Pottery Barn 2007 Annual Report Download - page 96

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How are the directors compensated?
Directors do not presently receive any cash compensation for their service on our Board or Board committees. As
their exclusive compensation relating to Board and Board committee service, non-employee directors are
awarded equity grants. During fiscal 2007, we made the following equity grants to non-employee directors as
compensation for their service on our Board or Board committees:
Stock-Settled Stock Appreciation Rights Restricted Stock Units
Initial Election to the Board ...................... 6,750 2,250
Annual Grant for Board Service .................. 6,250 2,100
Annual Grant to Chairperson of the Audit and Finance
Committee ................................. 1,500 500
Annual Grant to Chairperson of the Compensation
Committee ................................. 500 200
Annual Grant to Chairperson of the Nominations and
Corporate Governance Committee .............. 500 200
Beginning with the 2008 Annual Meeting, we intend to make grants only of restricted stock units to
non-employee directors as compensation for their service on our Board or Board committees. The number of
restricted stock units granted will be determined by dividing the total monetary value of each award, as identified
in the following table, by the closing price of our common stock on the trading day prior to the grant date:
Value of Restricted Stock Unit Awards
Initial Election to the Board ....................... $184,000
Annual Grant for Board Service(1) ................. $170,000
Annual Grant to Chairperson of the Audit and
Finance Committee ........................... $ 41,000
Annual Grant to Chairperson of the Compensation
Committee .................................. $ 16,500
Annual Grant to Chairperson of the Nominations
and Corporate Governance Committee ............ $ 16,500
(1) Awarded on the date of the Annual Meeting so long as the non-employee director has been serving on the
Board for at least three months.
In addition to the equity awards described above, we reimburse travel expenses related to attending Board,
committee or our business meetings and offer discounts on our merchandise to all non-employee directors and
their spouses.
The Compensation Committee has also approved a share ownership policy for non-employee directors. Each
non-employee director must hold, within five years of the 2007 Annual Meeting (or within five years of joining
the Board for directors elected after the 2007 Annual Meeting), a number of shares of company stock equal to at
least one and one half times the number of restricted stock units that the director receives annually, excluding any
restricted stock units received for service on a Board committee. The share ownership requirement may be filled
by shares held outright by the director (or immediate family member in the household), shares held in trust for
the benefit of the director (or immediate family member in the household), or restricted stock units held by the
director.
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