Pottery Barn 2004 Annual Report Download - page 94

Option Grants in Fiscal 2004
This table sets forth certain information regarding all stock option grants made to the named executive officers
during fiscal 2004.
Individual Grants
Name
Number of
Securities
Underlying
Options
Granted
Percentage of
Total Options
Granted to
Employees in
Fiscal Year(1)
Exercise or
Base Price
Per Share
Expiration
Date(2)
Potential Realized
Value at Assumed Annual
Rates of Stock Price
Appreciation for Option
Term(3)
5% 10%
W. Howard Lester ............. 12,500 0.80% $32.39 6/30/2014 $ 254,624 $ 645,266
Edward A. Mueller ............ 100,000 6.44 32.39 6/30/2014 2,036,990 5,162,132
Patrick J. Connolly ............ 50,000 3.22 32.39 6/30/2014 1,018,495 2,581,066
Laura J. Alber ................ 50,000 3.22 32.39 6/30/2014 1,018,495 2,581,066
Sharon L. McCollam ........... 50,000 3.22 32.39 6/30/2014 1,018,495 2,581,066
(1) In fiscal 2004, we granted options to purchase 1,553,900 shares of our common stock to our employees.
(2) Stock options generally vest in equal annual installments over a five year period.
(3) The 5% and 10% assumed rates of appreciation are required by the SEC and do not represent our estimate or
projection of our future stock price.
Aggregate Option Exercises in the Last Fiscal Year and Fiscal Year-End Option Values
This table sets forth information with respect to the named executive officers’ exercise of stock options during
fiscal 2004 and the fiscal year-end value of unexercised options held at the end of fiscal 2004.
Name
Shares
Acquired on
Exercise
Value
Realized
Number of Securities
Underlying Unexercised
Options at
Fiscal Year-End
Value of Unexercised
In-the-Money
Options at
Fiscal Year-End(1)
Exercisable Unexercisable Exercisable Unexercisable
W. Howard Lester ......... 150,000 $3,964,500 1,460,000 132,500 $36,843,288 $2,755,822
Edward A. Mueller ......... — — 490,000 700,000 4,564,295 5,332,000
Patrick J. Connolly ......... 36,000 1,055,280 708,000 162,000 15,971,677 2,295,499
Laura J. Alber ............. 75,000 1,472,530 242,400 269,200 5,291,046 4,619,413
Sharon L. McCollam ....... — — 167,000 172,000 3,896,779 2,274,714
(1) The fiscal year-end values are based upon the difference between the closing price of our common stock on
the NYSE on January 28, 2005 ($34.53 per share) and the exercise price of the options.
Employment Contracts and Termination of Employment and Change-of-Control Arrangements
Laura J. Alber
We entered into an employment agreement with Laura J. Alber, effective as of March 19, 2001, relating to her
employment as Executive Vice President, Pottery Barn (now President, Pottery Barn Brands). The initial term of
the agreement expired March 19, 2004 and, per its terms, automatically extends for one-year terms until Ms.
Alber’s employment is terminated by her or by us. If we terminate Ms. Alber’s employment without “cause” (as
defined in the agreement), or if she terminates her employment with us for “good reason” (as defined in the
agreement), she will be entitled to receive (i) continuation of her base salary at the time of termination for up to
one year, and (ii) outplacement services at a level commensurate with Ms. Alber’s position at no cost to Ms.
Alber. In addition, we will pay the premiums for health coverage under COBRA for Ms. Alber and her
dependents until Ms. Alber either commences new employment or Ms. Alber or her dependents are no longer
eligible for COBRA coverage.
17
Proxy