Pottery Barn 2009 Annual Report Download - page 125

the plan or if required by applicable law or to continue to allow awards to qualify as performance-based
compensation under Section 162(m). By its terms, if approved, the amended and restated 2001 Incentive Bonus
Plan will be effective from January 25, 2011 until January 25, 2016, unless it is re-approved by the company’s
shareholders at or before this time or is earlier terminated by the Board.
What are the awards to be granted to certain individuals and groups?
Awards under the 2001 Incentive Bonus Plan are determined based on actual future performance, so future actual
awards cannot now be determined with certainty. Since our executive officers are eligible to receive awards
under the 2001 Incentive Bonus Plan, our executive officers have an interest in this proposal. Awards were paid
to our named executive officers under the 2001 Incentive Bonus Plan for fiscal 2009 in the amounts listed in the
Compensation Discussion and Analysis beginning on page 43, and as listed below. No outside directors are
eligible to participate in the plan. The committee may pay bonuses to our named executive officers outside of the
amended and restated 2001 Incentive Bonus Plan for the accomplishment of strategic or other individual goals,
but, other than with respect to Mr. Harvey (as noted below), the company did not do so for fiscal 2009.
Name and Position
Fiscal 2009
Cash Award
Named Executive Officers:
W. Howard Lester ............................................................. $2,000,000
Sharon L. McCollam ........................................................... $1,500,000
Laura J. Alber ................................................................ $1,500,000
Patrick J. Connolly ............................................................ $ 500,000
Richard Harvey(1) ............................................................. $ —
All current executive officers as a group (six persons) ..................................... $5,770,000
All current non-employee directors as a group (seven persons) .............................. $ —
Each other person who has received more than 5% of the options, warrants or
other rights under the plan ......................................................... $ —
All employees, including all current officers who are not executive officers or
directors, as a group ............................................................. $ —
TOTAL: ......................................................................... $5,770,000
(1) Mr. Harvey was not eligible to participate in the 2001 Incentive Bonus Plan during fiscal 2009.
Accordingly, the bonus he received for fiscal 2009 was granted outside of the 2001 Incentive Bonus Plan.
See the Summary Compensation Table on page 34 and the discussion under Compensation Discussion and
Analysis beginning on page 43 for further discussion about Mr. Harvey’s fiscal 2009 bonus.
Why do we recommend that the 2001 Incentive Bonus Plan be amended and restated?
We believe that the amended and restated plan is essential to our continued success. Our employees are our most
valuable assets, and cash bonuses provided under the plan will substantially assist us in continuing to attract and
retain key employees. Such awards also are crucial to our ability to motivate employees to achieve our goals. As
noted above, if shareholders do not approve the amended and restated 2001 Incentive Bonus Plan and its material
terms, the current 2001 Incentive Bonus Plan will continue in effect as currently in place and terminate on
January 25, 2011 pursuant to its terms.
What vote is required to approve this proposal?
To approve this proposal, a majority of the shares represented and voting at the Annual Meeting and a majority of
the quorum required to transact business at the Annual Meeting must vote “FOR” this proposal.
If approved, when would the amended and restated plan become effective?
The amended and restated plan would be effective from January 25, 2011 until January 25, 2016.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE
APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE 2001 INCENTIVE BONUS PLAN.
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