Pottery Barn 2009 Annual Report Download - page 187

6.4 Termination of Employment. An award that would otherwise be payable to a participant who is
not employed by the Company on the last day of an award period will not be paid (or will not be granted, as
the case may be), except that, on the grant of an award, the Committee may specify that the award will be
paid (or will be granted, as the case may be) in full or on a prorated basis in the event that, before the end of
such award period, a “change in control” of the Company occurs or the participant (i) dies, (ii) becomes
“disabled,” or (iii) is involuntarily terminated by the Company without “cause,” or voluntarily terminates his
or her employment with the Company for “good reason” within a specified period following a “change in
control” of the Company. For purposes of this Section 6.4, the terms “disabled” (or “disability”), “cause,”
“good reason,” and “change in control” shall be as defined in the participant’s employment agreement with
the Company, or, if not so defined, shall be defined in writing by the Committee at the time of the grant of
the award. In the event that an award is paid pursuant to this Section 6.4, then the award shall not constitute
performance-based compensation under Code Section 162(m). No payment under the Plan shall be made
prior to the end of the applicable award period in connection with a participant’s termination of service
unless and until the participant has had a “separation from service” within the meaning of Code
Section 409A and the final regulations and any guidance promulgated thereunder, as each may be amended
from time to time (“Section 409A”), as determined by the Company. In addition, notwithstanding anything
in the Plan to the contrary, if (x) a participant experiences a “separation from service” within the meaning of
Section 409A, as determined by the Company,(y) such participant is a “specified employee” within the
meaning of Section 409A at the time of such separation from service (other than due to death) and (z) the
payment of any award under this Section 6.4, when considered together with any other severance payments
or separation benefits that constitute deferred compensation under Section 409A, (together, the “Deferred
Compensation Separation Benefits”), on or following the participant’s termination of employment would
result in the imposition of additional tax under Section 409A, any Deferred Compensation Separation
Benefits that would otherwise be payable on or following the participant’s employment termination date
will instead be paid on the date that is six (6) months and one (1) day following the participant’s
employment termination date (or such longer period as is required to avoid the imposition of additional tax
under Section 409A), unless the participant dies following his or her employment termination, in which
case, the award under this Section 6.4 will be paid to such participant’s estate as soon as practicable
following his or her death and other Deferred Compensation Separation Benefits will be paid in accordance
with the payment schedule otherwise applicable to them. It is the intent of this Plan to comply with the
requirements of Section 409A so that none of the awards payable hereunder will be subject to the additional
tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. For purposes
of this Agreement, “Section 409A” means Section 409A of the U.S. Internal Revenue Code of 1986, as
amended, and any final Treasury Regulations and other Internal Revenue Service guidance thereunder, as
each may be amended from time to time.
7. Nonassignment. The interest of any participant in this Plan is not assignable either by voluntary or
involuntary assignment or operation of law (except that, in the event of death, earned and unpaid amounts shall
be payable to the legal successor of a participant).
8. Indemnification. No employee, member of the Committee or director of the Company will have any
liability for any decision or action if made or done in good faith, nor for any error or miscalculation unless such
error or miscalculation is the result of his or her fraud or deliberate disregard of any provisions of this Plan. The
Company will indemnify each director, member of the Committee and any employee acting in good faith
pursuant to the Plan against any loss or expense arising therefrom.
9. Amendment, Suspension or Termination. The Board may from time to time amend, suspend or
terminate, in whole or in part, any or all the provisions of this Plan; provided, however, that no such action shall
adversely affect the right of any participant with respect to any award of which he or she may have become
entitled to payment hereunder prior to the effective date of such amendment, suspension or termination. In
particular, but without limitation, the Board shall have the authority to amend or modify this Plan from time to
time in order to reflect amendments to or regulations promulgated under Section 162(m) of the Code.
Notwithstanding the foregoing, in the event that any amendment or other modification of or to this Plan raises the
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Exhibits