Pottery Barn 2014 Annual Report Download - page 175

extent permitted by Applicable Law, payment of the purchase price may be made by one or more of the
following methods to the extent provided in the Award Agreement:
(A) In cash, by certified or bank check or other instrument acceptable to the Administrator;
(B) In the form of shares of Stock that are not then subject to restrictions under any Company
plan and that have been beneficially owned by the optionee for at least six months (or shorter
period, if any, required to avoid adverse accounting or other consequences), if permitted by the
Administrator in its discretion. Such surrendered shares shall be valued at Fair Market Value on
the exercise date;
(C) By the optionee delivering to the Company a properly executed exercise notice together
with irrevocable instructions to a broker to promptly deliver to the Company cash or a check
payable and acceptable to the Company to pay the purchase price; provided that the payment
method described in this Section 6(a)(iv)(C) shall not be available to an optionee who is subject to
the reporting and other provisions of Section 16 of the Exchange Act unless the optionee and the
broker comply with such procedures and enter into such agreements as the Administrator shall
prescribe as a condition of such payment procedure; or
(D) By a net exercise procedure.
The actual or constructive delivery of certificates (as described in Section 18(b)) representing the shares of
Stock to be purchased pursuant to the exercise of a Stock Option will be contingent upon receipt from the
optionee (or a purchaser acting in his or her stead in accordance with the provisions of the Stock Option) by the
Company of the full purchase price for such shares and fulfilling any other requirements contained in the Stock
Option or Applicable Laws.
(b) Annual Limit on Incentive Stock Options. To the extent that the aggregate Fair Market Value
(determined as of the time of grant) of the shares of Stock with respect to which Incentive Stock Options granted
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
A-9