Pottery Barn 2011 Annual Report Download - page 131

For purposes of the employment agreement with Ms. McCollam, “cause” means (i) 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 (A) continued willful
neglect of her duties and responsibilities in her role with the company, (B) grossly negligent conduct in
connection with her duties and responsibilities in her role with the company; or (C) 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 of 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.
The following table describes the payments and/or benefits which would have been owed by us to Ms. McCollam
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) ........ $875,000 $875,000 $ 1,750,000 Through date of death $218,750(2)
Lump Sum Payment .... $700,000 $700,000 — — —
Bonus Payment(3) ..... — — $ 2,066,667 — —
Equity Awards(4) ...... — — $11,402,133 — —
Health Care Benefits . . . $ 8,244(5) $ 8,244(5) $ 36,000(6) — —
Other Perquisites ...... $150,000(7) $150,000(7) — — —
(1) Based on Ms. McCollam’s base salary as of January 29, 2012.
(2) Payment of 13 weeks of salary.
(3) Represents 200% of the average annual bonus received by Ms. McCollam in the 36 month period prior to
January 29, 2012.
(4) Represents the sum of (i) $8,741,333 for acceleration of vesting of 248,899 restricted stock units and
(ii) $2,660,800 for acceleration of vesting of 250,490 shares underlying outstanding option awards. Value is
35
Proxy