Pottery Barn 2012 Annual Report Download - page 128

None of the executive officers is provided with any type of golden parachute excise tax gross-up. In addition, our
equity compensation plans do not provide for automatic “single trigger” vesting acceleration upon or following a
change of control. We have considered the total potential cost of the change of control protection afforded to our
executive officers and have determined that it is reasonable given the importance of the objectives described
above.
Do our named executive officers have severance protection?
As described in the section titled “Employment Contracts and Termination of Employment and Change-of-
Control Arrangements” beginning on page 41, as of the last day of the company’s 2012 fiscal year, the company
had entered into a severance arrangement with Ms. Alber providing for certain severance benefits upon her
termination without cause or voluntary termination for good reason following a change of control. The company
had also previously entered into a severance arrangement with Ms. McCollam, who retired from the company
effective March 6, 2012, as described in the section titled “Employment Contracts and Termination of
Employment and Change-of-Control Arrangements—Sharon L. McCollam” beginning on page 45. The
Compensation Committee implemented these arrangements to ensure that these two senior executive focus on the
company’s goals and objectives, as well as the best interests of stockholders, rather than potential personal
economic exposure under these particular circumstances.
Grants of restricted stock units made in fiscal 2012 to company employees, including the restricted stock units
granted to the named executive officers, include an acceleration feature that provides for the full acceleration of
vesting of such awards in the event of a qualifying retirement, which is defined as leaving the company’s
employment at age 70 or later, with at least fifteen years of service.
Otherwise, except as described above, the named executive officers do not have arrangements that provide them
with specific benefits upon their termination. The Compensation Committee has considered the total potential
cost of the severance benefits to the executive officers and determined them to be reasonable.
Do we provide perquisites to the executive officers?
The company provides executive officers, including the named executive officers, with perquisites and other
personal benefits that the company and the Compensation Committee believe are reasonable and enable the
company to attract and retain superior employees for key positions. The company provides certain perquisites to
its named executive officers, including premiums for term life insurance in excess of $50,000, a matching
contribution for investments in our 401(k) plan up to $7,500 in any calendar year, and a $500 monthly car
allowance. Some of these perquisites are also provided to other employees.
In fiscal 2012, the Compensation Committee authorized and approved the reimbursement of expenses for
financial counseling services of up to $12,000 annually for certain executive officers, including each of the
named executive officers, other than Pat Connolly (who is eligible to receive such services commencing in fiscal
2013) and Ms. McCollam, who retired in March 2012. The financial counseling services may include services
related to financial planning, tax planning and preparation, and estate planning. The Compensation Committee
believes it is in the company’s best interest to provide senior executives with financial counseling services as an
effective executive retention tool. These executives have complex financial planning requirements that require
significant time and attention. The Committee believes that providing company-subsidized financial services will
give the executives appropriate support to plan for their financial security and maximize the net financial reward
to the executive from the company’s compensation and benefits programs. In addition, reducing the amount of
time and attention the executives may spend on these matters should enable the executives to devote more time to
the company’s business needs.
The value of all of these benefits to each of the named executive officers is detailed in the “Other Annual
Compensation from Summary Compensation Table” table on page 36. The Compensation Committee believes
these perquisites to be customary for comparable professionals in our industry with comparable management and
retail industry experience. There are no tax gross-ups to named executive officers on any imputed income
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