstanding shares of Stock are exchanged for securities,
cash or other property of an unrelated corporation or business entity or in the event of a liquidation or dissolution
of the Company or in the case of a corporate reorganization of the Company (in each case, a “Transaction”), the
Board, or the board of directors of any corporation or other entity assuming the obligations of the Company, may,
in its discretion, take any one or more of the following actions, as to outstanding Awards: (i) provide that such
Awards shall be assumed or equivalent awards shall be substituted, by the acquiring or succeeding corporation or
other entity (or an affiliate thereof), and/or (ii) upon written notice to the Participants, provide that all Awards
will terminate immediately prior to the consummation of the Transaction. In the event that, pursuant to clause (ii)
above, Awards will terminate immediately prior to the consummation of the Transaction, all outstanding Awards
shall vest 100% immediately prior to their termination. Moreover, in such event, all Awards, other than Options
and SARs, shall be fully settled in kind, at such appropriate consideration as determined by the Administrator in
its sole discretion after taking into account any and all consideration payable per share of Stock pursuant to the
Transaction (the “Transaction Price”) and all Stock Options and SARs shall be fully settled in kind in an amount
equal to the difference between (A) the Transaction Price times the number of shares of Stock subject to such
outstanding Stock Options or SARs (to the extent then exercisable at prices not in excess of the Transaction
Price) and (B) the aggregate exercise price of all such outstanding Stock Options and SARs. In the event of a
Transaction that qualifies as a change in the ownership or effective control of the Company under Code
Section 409A or the proposed or final Treasury Regulations thereunder, as applicable, any outstanding Deferred
Stock Awards shall be paid out to the Participant, to the extent then vested, upon the date of such Transaction.
SECTION 18.
GENERAL PROVISIONS
(a) No Distribution; Compliance with Legal Requirements. The Administrator may require each person
acquiring Stock pursuant to an Award to represent to and agree with the Company in writing that such person is
acquiring the shares without a view to distribution thereof. No shares of Stock shall be issued pursuant to an
Award until all Applicable Laws have been satisfied. The Administrator may require the placing of such stop-
orders and restrictive legends on certificates for Stock (as described in Section 18(b) below) as it deems
appropriate.
(b) Stock Certificates. To the extent the Company uses certificates to represent shares of Stock, certificates
to be delivered to Participants under this Plan shall be deemed delivered for all purposes when the Company or a
stock transfer agent of the Company shall have mailed such certificates in the United States mail, addressed to
the Participant, at the Participant’s last known address on file with the Company. Any reference in this
Section 18(b) or elsewhere in the Plan to actual stock certificates and/or the delivery of actual stock certificates
shall be deemed satisfied by the electronic record-keeping and electronic delivery of shares of Stock or other
mechanism then utilized by the Company and its agents for reflecting ownership of such shares.
(c) Other Compensation Arrangements; No Employment Rights. Nothing contained in this Plan shall prevent
the Board from adopting other or additional compensation arrangements, including trusts, and such arrangements
may be either generally applicable or applicable only in specific cases. The adoption of this Plan and the grant of
Awards shall not confer upon any individual any right to continued employment or service as a director with the
Company or any Subsidiary and shall not interfere in any way with the right of the Company or any Subsidiary to
terminate the employment of any of its employees at any time, with or without cause or notice.
(d) Trading Policy Restrictions. Awards and related transactions under the Plan shall be subject to such
Company insider-trading-policy-related restrictions, terms and conditions as may be established by the
Administrator, or in accordance with policies set by the Administrator, from time to time.
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