Pottery Barn 2006 Annual Report Download - page 122

Mr. Lester also makes personal use of our company aircraft as described in the “Other Annual Compensation
from Summary Compensation Table” on page 14. Mr. Lester received no other additional material compensation
or benefits not provided to all executives.
Are there any other compensation considerations?
The company believes its benefit programs generally should be comparable for all employees. However, we
recommend additional benefits for certain individuals from time to time if we determine that the category and
amount of such benefits are reasonable and necessary to provide additional incentives to attract or retain key
executives.
Do our executive officers have change of control arrangements?
Our named executive officers who received restricted stock unit grants in fiscal 2005, as described above, will
receive accelerated vesting of such awards in the event of a change of control. In addition, Mr. Lester will receive
accelerated vesting of the SSAR grant of 400,000 shares as described above. Ms. Alber and Ms. McCollam are
provided with certain change of control arrangements as described starting on page 19. Otherwise, our executive
officers do not have arrangements that provide them with specific benefits upon or following a change of control.
None of our executive officers is guaranteed any type of golden parachute excise tax gross-up. Our equity
compensation plans do not provide for automatic vesting acceleration upon or following a change of control. We
have considered the total potential cost of the change of control protection afforded to our executive officers and
have determined that it is reasonable and not excessive.
Do our executive officers have severance protection?
As noted in the “Employment Contracts and Termination of Employment and Change-of-Control Arrangements”
section, if either Laura J. Alber, our President, or Sharon L. McCollam, our Executive Vice President, Chief
Operating and Chief Financial Officer, is terminated without cause or voluntarily terminates her employment for
good reason, she will be entitled to severance benefits.
Also, our named executive officers who received restricted stock unit grants in fiscal 2005 will have such awards
vest in full upon a termination due to their death, permanent disability or retirement after attaining age 55 and
working with us or our subsidiaries for at least 10 years.
Finally, as described above, if Mr. Lester ceases service due to death or disability or upon a change of control,
the SSAR award granted to him on January 12, 2007 will vest in full.
Otherwise, our named executive officers do not have arrangements that provide them with specific benefits upon
their termination. We have considered the total potential cost of the severance benefits to our executive officers
and determined them to be reasonable and not excessive.
Have we changed our equity compensation practices in light of the new equity compensation accounting rules?
Commencing with our 2006 fiscal year, the company is required to account for equity compensation awards
under SFAS 123R. Under FAS 123R, the company is required to record compensation expense in connection
with equity awards to associates and members of the Board. We actively consider the potential impact of the
changes in the financial accounting treatment of equity compensation arrangements on the company’s reported
earnings.
Do we provide perquisites to our executive officers?
The company provides executive officers with perquisites and other personal benefits that the company and the
Compensation Committee believe are reasonable and consistent with our overall compensation program and enable
the company to attract and retain superior employees for key positions. The Company provides certain perquisites to
its executive officers, including premiums for term life insurance in excess of $50,000, a matching contribution for
investments in our 401(k) Plan, a $500 monthly car allowance and an annual executive medical supplement of up to
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