Pottery Barn 2010 Annual Report Download - page 156

Sharon L. McCollam
We entered into an employment agreement with Sharon L. McCollam, effective as of December 28, 2002 and
amended as of November 11, 2008. She is currently our Executive Vice President, Chief Operating and Chief
Financial Officer. The initial term of Ms. McCollam’s agreement expired December 28, 2005, and, per its terms,
automatically extends for one-year terms until Ms. McCollam’s employment is terminated by her or by us. If we
terminate Ms. McCollam’s employment without “cause,” or if Ms. McCollam terminates her employment with
us for “good reason,” she will be entitled to receive (i) continuation of her base salary at the time of termination
for a period of one year plus an additional lump sum amount equal to 80% of Ms. McCollam’s base salary and
(ii) outplacement services at a level commensurate with her position at no cost to her. In addition, we will pay the
premiums for health care coverage under COBRA for Ms. McCollam and her dependents for up to 18 months or,
if earlier, until she either commences new employment or she and her dependents are no longer eligible for
COBRA coverage.
For purposes of the employment agreement with Ms. McCollam, “cause” means the conviction (or plea of guilty or
nolo contendere) of Ms. McCollam of any felony, or of any crime involving fraud, dishonesty or misappropriation,
or moral turpitude or, if any of the foregoing involves the company or any subsidiary or affiliate companies
(collectively the “Control Group”), the commission of any of the foregoing (other than good faith disputes involving
expense account items or de minimus issues); (ii) Ms. McCollam’s (X) continued willful neglect of her duties and
responsibilities in her role with the company, (Y) grossly negligent conduct in connection with her duties and
responsibilities in her role with the company; or (Z) gross negligence in connection with her handling of the assets
of the Control Group; (iii) Ms. McCollam’s willful misconduct with regard to the Control Group;
(iv) Ms. McCollam’s willful failure to comply with the covenants in her employment agreement; or (v) material
breach of any of the provisions of the employment agreement by Ms. McCollam.
For purposes of the employment agreement with Ms. McCollam, “good reason” means in the event that the
company shall (i) fail to continue the appointment of Ms. McCollam in her role with the company, (ii) reduce
Ms. McCollam’s annual salary below her current base salary, (iii) locate Ms. McCollam other than at the
company’s principal executive offices, (iv) relocate the company’s principal executive offices outside the San
Francisco metropolitan area, (v) substantially change the responsibilities assigned to Ms. McCollam’s position,
or (vi) breach any material provision of the employment agreement (each of the foregoing hereinafter referred to
as a “Triggering Event”), then Ms. McCollam may give notice to the company of her election to terminate her
employment with the company pursuant to this provision, effective 30 days from the date of such notice, unless
the company shall have cured within such 30-day period the default giving rise to her notice of election to
terminate. Such notice from Ms. McCollam shall state the Triggering Event which provides the grounds for her
termination, and such notice must be given, if at all, within 90 days of the date Ms. McCollam obtains knowledge
of the Triggering Event referred to as providing such grounds for termination. Within the 30 day period specified
in her notice to the company, the company shall have the opportunity to cure the default involved in the
Triggering Event specified by Ms. McCollam. If Ms. McCollam’s employment is terminated pursuant to this
provision, the company shall have no liability or further obligation hereunder except as provided in the
agreement. If Ms. McCollam does not give notice to the company of her election to terminate within 90 days
following the occurrence of a Triggering Event, then she shall be deemed to have waived her right to terminate
her employment based on such Triggering Event, but such waiver shall not prejudice her right to terminate
pursuant to this provision based on the occurrence of another Triggering Event occurring subsequent in time,
whether of the same or a different type.
60