Pottery Barn 2010 Annual Report Download - page 227

SECTION 3.
STOCK ISSUABLE UNDER THE PLAN; TERM OF PLAN;
RECAPITALIZATIONS; MERGERS; SUBSTITUTE AWARDS
(a) Stock Issuable. Subject to the provisions of Section 3(c), 25,005,743 shares of Stock are reserved and
available for issuance under the Plan, plus any shares subject to any outstanding options under the Company’s
1993 Stock Option Plan and the Company’s 2000 Non-Qualified Stock Option Plan that subsequently expire
unexercised, up to a maximum of 754,160 shares. The shares available for issuance under the Plan may be
authorized but unissued shares of Stock or shares of Stock reacquired by the Company. If any portion of an
Award is forfeited, cancelled, satisfied without the issuance of Stock or otherwise terminated, the shares of Stock
underlying such portion of the Award shall be added back to the shares of Stock available for issuance under the
Plan.
Any shares subject to Options or SARs shall be counted against the numerical limits of this Section 3(a) as
one share for every share subject thereto. With respect to Awards granted on or after the date of receiving
shareholder approval of the amended Plan in 2006, any shares subject to Restricted Stock, Restricted Stock Units
or Deferred Stock Awards with a per share or unit purchase price lower than 100% of Fair Market Value on the
date of grant shall be counted against the numerical limits of this Section 3(a) as one and nine-tenths shares for
every one share subject thereto. To the extent that a share that was subject to an Award that counted as one and
nine-tenths shares against the Plan reserve pursuant to the preceding sentence is recycled back into the Plan
under the next paragraph of this Section 3(a), the Plan shall be credited with one and nine-tenths Shares.
If an Award expires or becomes unexercisable without having been exercised in full, or, with respect to
Restricted Stock, Restricted Stock Units or Deferred Stock Awards, is forfeited to or repurchased by the
Company at its original purchase price due to such Award failing to vest, the unpurchased Shares (or for
Restricted Stock, Restricted Stock Units or Deferred Stock Awards, the forfeited or repurchased shares) which
were subject thereto shall become available for future grant or sale under the Plan (unless the Plan has
terminated). With respect to SARs, when an SAR is exercised, the shares subject to a SAR grant agreement shall
be counted against the numerical limits of Section 3(a) above, as one share for every share subject thereto,
regardless of the number of shares used to settle the SAR upon exercise (i.e., shares withheld to satisfy the
exercise price of an SAR shall not remain available for issuance under the Plan). Shares that have actually been
issued under the Plan under any Award shall not be returned to the Plan and shall not become available for future
distribution under the Plan; provided, however, that if Shares of Restricted Stock, Restricted Stock Units or
Deferred Stock Awards are repurchased by the Company at their original purchase price or are forfeited to the
Company due to such Awards failing to vest, such Shares shall become available for future grant under the Plan.
Shares used to pay the exercise price of an Option shall not become available for future grant or sale under the
Plan. Shares used to satisfy tax withholding obligations shall not become available for future grant or sale under
the Plan. Any payout of Dividend Equivalents, because they are payable only in cash, shall not reduce the
number of Shares available for issuance under the Plan. Conversely, any forfeiture of Dividend Equivalents shall
not increase the number of Shares available for issuance under the Plan.
(b) Term of Plan. No Awards shall be made more than ten (10) years after the date upon which the Board
approved the amended and restated Plan in 2011. Notwithstanding the foregoing, Stock Options and Stock
Appreciation Rights granted hereunder may, except as otherwise expressly provided herein, be exercisable for up
to seven (7) years after the date of grant.
(c) Impact of Transactions. Subject to the provisions of Section 17, if, through or as a result of any merger,
consolidation, sale of all or substantially all of the assets of the Company, reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other similar transaction, the outstanding shares
of Stock are increased or decreased or are exchanged for a different number or kind of shares or other securities
of the Company, or additional shares or new or different shares or other securities of the Company or other
non-cash assets are distributed with respect to such shares of Stock or other securities, the Administrator will
D-5
Exhibits