EXHIBIT 99.7
ADDENDUM
TO
STOCK ISSUANCE AGREEMENT
The following provisions are hereby incorporated into, and are hereby
made a part of, that certain Stock Issuance Agreement (the "Issuance Agreement")
by and between Restoration Hardware, Inc. (the "Corporation") and ____________
("Participant") evidencing the stock issuance made on this date to Participant
under the terms of the Corporation's 1998 Stock Incentive Plan, and such
provisions shall be effective immediately on such issue date. All capitalized
terms in this Addendum, to the extent not otherwise defined herein, shall have
the meanings assigned to such terms in the Issuance Agreement.
INVOLUNTARY TERMINATION FOLLOWING
CHANGE IN CONTROL
1. To the extent the Repurchase Right is assigned to the successor
corporation (or parent thereof) in a Change in Control or is otherwise continued
in full force and effect pursuant to the terms of the Change in Control
transaction, no accelerated vesting of the Purchased Shares shall occur upon
such Change of Control, and the Repurchase Right shall continue to remain in
full force and effect in accordance with the provisions of the Issuance
Agreement. The Participant shall, over Participant's period of Service
following the Change in Control, continue to vest in the Purchased Shares in one
or more installments in accordance with the provisions of the Issuance
Agreement.
2. Immediately upon an Involuntary Termination of Participant's
Service within eighteen (18) months following the Change in Control, the
Repurchase Right shall terminate automatically, and all the Purchased Shares
shall vest in full at that time.
3. For purposes of this Addendum, the following definitions shall be
in effect:
An INVOLUNTARY TERMINATION shall mean the termination of
Participant's Service by reason of:
(i) Participant's involuntary dismissal or discharge by the
Corporation for reasons other than Misconduct, or
(ii) Participant's voluntary resignation following (A) a change
in Participant's position with the Corporation (or Parent or Subsidiary
employing Participant) which materially reduces Participant's duties and
responsibilities or the level of management to which Participant reports,
(B) a reduction in Participant's level of compensation (including base
salary, fringe benefits and target bonus under any corporate performance
based bonus or incentive programs) by more than fifteen percent (15%) or
(C) a relocation of Participant's place of employment by more than fifty
(50) miles, provided and
only if such change, reduction or relocation is effected by the Corporation
without Participant's consent.
MISCONDUCT shall mean the commission of any act of fraud, embezzlement
or dishonesty by the Participant, any unauthorized use or disclosure by the
Participant of confidential information or trade secrets of the Corporation (or
any Parent or Subsidiary), or any other intentional misconduct by the
Participant adversely affecting the business or affairs of the Corporation (or
any Parent or Subsidiary) in a material manner. The foregoing definition shall
not be deemed to be inclusive of all the acts or omissions which the Corporation
(or any Parent or Subsidiary) may consider as grounds for the dismissal or
discharge of the Participant or other person in the Service of the Corporation
(or any Parent or Subsidiary).
IN WITNESS WHEREOF, Restoration Hardware, Inc. has caused this
Addendum to be executed by its duly-authorized officer as of the Effective Date
specified below.
RESTORATION HARDWARE, INC.
By:________________________________________
Title:_____________________________________
EFFECTIVE DATE: _________________, 199__
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