Pottery Barn 2009 Annual Report Download - page 152

determines that the category and amount of such benefits are reasonable and necessary to provide additional
incentives to attract or retain key executives.
Do the named executive officers have change of control arrangements?
The named executive officers who received restricted stock unit grants on January 6, 2006, Ms. Alber and
Ms. McCollam, will receive accelerated vesting of such awards currently outstanding in the event of a change of
control pursuant to the terms of the grant. The Compensation Committee believes these arrangements are
necessary to ensure that our named executive officers are focused on the company’s goals and objectives, as well
as the best interests of shareholders, rather than potential personal economic exposure under these particular
circumstances. Additionally, the Compensation Committee believes that these agreements will provide a smooth
transition should the company undergo such an event. Otherwise, the executive officers do not have
arrangements that provide them with specific benefits upon or following a change of control.
In addition, none of the executive officers is guaranteed any type of golden parachute excise tax gross-up. Our
equity compensation plans do not otherwise 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 given the importance of the
objectives described above.
Do our executive officers have severance protection?
As noted in the section titled “Employment Contracts and Termination of Employment and Change-of-Control
Arrangements” beginning on page 40, if either Laura J. Alber, President, or Sharon L. McCollam, 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 certain severance benefits. The Compensation
Committee believes these arrangements are necessary to ensure that these two senior executives are focused on
the company’s goals and objectives, as well as the best interests of shareholders, rather than potential personal
economic exposure under these particular circumstances.
In addition, the restricted stock units currently outstanding that were granted to Ms. Alber, Mr. Harvey and
Ms. McCollam in January 2006 vest in full upon a termination due to the death, permanent disability or
retirement of such named executive officers after attaining age 55 and working with the company or the
company’s subsidiaries for at least 10 years. The Compensation Committee believes these conditions to be
prevalent in the retention award agreements of similarly situated executives.
Mr. Lester’s retirement arrangements are described above in the section titled “Employment Contracts and
Termination of Employment and Change-of-Control Arrangements” beginning on page 40.
Otherwise, the named executive officers do not have arrangements that provide them with specific benefits upon
their termination. The Compensation Committee has considered the total potential cost of the severance benefits
to the executive officers and determined them to be reasonable and not excessive.
Do we provide perquisites to the executive officers?
The company provides executive officers, including the named executive officers, with perquisites and other
personal benefits that the company and the Compensation Committee believe are reasonable and enable the
company to attract and retain superior employees for key positions. The company provides certain perquisites to
its named executive officers, including premiums for term life insurance in excess of $50,000, a matching
contribution for investments in our 401(k) plan and a $500 monthly car allowance. Some of these perquisites are
also provided to other employees. In addition, Mr. Lester occasionally makes personal use of the corporate
aircraft. The value of all of these benefits to each of the named executive officers is detailed in the “Other Annual
Compensation from Summary Compensation” table on page 35. The Compensation Committee believes these
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