Restoration Hardware 2012 Annual Report Download - page 43

consultant terminates, he or she may exercise his or her stock appreciation right, to the extent vested, only to the
extent provided in the stock appreciation right agreement.
Restricted Stock Awards. The 2012 Stock Incentive Plan allows for the grant of restricted stock. Restricted
stock awards are shares of our common stock that vest in accordance with terms and conditions established by
the administrator. The administrator will determine the number of shares of restricted stock granted to any
employee, director or consultant. The administrator may impose whatever conditions on vesting it determines to
be appropriate. For example, the administrator may set restrictions based on the achievement of specific
performance goals. Shares of restricted stock that do not vest are subject to our right of repurchase or forfeiture.
Restricted Stock Units. The 2012 Stock Incentive Plan allows for the grant of restricted stock units.
Restricted stock units are awards that will result in payment to a recipient at the end of a specified period only if
the vesting criteria established by the administrator are achieved or the award otherwise vests. The administrator
may impose whatever conditions to vesting, or restrictions and conditions to payment that it determines to be
appropriate. The administrator may set restrictions based on the achievement of specific performance goals or on
the continuation of service or employment. Payments of earned restricted stock units may be made, in the
administrator’s discretion, in cash, with shares of our common stock or other securities, or a combination thereof.
Transferability of Awards. The 2012 Stock Incentive Plan allows for the transfer of awards under the 2012
Stock Incentive Plan only (i) by will, (ii) by the laws of descent and distribution and (iii) for awards other than
incentive stock options, to the extent authorized by the administrator. Only the recipient of an incentive stock
option may exercise such award during his or her lifetime.
Certain Adjustments. In the event of certain changes in our capitalization, to prevent enlargement of the
benefits or potential benefits available under the 2012 Stock Incentive Plan, the administrator will make
adjustments to one or more of the number of shares that are covered by outstanding awards, the exercise or
purchase price of outstanding awards, the numerical share limits contained in the 2012 Stock Incentive Plan, and
any other terms that the administrator determines require adjustment. In the event of our complete liquidation or
dissolution, all outstanding awards will terminate immediately upon the consummation of such transaction.
Corporate Transactions and Changes in Control. The 2012 Stock Incentive Plan provides that except as
otherwise provided in an individual award agreement, in the event of a corporate transaction or change in control,
as such terms are defined in the 2012 Stock Incentive Plan, the portion of each outstanding award that is neither
assumed nor replaced will automatically become fully vested and exercisable and be released from any
repurchase or forfeiture rights (other than repurchase rights exercisable at fair market value) immediately prior to
the specified effective date of such corporate transaction or change in control. In addition, any incentive stock
option, as defined in the 2012 Stock Incentive Plan, accelerated in connection with a corporate transaction or
change in control, will remain exercisable as an incentive stock option only to the extent the dollar limitation
under the Code is not exceeded.
Plan Amendments and Termination. The 2012 Stock Incentive Plan will automatically terminate ten years
following the date it becomes effective, unless we terminate it sooner. In addition, our board of directors has the
authority to amend, suspend or terminate the 2012 Stock Incentive Plan provided such action does not impair the
rights under any outstanding award.
401(k) Plan
We maintain a 401(k) retirement savings plan. Each participant who is a United States employee may
contribute to the 401(k) plan, through payroll deductions, up to 50% of his or her salary limited to the maximum
allowed by the Internal Revenue Service regulations. All amounts contributed by employee participants and
earnings on these contributions are fully vested at all times and are not taxable to participants until withdrawn.
Employee participants may elect to invest their contributions in various established funds. We may make
contributions to the accounts of plan participants.
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Proxy Statement