Pier 1 2015 Annual Report Download - page 149

APPENDIX A
option price. Moreover, an Option Agreement may provide for a “cashless exercise” or “net share exercise” of the Option by
establishing procedures satisfactory to the Committee with respect thereto. The terms and conditions of Option Agreements
need not be identical. Subject to the consent of the Participant, except where such consent is not required pursuant to
Paragraph XII(c), the Committee may, in its sole discretion, amend an outstanding Option Agreement from time to time in any
manner that is not inconsistent with the provisions of the Plan (including, without limitation, an amendment that accelerates the
time at which the Option, or a portion thereof, may be exercisable).
(e) Option Price and Payment. The price at which a share of Common Stock may be purchased upon exercise of an Option
shall be determined by the Committee but, subject to adjustment as provided in Paragraph XII(b), such purchase price shall not
be less than the Fair Market Value of a share of Common Stock on the date such Option is granted. The Option or portion
thereof may be exercised by delivery of an irrevocable notice of exercise to the Company, as specified by the Committee. The
purchase price of the Option or portion thereof shall be paid in full in the manner prescribed by the Committee. Separate stock
certificates shall be issued by the Company for those shares acquired pursuant to the exercise of an Incentive Stock Option and
for those shares acquired pursuant to the exercise of any Option that does not constitute an Incentive Stock Option, to the extent
the Company issues stock certificates in lieu of uncertificated shares designated to a grantee in book-entry form on the records
of the Company’s transfer agent.
(f) Restrictions on Repricing of Options. Except as provided in Paragraph XII, the Committee may not, without approval of the
stockholders of the Company, seek to effect any re-pricing of any previously granted “underwater” Option or Stock Appreciation
Right by: (i) amending or modifying the terms of the Option or Stock Appreciation Right to lower the exercise price; (ii) cancelling
the underwater Option or Stock Appreciation Right and granting either (A) replacement Options or Stock Appreciation Rights
having a lower exercise price; or (B) Restricted Stock, Restricted Stock Units, Performance Award or Phantom Stock Award in
exchange; or (iii) cancelling or repurchasing the underwater Options or Stock Appreciation Rights for cash or other securities. An
Option or Stock Appreciation Right will be deemed to be “underwater” at any time when the Fair Market Value of the Company
Common Stock covered by such Award is less than the exercise price of the Award.
(g) Stockholder Rights and Privileges. The Participant shall be entitled to all the privileges and rights of a stockholder only with
respect to such shares of Common Stock as have been purchased upon exercise of the Option and for which certificates of
stock have been registered in the Participant’s name.
(h) Options and Rights in Substitution for Options Granted by Other Employers. Options and Stock Appreciation Rights
may be granted under the Plan from time to time in substitution for options and such rights held by individuals providing services
to corporations or other entities who become employees or Directors as a result of a merger or consolidation or other business
transaction with the Company or any Affiliate.
(i) No Dividend Equivalents. No grant of an Option or Stock Appreciation Right may provide for dividends, dividend equivalents
or other similar distributions to be paid on such Option or Stock Appreciation Right.
VIII. RESTRICTED STOCK AND RESTRICTED STOCK UNIT AWARDS
(a) Forfeiture Restrictions to be Established by the Committee. Restricted Stock Unit Awards and shares of Common
Stock that are the subject of a Restricted Stock Award shall be subject to restrictions on disposition by the Participant and an
obligation of the Participant to forfeit the units or forfeit and surrender the shares to the Company under certain circumstances
(the “Forfeiture Restrictions”). The Forfeiture Restrictions shall be determined by the Committee in its sole discretion, and the
Committee may provide that the Forfeiture Restrictions applicable to an Award shall lapse upon (i) the attainment of one or more
Performance Measures, (ii) the Participant’s continued employment with the Company or continued service as a Director for a
specified period of time, (iii) the occurrence of any event or the satisfaction of any other condition specified by the Committee in
its sole discretion, or (iv) a combination of any of the foregoing. Each Restricted Stock Award and each Restricted Stock Unit
Award may have different Forfeiture Restrictions, in the discretion of the Committee. In no event shall the Forfeiture Restrictions
with respect to a Restricted Stock Award or a Restricted Stock Unit Award lapse in full prior to the expiration of (i) a one-year
period following the date of grant of the Award in the case of Forfeiture Restrictions that lapse upon the attainment of one or more
Performance Measures or (ii) a three-year period following the date of grant of the Award in the case of Forfeiture Restrictions that
lapse other than upon the attainment of one or more Performance Measures.
(b) Restricted Stock Award Terms and Conditions. Common Stock awarded pursuant to a Restricted Stock Award shall be
represented by a stock certificate registered in the name of the Participant or by uncertificated shares designated for such
Participant in book-entry form on the records of the Company’s transfer agent for Common Stock. Any stock certificate issued
with respect to a Restricted Stock Award shall bear the following or a similar legend: “The transferability of this certificate and the
PIER 1 IMPORTS, INC. 2015 Proxy Statement 67