Pottery Barn 2010 Annual Report Download - page 230

under this Plan and any other plan of the Company or its parent and subsidiary corporations become exercisable
for the first time by an optionee during any calendar year in excess of $100,000, it shall constitute a
Non-Qualified Stock Option.
(c) 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, an optionee’s rights in all Stock
Options shall automatically terminate ninety (90) days following optionee’s termination of employment (or
cessation of business relationship) with the Company and its Subsidiaries for any reason. Notwithstanding the
foregoing, if an optionee 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 Options of such optionee 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
Options by will or by the laws of descent and distribution, at any time prior to the earlier of the specified
expiration date of the Options or one hundred eighty (180) days from the date of such optionee’s death.
Additionally, if an optionee 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 Options held by the optionee 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 Options or
one hundred eighty (180) days from the date of the termination of the optionee’s employment.
(d) Notice to Company of Disqualifying Disposition. Each employee who receives an Incentive Stock
Option must agree to notify the Company in writing immediately after the employee makes a Disqualifying
Disposition of any Stock acquired pursuant to the exercise of an Incentive Stock Option. A “Disqualifying
Disposition” is any disposition (including any sale) of such Stock before the later of:
(i) two years after the date the employee was granted the Incentive Stock Option, or
(ii) one year after the date the employee acquired Stock by exercising the Incentive Stock Option.
If the employee has died before such stock is sold, these holding period requirements do not apply and no
Disqualifying Disposition can occur thereafter.
SECTION 7.
STOCK APPRECIATION RIGHTS
Any Stock Appreciation Right granted under the Plan shall be in such form as the Administrator may from
time to time approve.
(a) Stock Appreciation Right Awards. The Administrator, in its discretion, may award Stock Appreciation
Rights to eligible officers and key employees of the Company, its Parent or any Subsidiary. Stock Appreciation
Rights awarded pursuant to this Section 7(a) shall be subject to the following terms and conditions and each
Stock Appreciation Right Award Agreement shall be subject such additional terms and conditions, consistent
with the terms of the Plan, as the Administrator deems desirable.
(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 seven (7) 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 seven (7) years
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