Pottery Barn 2010 Annual Report Download - page 155

(vi) Ms. Alber’s continued failure to perform her employment duties after she has received a written demand of
performance from the Board which specifically sets forth the factual basis for the Board’s belief that she has not
substantially performed her duties and has failed to cure such non-performance to the company’s satisfaction
within 30 days after receiving such notice.
For purposes of the employment agreement with Ms. Alber, “disability” means Ms. Alber (i) is unable to engage
in any substantial gainful activity by reason of any medically determinable physical or mental impairment which
can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or
(ii) is, by reason of any medically determinable physical or mental impairment which can be expected to last for
a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less
than 3 months under an accident and health plan covering company employees.
For purposes of the employment agreement with Ms. Alber, “good reason” is defined as, without Ms. Alber’s
consent, (i) a reduction in her base salary (except pursuant to a reduction generally applicable to senior
executives of the company), (ii) a material diminution of her authority or responsibilities, (iii) a reduction of
Ms. Alber’s title, (iv) Ms. Alber ceasing to report directly to the Board of Directors, or (v) the Board of Directors
failing to re-nominate Ms. Alber for Board membership when her Board term expires while she is employed by
the company. In addition, upon any such voluntary termination for good reason, Ms. Alber must provide written
notice to the company of the existence of one or more of the above conditions within 90 days of its initial
existence and the company must be provided with at least 30 days to remedy the condition.
The following table describes the payments and/or benefits which would have been owed by us to Ms. Alber as
of January 30, 2011 if her employment had been terminated in various situations.
Compensation and Benefits
For Good
Reason
Involuntary
Without Cause
Change-in-
Control Death Disability
Base Salary(1) ........... $1,950,000 $1,950,000 $ 1,950,000 $1,950,000(2) $1,950,000(2)
Bonus Payment(3) ........ $1,500,000 $1,500,000 $ 1,500,000 $1,500,000(2) $1,500,000(2)
Equity Awards ........... $7,695,753(4) $7,695,753(4) $13,298,405(5) $7,695,753(4) $7,695,753(4)
Health Care Benefits(6) .... $ 54,000 $ 54,000 $ 36,000 $ 54,000 $ 54,000
(1) Based on Ms. Alber’s base salary as of January 30, 2011.
(2) Will be reduced by the amount of any payments Ms. Alber receives through company-paid insurance
policies.
(3) Represents 200% of the average annual bonus received by Ms. Alber in the 24 month period prior to
January 30, 2011.
(4) Represents the sum of (i) $5,850,403 for acceleration of vesting of 180,903 restricted stock units and
(ii) $1,845,350 for acceleration of vesting of 185,500 shares underlying outstanding option awards. Value is
based on a stock price of $32.34, the closing price of our common stock on January 28, 2011, the last
business day of fiscal 2010.
(5) Represents the sum of (i) $9,623,705 for acceleration of vesting of 297,579 restricted stock units and
(ii) $3,674,700 for acceleration of vesting of 343,000 shares underlying outstanding option awards. Value is
based on a stock price of $32.34, the closing price of our common stock on January 28, 2011, the last
business day of fiscal 2010.
(6) Based on a monthly payment of $3,000 to be paid by the company for 18 months or 12 months, as
applicable, in lieu of continued employment benefits.
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