Pottery Barn 2011 Annual Report Download - page 130

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 29, 2012 if her employment had been terminated in various situations.
Compensation and Benefits
For Good
Reason
Involuntary
Without Cause
Change-of-
Control Death Disability
Base Salary(1) ............ $ 2,400,000 $ 2,400,000 $ 2,400,000 $ 2,400,000(2) $ 2,400,000(2)
Bonus Payment(3) ......... $ 2,833,333 $ 2,833,333 $ 2,833,333 $ 2,833,333(2) $ 2,833,333(2)
Equity Awards ............ $12,405,448(4) $12,405,448(4) $15,443,866(5) $12,405,448(4) $12,405,448(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 29, 2012.
(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 36 month period prior to
January 29, 2012.
(4) Represents the sum of (i) $10,135,948 for acceleration of vesting of 288,609 restricted stock units and
(ii) $2,269,500 for acceleration of vesting of 260,593 shares underlying outstanding option awards. Value is
based on a stock price of $35.12, the closing price of our common stock on January 27, 2012, the last
business day of fiscal 2011.
(5) Represents the sum of (i) $12,804,366 for acceleration of vesting of 364,589 restricted stock units and
(ii) $2,639,500 for acceleration of vesting of 403,685 shares underlying outstanding option awards. Value is
based on a stock price of $35.12, the closing price of our common stock on January 27, 2012, the last
business day of fiscal 2011.
(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.
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. Effective March 6, 2012, she retired from her position as our Executive Vice
President, Chief Operating and Chief Financial Officer and is no longer covered by her employment agreement.
Prior to Ms. McCollam’s retirement, her agreement provided for (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, (ii) outplacement services at a level commensurate with her position at no cost to her, and (iii) payment of
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) in the event her employment was terminated by us without “cause” or if Ms. McCollam
terminated her employment with us for “good reason.” As described in the section titled “Compensation
Discussion and Analysis” beginning on page 38, we entered into a Separation Agreement and General Release
with Ms. McCollam under which she is entitled to receive these severance benefits, as well as certain other
benefits in connection with her retirement.
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