Pottery Barn 2004 Annual Report Download - page 95

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Sharon L. McCollam
We entered into an employment agreement with Sharon L. McCollam, effective as of December 28, 2002,
relating to her employment as Senior Vice President, Chief Financial Officer (now Executive Vice President,
Chief Financial Officer). The initial term of Ms. McCollam’s agreement expires December 28, 2005, and, per its
terms, automatically extends for one-year terms until Ms. McCollam’s employment is terminated by her or by us.
If we terminate Ms. McCollam’s employment without “cause” (as defined in the agreement), or if Ms. McCollam
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 a period of one year and her target bonus
for that year, and (ii) outplacement services at a level commensurate with her position at no cost to her. In
addition, we will pay the premiums for health care coverage under COBRA for Ms. McCollam’s dependents and
Ms. McCollam until she either commences new employment or she and her dependents are no longer eligible for
COBRA coverage. Upon a “change in control” (as defined in the agreement), if Ms. McCollam is terminated
without cause or she terminates her employment for good reason, the “options” (as defined in the agreement) to
the extent not yet vested, shall vest and become exercisable in full during the time period specified in the relevant
“option agreements” (as defined in the agreement). If, prior to December 28, 2005, Ms. McCollam’s employment
is terminated because of her death or disability (in accordance with Section 4 of the agreement), we terminate her
without cause or she terminates her employment with us for good reason, then 60% of the shares underlying the
options that are not then vested shall vest and become exercisable during the time period specified in the relevant
option agreements.
COMMITTEE REPORTS
The following reports by our Compensation Committee, Nominations and Corporate Governance Committee and
Audit Committee covering fiscal 2004 shall not be deemed to be (i) “soliciting material,” (ii) “filed” with the
SEC, (iii) subject to Regulations 14A or 14C of the Securities Exchange Act of 1934, or (iv) subject to the
liabilities of Section 18 of the Securities Exchange Act of 1934. The reports shall not be deemed incorporated by
reference into any of our other filings under the Securities Exchange Act of 1934 or the Securities Act of 1933,
except to the extent we specifically incorporate it by reference into such filing.
Compensation Committee Report
Who serves on the Compensation Committee?
During fiscal 2004 through the present, the Compensation Committee consisted of Adrian D.P. Bellamy, Jeanne
P. Jackson and Richard T. Robertson. Mr. Bellamy serves as Chairman of the Compensation Committee. The
Board has determined that each member of the Compensation Committee is independent under the NYSE rules
as currently in effect, is an outside director as such term is defined with respect to Section 162(m) of the Internal
Revenue Code and is a non-employee director under Section 16(b) of the Securities Exchange Act of 1934. None
of the committee members has ever served as an officer of the company.
What is the role of the Compensation Committee with respect to executive compensation?
The Compensation Committee administers the company’s compensation programs, including compensation
arrangements and equity plans. We have engaged an independent executive compensation consulting firm to
assist us in discharging our responsibilities. Our role is detailed in the Compensation Committee Charter, which
was amended and restated by the Board on March 16, 2004. The Compensation Committee Charter is available
on the company’s website at www.williams-sonomainc.com and was attached to last year’s Proxy Statement.
Specifically, we:
• Review and approve corporate goals and objectives relevant to the compensation of the Chief Executive
Officer, evaluate the Chief Executive Officer’s performance in light of those goals and objectives, and
review and approve the level of compensation, including base salary, bonus, equity compensation, and
any other benefits to be provided to the Chief Executive Officer based on this evaluation;
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