Pottery Barn 2009 Annual Report Download - page 136

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economic terms through May 2011. Under the Consulting Agreement, Mr. Lester has agreed to give us an option
to purchase this aircraft at its fair market value at the time we entered into the Consulting Agreement.
Also, in conjunction with its review of fiscal 2009 performance and Mr. Lester’s contribution to the company’s
performance, and as part of its consideration of executive equity grants (as further described in the Compensation
Discussion and Analysis beginning on page 43), on January 25, 2010, the Compensation Committee approved an
award of 249,501 restricted stock units to Mr. Lester (representing an initial value of $5,000,000, based on the
closing price of our stock on the preceding business day). This award will vest upon his retirement, which is
defined in the award agreement as leaving the company’s employment having attained the age of 70 with at least
10 years of service (which criteria he has met). The award contains dividend equivalent rights that are only
payable on the vesting of the related restricted stock units.
Restricted Stock Unit Grants
Ms. Alber and Ms. McCollam each received a grant of 150,000 restricted stock units in fiscal 2005. Each of these
executives will receive accelerated vesting of such awards in the event of a change of control. These executive
officers will also have such awards vest in full upon a termination due to their death, disability or retirement after
attaining age 55 and working with us for at least 10 years. These awards were granted on January 6, 2006 and
modified on October 28, 2008 to remove a performance-based vesting criterion. In addition, 75,000 of each of
the grants vested in fiscal 2009. Based on a stock price of $18.98, the closing price of our common stock on
January 29, 2010, each of the remaining unvested portions of these awards has an estimated value of $1,423,500.
42