Pottery Barn 2008 Annual Report Download - page 123

Employment Contracts and Termination of Employment and Change-of-Control Arrangements
Laura J. Alber
We entered into an employment agreement with Laura J. Alber, currently our President, effective as of March 19,
2001 and amended as of November 11, 2008. 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 her position at no cost to her. In addition, we will pay the premiums for health coverage
under COBRA for Ms. Alber and her dependents for up to 18 months or, if earlier, until Ms. Alber either
commences new employment or Ms. Alber or her dependents are no longer eligible for COBRA coverage.
The following table describes the payments and/or benefits which would have been owed by us to Ms. Alber as
of February 1, 2009 if her employment had been terminated in various situations.
Compensation and Benefits
For Good
Reason
Involuntary
Without Cause
Change-in-
Control Death Disability
Base Salary(1) ............. $800,000 $800,000 — Through date of death $ 200,000(2)
Restricted Stock Units(3) .... — — $1,188,000 $1,188,000 $1,188,000
Health Care Benefits(4) ..... $ 25,848 $ 25,848 — — —
Other Perquisites(5) ........ $150,000 $150,000 — — —
(1) Based on Ms. Alber’s base salary as of February 1, 2009.
(2) Payment of 13 weeks of salary.
(3) Acceleration of vesting of 150,000 restricted stock units. Value is based on a stock price of $7.92, the
closing price of our common stock on January 30, 2009, the last business day of fiscal 2008.
(4) Based on a monthly health insurance premium of $1,436 to be paid by the company for 18 months, which is
the period provided under COBRA.
(5) Value of outplacement services based on current estimate of costs for these services.
Sharon L. McCollam
We entered into an employment agreement with Sharon L. McCollam, effective as of December 28, 2002 and
amended as of November 11, 2008. She is currently Executive Vice President, Chief Operating and Chief
Financial Officer. The initial term of Ms. McCollam’s agreement expired 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 plus an additional
lump sum amount equal to 80% of Ms. McCollam’s base salary, 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 and her dependents for up to 18 months or, if earlier, until she either
commences new employment or she and her dependents are no longer eligible for COBRA coverage.
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