Document:

DIRECTOR AND OFFICER INDEMNIFICATION AGREEMENT

 

 

This Agreement made and entered into this
____ day of March, 2013 (the “Agreement”), by and between ITEX Corporation., a Nevada corporation (the “Company,”
which term shall include, where appropriate, any Entity (as hereinafter defined) controlled directly or indirectly by the Company)
and                                               ,
a Director or Officer of the Company (the “Indemnitee”):

 

WHEREAS, it is essential to the Company
that it be able to retain and attract as directors and officers the most capable persons available;

 

WHEREAS, increased corporate litigation
has subjected directors and officers to litigation risks and expenses, and the limited availability of Directors and Officers liability
insurance has made it increasingly difficult for the Company to attract and retain qualified candidates for these positions;

 

WHEREAS, the Company desires to provide
Indemnitee, to the fullest extent permitted by law, with specific contractual assurance of Indemnitee’s rights to full indemnification
against litigation risks and expenses (regardless, among other things, of any amendment to or revocation of the Certificate of
Incorporation or Bylaws or any change in the ownership of the Company or the composition of its Board of Directors);

 

WHEREAS, the Company intends that this Agreement
provide Indemnitee with greater protection than that which is provided by the Company’s Certificate of Incorporation and
Bylaws; and

 

WHEREAS, Indemnitee is relying upon the
rights afforded under this Agreement in continuing to serve as a director or officer of the Company;

 

NOW, THEREFORE, in consideration of the
promises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

 

1.Definitions.

 

(a)“Corporate Status”
describes the status of a person who is serving or has served (i) as a director of the Company, (ii) as an officer
of the Company, (iii) in any capacity with respect to any employee benefit plan of the Company, or (iv) as a director,
partner, trustee, officer, employee, or agent of any other Entity (as defined below) at the request of the Company. For purposes
of subsection (iv) of this Section 1(a), if Indemnitee is serving or has served as a director, partner, trustee, officer,
employee or agent of a Subsidiary, Indemnitee shall be deemed to be serving at the request of the Company.

 

(b)“Entity” shall
mean any corporation, partnership, limited liability company, joint venture, trust, foundation, association, organization or other
legal entity.

 

    	 

    	 

    

 

(c)“Expenses” shall
mean all fees, costs and expenses incurred by Indemnitee in connection with any Proceeding (as defined below), including, without
limitation, attorneys’ fees, disbursements and retainers (including, without limitation, any such fees, disbursements and
retainers incurred by Indemnitee pursuant to Sections 10 and 11(c) of this Agreement), fees and disbursements of expert witnesses,
private investigators and professional advisors (including, without limitation, accountants and investment bankers), court costs,
transcript costs, fees of experts, travel expenses, duplicating, printing and binding costs, telephone and fax transmission charges,
postage, delivery services, secretarial services, and other disbursements and expenses.

 

(d)“Indemnifiable Expenses,”
“Indemnifiable Liabilities” and “Indemnifiable Amounts” shall have the meanings ascribed to those terms
in Section 3(a) below.

 

(e)“Liabilities” shall
mean judgments, damages, liabilities, losses, penalties, excise taxes, fines and amounts paid in settlement.

 

(f)“Proceeding” shall
mean any threatened, pending or completed claim, action, suit, arbitration, alternate dispute resolution process, investigation,
administrative hearing, appeal, or any other proceeding, whether civil, criminal, administrative, arbitrative or investigative,
whether formal or informal, including a proceeding initiated by Indemnitee pursuant to Section 10 of this Agreement to enforce
Indemnitee’s rights hereunder.

 

(g)“Subsidiary” shall
mean any corporation, partnership, limited liability company, joint venture, trust or other Entity of which the Company owns (either
directly or through or together with another Subsidiary of the Company) either (i) a general partner, managing member or other
similar interest or (ii) (A) 50% or more of the voting power of the voting capital equity interests of such corporation, partnership,
limited liability company, joint venture or other Entity, or (B) 50% or more of the outstanding voting capital stock or other voting
equity interests of such corporation, partnership, limited liability company, joint venture or other Entity.

 

2.Services
of Indemnitee. In consideration of the Company’s covenants and commitments hereunder, Indemnitee agrees to serve as a
director or officer of the Company; provided that nothing in this Agreement shall impose any obligation on Indemnitee to continue
Indemnitee’s service as a director or officer.

 

3.Agreement
to Indemnify. The Company agrees to indemnify Indemnitee as follows:

 

(a)Proceedings
Other than by or in the Right of the Company. Subject to the exceptions contained
in Section 4(a) below, if Indemnitee was or is a party or is threatened to be made a party to any Proceeding (other than an action
by or in the right of the Company) by reason of Indemnitee’s Corporate Status, Indemnitee shall be indemnified by the Company
against all Expenses and Liabilities incurred or paid by Indemnitee in connection with such Proceeding (referred to herein as “Indemnifiable
Expenses” and “Indemnifiable Liabilities,” respectively, and collectively as “Indemnifiable Amounts”).

 

    	 

    	 

    

 

(b)Proceedings
by or in the Right of the Company. Subject to the exceptions contained in Section
4(b) below, if Indemnitee was or is a party or is threatened to be made a party to any Proceeding by or in the right of the Company
by reason of Indemnitee’s Corporate Status, Indemnitee shall be indemnified by the Company against all Indemnifiable Expenses.

 

(c)Conclusive
Presumption Regarding Standard of Care. In making any determination required to be
made under Nevada law with respect to entitlement to indemnification hereunder, the person, persons or entity making such determination
shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request therefore
in accordance with Section 5 of this Agreement, and the Company shall have the burden of proof to overcome that presumption in
connection with the making by any person, persons or entity of any determination contrary to that presumption.

 

4.Exceptions
to Indemnification. Indemnitee shall be entitled to indemnification under Sections 3(a) and 3(b) above in all circumstances
except with respect to any specific claim, issue or matter involved in the Proceeding out of which Indemnitee’s claim for
indemnification has arisen, as follows:

 

(a)Proceedings
Other than by or in the Right of the Company. If indemnification is requested under
Section 3(a) and it has been finally adjudicated by a court of competent jurisdiction that, in connection with such specific
claim, issue or matter, Indemnitee failed to act (i) in good faith and (ii) in a manner Indemnitee reasonably believed to be in
or not opposed to the best interests of the Company, or, with respect to any criminal action or proceeding, Indemnitee had reasonable
cause to believe that Indemnitee’s conduct was unlawful, Indemnitee shall not be entitled to payment of Indemnifiable Amounts
hereunder.

 

(b)Proceedings
by or in the Right of the Company. If indemnification is requested under Section 3(b)
and 

  

(i) it has been finally adjudicated by a court of competent
jurisdiction that, in connection with such specific claim, issue or matter, Indemnitee failed to act (A) in good faith and (B)
in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, Indemnitee shall not be
entitled to payment of Indemnifiable Expenses hereunder; or

 

(ii) it has been finally adjudicated by a court of competent
jurisdiction that Indemnitee is liable to the Company with respect to such specific claim, Indemnitee shall not be entitled to
payment of Indemnifiable Expenses hereunder with respect to such claim, issue or matter unless the court in which such Proceeding
was brought shall finally determine upon application that, despite the adjudication of liability, but in view of all the circumstances
of the case, Indemnitee is fairly and reasonably entitled to indemnification for such Indemnifiable Expenses which such court shall
deem proper; or

 

    	 

    	 

    

 

(iii) it has been finally adjudicated by a court of
competent jurisdiction that Indemnitee is liable to the Company for an accounting of profits made from the purchase or sale by
the Indemnitee of securities of the Company pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934,
the rules and regulations promulgated thereunder and amendments thereto or similar provisions of any federal, state or local statutory
law, Indemnitee shall not be entitled to payment of Indemnifiable Expenses hereunder.

 

(c)Insurance
Proceeds. To the extent payment is actually made to the Indemnitee under a valid and
collectible insurance policy with respect to Indemnifiable Expenses in connection with such specific claim, issue or matter, Indemnitee
shall not be entitled to payment of Indemnifiable Expenses hereunder except with respect to any excess beyond the amount of payment
under such insurance and the amount of any deductible from such insurance not otherwise paid by the Company.

 

5.Procedure
for Payment of Indemnifiable Amounts. Indemnitee shall submit to the Company a written request specifying the Indemnifiable
Amounts for which Indemnitee seeks payment under Section 3 of this Agreement and the basis for the claim. The Company shall
pay such Indemnifiable Amounts to Indemnitee within thirty (30) calendar days of receipt of the request. At the request of the
Company, Indemnitee shall furnish such documentation and information as are reasonably available to Indemnitee and necessary to
establish that Indemnitee is entitled to indemnification hereunder.

 

6.Indemnification
for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, and without
limiting any such provision, to the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a party to and
is successful, on the merits or otherwise, in any Proceeding, Indemnitee shall be indemnified against all Expenses reasonably incurred
by Indemnitee or on Indemnitee’s behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding
but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding,
the Company shall indemnify Indemnitee against all Expenses reasonably incurred by Indemnitee or on Indemnitee’s behalf in
connection with each successfully resolved claim, issue or matter. For purposes of this Agreement, the termination of any claim,
issue or matter in such a Proceeding by dismissal, with or without prejudice, by reason of settlement, judgment, order or otherwise,
shall be deemed to be a successful result as to such claim, issue or matter. 

 

7.Effect
of Certain Resolutions. Neither the settlement or termination of any Proceeding nor the failure of the Company to award indemnification
or to determine that indemnification is payable shall create a presumption that Indemnitee is not entitled to indemnification hereunder.
In addition, the termination of any proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent shall not create a presumption that Indemnitee did not act in good faith and in a manner which Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company or, with respect to any criminal action or proceeding, had
reasonable cause to believe that Indemnitee’s action was unlawful.

 

    	 

    	 

    

 

8.Agreement
to Advance Expenses; Undertaking. The Company shall advance all Expenses incurred by or on behalf Indemnitee in connection
with any Proceeding, including a Proceeding by or in the right of the Company, in which Indemnitee is involved by reason of such
Indemnitee’s Corporate Status within thirty (30) calendar days after the receipt by the Company of a written statement from
Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding.
To the extent required by Nevada law, Indemnitee hereby undertakes to repay any and all of the amount of Indemnifiable Expenses
paid to Indemnitee if it is finally determined by a court of competent jurisdiction that Indemnitee is not entitled under this
Agreement to indemnification with respect to such Expenses. This undertaking is an unlimited general obligation of Indemnitee.

 

9.Procedure
for Advance Payment of Expenses. Indemnitee shall submit to the Company a written request specifying the Indemnifiable Expenses
for which Indemnitee seeks an advancement under Section 8 of this Agreement, together with documentation evidencing that Indemnitee
has incurred such Indemnifiable Expenses. Payment of Indemnifiable Expenses under Section 8 shall be made no later than thirty
(30) calendar days after the Company’s receipt of such request.

 

10.Remedies
of Indemnitee.

 

(a)Right
to Petition Court. In the event that Indemnitee makes a request for payment of Indemnifiable
Amounts under Sections 3 and 5 above or a request for an advancement of Indemnifiable Expenses under Sections 8 and 9
above and the Company fails to make such payment or advancement in a timely manner pursuant to the terms of this Agreement, Indemnitee
may petition a court of competent jurisdiction to enforce the Company’s obligations under this Agreement.

 

(b)Burden
of Proof. In any judicial proceeding brought under Section 10(a) above, the Company
shall have the burden of proving that Indemnitee is not entitled to payment of Indemnifiable Amounts hereunder.

 

(c)Expenses.
The Company agrees to reimburse Indemnitee in full for any Expenses incurred by Indemnitee in connection with investigating, preparing
for, litigating, defending or settling any action brought by Indemnitee under Section 10(a) above, or in connection with any claim
or counterclaim brought by the Company in connection therewith, whether or not Indemnitee is successful in whole or in part in
connection with any such action.

 

(d)Failure
to Act Not a Defense. The failure of the Company (including its Board of Directors
or any committee thereof, independent legal counsel, or stockholders) to make a determination concerning the permissibility of
the payment of Indemnifiable Amounts or the advancement of Indemnifiable Expenses under this Agreement shall not be a defense in
any action brought under Section 10(a) above, and shall not create a presumption that such payment or advancement is not permissible.

 

    	 

    	 

    

 

11.Defense
of the Underlying Proceeding.

 

(a)Notice
by Indemnitee. Indemnitee agrees to notify the Company promptly upon being served
with any summons, citation, subpoena, complaint, indictment, information, or other document relating to any Proceeding which may
result in the payment of Indemnifiable Amounts or the advancement of Indemnifiable Expenses hereunder; provided, however, that
the failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise
affect in any manner any right of Indemnitee, to receive payments of Indemnifiable
Amounts or advancements of Indemnifiable Expenses unless the Company’s ability to defend in such Proceeding is materially
and adversely prejudiced thereby.

 

(b)Defense
by Company. Subject to the provisions of the last sentence of this Section 11(b) and
of Section 11(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to the payment
of Indemnifiable Amounts hereunder; provided, however that the Company shall notify Indemnitee of any such decision to defend within
twenty (20) calendar days of receipt of notice of any such Proceeding under Section 11(a) above. The Company shall not, without
the prior written consent of Indemnitee, consent to the entry of any judgment against Indemnitee or enter into any settlement or
compromise which (i) includes an admission of fault of Indemnitee or (ii) does not include, as an unconditional term thereof, the
full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably
satisfactory to Indemnitee. This Section 11(b) shall not apply to a Proceeding brought by Indemnitee under Section 10(a) above
or pursuant to Section 19 below. 

 

(c)Indemnitee’s
Right to Counsel. Notwithstanding the provisions of Section 11(b) above, if in a Proceeding
to which Indemnitee is a party by reason of Indemnitee’s Corporate Status, (i) Indemnitee reasonably concludes that he or
she may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with the position
of other defendants in such Proceeding, (ii) a conflict of interest or potential conflict of interest exists between Indemnitee
and the Company, or if the Company fails to assume the defense of such proceeding in a timely manner, Indemnitee shall be entitled
to be represented by separate legal counsel of Indemnitee’s choice at the expense of the Company. In addition, if the Company
fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any
action to declare this Agreement void or unenforceable, or institutes any action, suit or proceeding to deny or to recover from
Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee’s
choice, at the expense of the Company, to represent Indemnitee in connection with any such matter.

 

12.Representations
and Warranties of the Company. The Company hereby represents and warrants to Indemnitee as follows:

 

(a)Authority.
The Company has all necessary power and authority to enter into, and be bound by the terms of, this Agreement, and the execution,
delivery and performance of the undertakings contemplated by this Agreement have been duly authorized by the Company.

 

    	 

    	 

    

 

(b)Enforceability.
This Agreement, when executed and delivered by the Company in accordance with the provisions hereof, shall be a legal, valid and
binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the enforcement of creditors’
rights generally.

 

13.Insurance.
The Company shall at all times maintain a policy or policies of insurance in the amount of at least $2,000,000 in aggregate liability
(subject to applicable retentions) with a reputable insurance company providing the Indemnitee with coverage for losses from wrongful
acts, and to ensure the Company’s performance of its indemnification obligations under this Agreement. In all policies of
director and officer liability insurance, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee the
same rights and benefits as are accorded to the most favorably insured of the Company’s officers and directors. 

 

14.Contract
Rights Not Exclusive. The rights to payment of Indemnifiable Amounts and advancement of Indemnifiable Expenses provided by
this Agreement shall be in addition to, but not exclusive of, any other rights which Indemnitee may have at any time under applicable
law, the Company’s Certificate of Incorporation or By-laws, or any other agreement, vote of stockholders or directors (or
a committee of directors), or otherwise, both as to action in Indemnitee’s official capacity and as to action in any other
capacity as a result of Indemnitee’s serving as a director or officer of the Company.

 

15.Successors.
This Agreement shall be (a) binding upon all successors and assigns of the Company (including any transferee of all or a substantial
portion of the business, stock and/or assets of the Company and any direct or indirect successor by merger or consolidation or
otherwise by operation of law) and (b) binding on and shall inure to the benefit of the heirs, personal representatives, executors
and administrators of Indemnitee. This Agreement shall continue for the benefit of Indemnitee and such heirs, personal representatives,
executors and administrators after Indemnitee has ceased to have Corporate Status.

 

16.Subrogation.
In the event of any payment of Indemnifiable Amounts under this Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of contribution or recovery of Indemnitee against other persons, and Indemnitee shall take, at the
request of the Company, all reasonable action necessary to secure such rights, including the execution of such documents as are
necessary to enable the Company to bring suit to enforce such rights.

 

17.Change
in Law. To the extent that a change in Nevada law (whether by statute or judicial decision) shall permit broader indemnification
or advancement of expenses than is provided under the terms of the Bylaws and this Agreement, Indemnitee shall be entitled to such
broader indemnification and advancements, and this Agreement shall be deemed to be amended to such extent. 

 

18.Severability.
Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable
law, but if any provision of this Agreement, or any clause thereof, shall be determined by a court of competent jurisdiction to
be illegal, invalid or unenforceable, in whole or in part, such provision or clause shall be limited or modified in its application
to the minimum extent necessary to make such provision or clause valid, legal and enforceable, and the remaining provisions and
clauses of this Agreement shall remain fully enforceable and binding on the parties.

 

    	 

    	 

    

 

19.Indemnitee
as Plaintiff. Except as provided in Section 10(c) of this Agreement and in the next sentence, Indemnitee shall not be entitled
to payment of Indemnifiable Amounts or advancement of Indemnifiable Expenses with respect to any Proceeding brought by Indemnitee
against the Company, any Entity which it controls, any director or officer thereof, or any third party, unless the Board of Directors
of the Company has consented to the initiation of such Proceeding. This Section shall not apply to counterclaims or affirmative
defenses asserted by Indemnitee in an action brought against Indemnitee.

 

20.Modifications
and Waiver. Except as provided in Section 17 above with respect to changes in Nevada law which broaden the right of Indemnitee
to be indemnified by the Company, no supplement, modification or amendment of this Agreement shall be binding unless executed in
writing by each of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute
a waiver of any other provisions of this Agreement (whether or not similar), nor shall such waiver constitute a continuing waiver.

 

21.General
Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have
been duly given (a) when delivered by hand, (b) when transmitted by facsimile and receipt is acknowledged, or (c) if mailed by
certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:

 

		(i)	If to Indemnitee, to:

 

	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

  

		(ii)	If to the Company, to:

 

ITEX Corporation

3326 160th Avenue SE

Bellevue, Washington 98008-6418

Attention: Secretary

 

or to such other address as may have been furnished in the same
manner by any party to the others.

 

    	 

    	 

    

 

22.Governing
Law; Consent to Jurisdiction; Service of Process. This Agreement shall be governed by and construed in accordance with the
laws of the State of Nevada without regard to its rules of conflict of laws. Each of the Company and the Indemnitee hereby irrevocably
and unconditionally consents to submit to the exclusive jurisdiction of King County Superior Court, State of Washington and the
courts of the United States of America located in the State of Washington (the “Washington Courts”) for any litigation
arising out of or relating to this Agreement and the transactions contemplated hereby (and agrees not to commence any litigation
relating thereto except in such courts), waives any objection to the laying of venue of any such litigation in the Washington Courts
and agrees not to plead or claim in any Washington Court that such litigation brought therein has been brought in an inconvenient
forum. Each of the parties hereto agrees, (a) to the extent such party is not otherwise subject to service of process in the State
of Washington, to appoint and maintain an agent in the State of Washington as such party’s agent for acceptance of legal
process, and (b) that service of process may also be made on such party by prepaid certified mail with a proof of mailing receipt
validated by the United States Postal Service constituting evidence of valid service. Service made pursuant to (a) or (b) above
shall have the same legal force and effect as if served upon such party personally within the State of Washington. For purposes
of implementing the parties’ agreement to appoint and maintain an agent for service of process in the State of Washington,
each such party does hereby appoint ITEX Corporation, 3326 160th Avenue SE, Bellevue, Washington 98008-6418, as such
agent and each such party hereby agrees to complete all actions necessary for such appointment.

 

IN WITNESS WHEREOF, and intending to be
legally bound, the parties hereto have executed this Agreement as of the day and year first above written. 

 

	 	ITEX CORPORATION
	 	 	 
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 	 
	 	 	 
	 	INDEMNITEE
	 	 	 
	 	 	 
	 	 	 
	 	Print Name:a50585675ex10_1.htm

Exhibit 10.1

 

 

RESTRICTED STOCK AWARD AGREEMENT

March 3, 2013 Award

 

THIS RESTRICTED STOCK AWARD AGREEMENT (“Agreement”) is made effective and entered into as of March 3, 2013, by and between PIER 1 IMPORTS, INC., a Delaware corporation (the “Company”), and ALEXANDER W. SMITH (the “Grantee”).

 

WHEREAS, pursuant to the provisions of the Pier 1 Imports, Inc. 2006 Stock Incentive Plan, as restated and amended (the “Plan”), the Committee that administers the Plan has the authority to grant Awards under the Plan to employees of the Company; and

 

WHEREAS, the Committee has determined that the Grantee be granted a Restricted Stock Award under the Plan for the number of shares and upon the terms set forth below;

 

NOW, THEREFORE, the Company and the Grantee hereby agree as follows:

 

1.             Grant of Award.  The Grantee is hereby granted a Restricted Stock Award under the Plan (this “Award”), subject to the terms and conditions hereinafter set forth, with respect to ONE HUNDRED EIGHTY THOUSAND (180,000) restricted shares of Common Stock.  Restricted shares of Common Stock covered by this Award shall be represented by a stock certificate registered in the Grantee’s name, or by uncertificated shares designated for the Grantee in book entry form on the records of the Company’s transfer agent, subject to the restrictions set forth in this Agreement.  Any stock certificate issued shall bear the following or a similar legend:

 

“The transferability of this certificate and the shares of Common Stock represented hereby are subject to the terms, conditions and restrictions (including forfeiture) contained in the Pier 1 Imports, Inc. 2006 Stock Incentive Plan, as restated and amended and the Restricted Stock Award Agreement entered into between the registered owner and Pier 1 Imports, Inc.  A copy of such plan and agreement is on file in the offices of Pier 1 Imports, Inc., 100 Pier 1 Place, Fort Worth, Texas 76102.”

 

Any Common Stock certificates or book-entry uncertificated shares evidencing such shares shall be held in custody by the Company or, if specified by the Committee, with a third party custodian or trustee, until the restrictions thereon shall have lapsed, and, as a condition of this Award, the Grantee shall deliver a stock power, duly endorsed in blank, relating to any certificated restricted shares of Common Stock covered by this Award.

 

2.             Transfer Restrictions.  Except as expressly provided herein, this Award and the restricted shares of Common Stock issued with respect to this Award are non-transferable otherwise than by will or by the laws of descent and distribution, and may not otherwise be assigned, pledged or hypothecated or otherwise disposed of and shall not be subject to execution, attachment or similar process.  Upon any attempt to effect any such disposition, or upon the levy of any such process, this Award shall immediately become null and void and the restricted shares of Common Stock relating thereto shall be forfeited.

 

  

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3.             Restrictions.  The restrictions on the shares of Common Stock covered by this Award shall lapse and such shares shall vest at the rate of:

 

	
  

	
(i)

	
SIXTY THOUSAND (60,000) shares on March 1, 2014, provided that Grantee is employed by the Company on such date,

 

	
  

	
(ii)

	
SIXTY THOUSAND (60,000) shares on February 28, 2015, provided that Grantee is employed by the Company on such date, and

 

	
  

	
(iii)

	
SIXTY THOUSAND (60,000) shares on February 27, 2016, provided that Grantee is employed by the Company on such date.

 

The employment of the Grantee with the Company is governed by the terms and provisions of the Employment Agreement between the Company and the Grantee dated June 13, 2012 (the “Employment Agreement”). If Grantee's employment is terminated by the Company for “Cause” or by Grantee without “Good Reason” (as such terms are defined in the Employment Agreement), the Common Stock covered by this Award, to the extent not vested, shall terminate and be forfeited by the Grantee.  If Grantee's employment is terminated by the Company without Cause or by Grantee for Good Reason then any portion of the Common Stock covered by this Award, to the extent not vested as of the termination date, shall become vested and unrestricted as of such termination date. Upon “Non-Renewal” by the Company (as such term is defined in the Employment Agreement) then any portion of the Common Stock covered by this Award, to the extent not vested, shall become vested and unrestricted on the expiration of the Term (as such term is defined in the Employment Agreement). All rights and ownership in the shares of Common Stock covered by this Award as to which the restrictions thereon shall not have lapsed shall immediately vest in the Company.

 

4.            Voting and Dividend Rights.  With respect to the Common Stock covered by this Award for which the restrictions have not lapsed, the Grantee shall have the right to vote such shares, but shall not receive any cash dividends paid with respect to such shares.  Any dividend or distribution payable with respect to restricted shares of Common Stock covered by this Award that shall be paid in shares of Common Stock shall be subject to the same restrictions provided for herein. Any other form of dividend or distribution payable on shares of the restricted shares of Common Stock covered by this Award, and any consideration receivable for or in conversion of or exchange for the restricted shares of Common Stock covered by this Award, unless otherwise determined by the Committee, shall be subject to the terms and conditions of this Restricted Stock Award Agreement or with such modifications thereof as the Committee may provide in its absolute discretion.

 

5.            Distribution Following End of Restrictions.  Upon the expiration of the restrictions provided in Section 3 hereof as to any portion of the restricted shares of Common Stock covered by this Award, the Company in its sole discretion will either cause a certificate evidencing such amount of Common Stock to be delivered to the Grantee (or, in the case of his death after such events, cause such certificate to be delivered to Grantee's legal representative, beneficiary or heir) or provide book-entry uncertificated shares designated for the Grantee (or, in the case of his death after such events, provide book-entry uncertificated shares designated for Grantee's legal representative, beneficiary or heir) on the records of the Company’s transfer agent free of the legend or restriction regarding transferability, as the case may be; provided, however, that the Company shall not be obligated to issue any fractional shares of Common Stock in the event of certificated shares.  All shares of Common Stock covered by this Award which do not vest as provided in Section 3 above, shall be forfeited by the Grantee along with all rights thereto, and the ownership of such shares shall immediately vest in the Company.

 

  

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6.            Tax Withholding.  The obligation of the Company to deliver any certificate or book-entry uncertificated shares to the Grantee pursuant to Section 5 hereof shall be subject to the receipt by the Company from the Grantee of any minimum withholding taxes required as a result of the grant of the Award or lapsing of restrictions thereon.  The Grantee may satisfy all or part of such withholding tax requirement by electing to require the Company to purchase that number of unrestricted shares of Common Stock designated by the Grantee at a price equal to the Fair Market Value on the date of lapse of the restrictions or, if the Common Stock did not trade on such day, on the first preceding day on which trading occurred.  The Company shall have the right, but not the obligation, to sell or withhold such number of unrestricted shares of Common Stock distributable to the Grantee as will provide assets for payment of any tax so required to be paid by the Company for Grantee unless, prior to such sale or withholding, Grantee shall have paid to the Company the amount of such tax.  Any balance of the proceeds of such a sale remaining after the payment of such taxes shall be paid over to Grantee.  In making any such sale, the Company shall be deemed to be acting on behalf and for the account of Grantee.

 

7.             Securities Laws Requirements.  The Company shall not be required to issue shares pursuant to this Award unless and until (a) such shares have been duly listed upon each stock exchange on which the Company’s Common Stock is then listed; and (b) the Company has complied with applicable federal and state securities laws.  The Committee may require the Grantee to furnish to the Company, prior to the issuance of any shares of Common Stock in connection with this Award, an agreement, in such form as the committee may from time to time deem appropriate, in which the Grantee represents that the shares acquired by Grantee under this Award are being acquired for investment and not with a view to the sale or distribution thereof.

 

8.             Incorporation of Plan Provisions.  This Restricted Stock Award Agreement is made pursuant to the Plan and is subject to all of the terms and provisions of the Plan as if the same were fully set forth herein, and receipt of a copy of the Plan is hereby acknowledged.  Capitalized terms not otherwise defined herein shall have the same meanings set forth for such terms in the Plan.

 

9.            Miscellaneous.  This Restricted Stock Award Agreement (a) shall be binding upon and inure to the benefit of any successor of the Company, (b) shall be governed by the laws of the State of Delaware, and any applicable laws of the United States, and (c) may not be amended without the written consent of both the Company and the Grantee.  The value of the shares of Common Stock covered by this Award shall be equal to the Fair Market Value on the date of lapse of the restrictions or, if the Common Stock did not trade on such date, on the first preceding day on which trading occurred.  The terms and provisions of this Agreement shall constitute an instruction by the Grantee with respect to any uncertificated restricted shares of Common Stock covered by this Award.

  

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IN WITNESS WHEREOF, the parties hereto have executed this Restricted Stock Award Agreement on the date first above written.

 

	COMPANY:	  	
GRANTEE:

	 	  	  	  
	Pier 1 Imports, Inc.	  	  
	 	  	  	  
	 	  	  	  
	By: 	
                                                                

	  	  
	 	
Michael A. Carter

	  	
Alexander W. Smith

	 	
Senior V.P. and General Counsel,

	  	  
	 	
Secretary

	  	  

 

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