Pottery Barn 2011 Annual Report Download - page 167

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
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Exhibits