Pottery Barn 2014 Annual Report Download - page 176

(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.
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 not include the right to dividends, Dividend Equivalents or
other similar distribution rights and 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.
Notwithstanding the foregoing, a Stock Appreciation Right may be granted with an exercise price
lower than the minimum exercise price set forth above if such Stock Appreciation Right is granted as a
Substitute Award, except as would result in taxation under Code Section 409A or would violate
Applicable Law.
(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 Stockholder. 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 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 stockholder 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 in value 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
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