Pottery Barn 2009 Annual Report Download - page 186

opportunity based upon the achievement of any one or more of the following objective performance criteria,
applied to either the Company as a whole or, except with respect to shareholder return metrics, to a region,
business unit, affiliate or business segment, and measured either on an absolute basis, a per-share basis or
relative to a pre-established target, to a previous period’s results or to a designated comparison group, and,
with respect to financial metrics, which may be determined in accordance with United States Generally
Accepted Accounting Principles (“GAAP”), in accordance with accounting standards established by the
International Accounting Standards Board (“IASB Standards”) or which may be adjusted when established
to exclude any items otherwise includable under GAAP or under IASB Standards: (i) revenue (on an
absolute basis or adjusted for currency effects); (ii) cash flow (including operating cash flow or free cash
flow); (iii) cash position; (iv) earnings (which may include earnings before interest and taxes, earnings
before taxes, net earnings or earnings before interest, taxes, depreciation and amortization); (v) earnings per
share; (vi) gross margin; (vii) net income; (viii) operating expenses or operating expenses as a percentage of
revenue; (ix) operating income or net operating income; (x) return on assets or net assets; (xi) return on
equity; (xii) return on sales; (xiii) total shareholder return; (xiv) stock price; (xv) growth in shareholder
value relative to the moving average of the S&P 500 Index, or another index; (xvi) return on capital;
(xvii) return on investment; (xviii) economic value added; (xix) operating margin; (xx) market share;
(xxi) overhead or other expense reduction; (xxii) credit rating; (xxiii) objective customer indicators;
(xxiv) improvements in productivity; (xxv) attainment of objective operating goals; (xxvi) objective
employee metrics; (xxvii) return ratios; (xxviii) profit; (xxix) objective qualitative milestones; or (xxx) other
objective financial or other metrics relating to the progress of the Company or to a Subsidiary, division or
department thereof. The performance goals may differ from participant to participant, within or between
award periods and from award to award.
5.2 Award Limits. The maximum award under this Plan for each award period to any participant shall
not exceed the lesser of (i) $3,000,000 or (ii) 300% of such participant’s annual base salary in effect on the
first day of the first fiscal year of such award period, multiplied by the number of complete or partial fiscal
years in such award period. Each performance goal established under this Plan shall be established by the
Committee not later than the earlier of the date which is 90 days after the first day of the performance award
period, or the date on which 25% of the award period has elapsed.
5.3 Determination of Amount of Individual Awards. For each award period, each participant who is
or may be a Covered Employee for such award period shall receive an award equal to the specific amount
(subject to decrease as provided in this Section 5.3) determined strictly under the performance goals
established pursuant to Section 5.1. The Committee shall not have the discretion to increase, but shall have
the discretion to decrease, any award determined in accordance with this Plan. The reduction in any
participant’s award for any award period as a result of the Committee’s exercise of such discretion shall not
increase the amount of an award to any other participant (through reallocation of unutilized awards or
otherwise) with respect to such award period.
6. Award Periods; Payment of Awards.
6.1 Award Periods. All awards shall be made on the basis of an award period, which shall consist of
one or more fiscal years of the Company, or one or more quarters thereof. The award period may be
different for different awards.
6.2 Committee Certifications. As a condition precedent to the payment of any award, the Committee
shall certify, following the end of the award period, that the objective performance goal for the award has
been satisfied. The Committee shall make such determination by means of a written resolution or
certification of the Committee that is maintained in the minute book of the Company.
6.3 Payment of Awards. Awards under this Plan will be paid in cash, reasonably promptly following
the conclusion of the award period and the certification of the Committee as set forth in Section 6.2, but in
no event later than two and one-half (2 1/2) months after the conclusion of the fiscal year of the Company in
which or with which the award period ends. All awards under this Plan will be subject to withholding for
applicable employment and income taxes.
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