Pottery Barn 2012 Annual Report Download - page 136

We entered into an amended and restated management retention agreement with Ms. Alber on September 6,
2012. The management retention agreement restates substantially all of the material terms of the prior agreement,
with the exception of extending the term of the agreement through September 7, 2033. All other terms are
substantially the same as the management retention agreements entered into with each of Ms. Whalen,
Mr. Connolly and Ms. Stangl, as well as the EVP Retention Plan.
If within 18 months following a change of control, an executive’s employment is terminated by us without
“cause,” or by the executive for “good reason,” then (i) 100% of such executive’s outstanding equity awards,
including full value awards, with performance-based vesting where the payout is a set number or zero depending
on whether the performance metric is obtained, will immediately become fully vested, except that if a full value
award has performance-based vesting and the performance period has not been completed and the number of
shares that can be earned is variable based on the performance level, a pro-rata portion of such executive’s
outstanding equity awards will immediately become fully vested at the target performance level, and (ii) in lieu
of continued employment benefits (other than as required by law), such executive will be entitled to receive
payments of $3,000 per month for 12 months.
In addition, if, within 18 months following a change of control, the executive’s employment is terminated by us
without “cause,” or by the executive for “good reason,” such executive will be entitled to receive (i) severance
equal to 200% of such executive’s base salary as in effect immediately prior to the change of control or such
executive’s termination, whichever is greater, with such severance to be paid over 24 months, and (ii) 200% of
the average annual bonus received by such executive in the last 36 months prior to the termination, with such
severance to be paid over 24 months.
Each executive’s receipt of the severance benefits discussed above is contingent on such executive signing and
not revoking a release of claims against us, such executive’s continued compliance with our Code of Business
Conduct and Ethics (including its provisions relating to confidential information and non-solicitation), such
executive not accepting employment with one of our competitors, and such executive’s continued non-
disparagement of us. In the event that the severance payments and other benefits payable to an executive under a
retention agreement constitute a “parachute payment” under Section 280G of the U.S. tax code and would be
subject to the applicable excise tax, then the executive’s severance payments and other benefits will be either
(i) delivered in full or (ii) delivered to a lesser extent such that no portion of the benefits are subject to the excise
tax, whichever results in the receipt by such executive on an after-tax basis of the greatest amount of benefits.
For purposes of the management retention agreement, “cause” means: (i) an act of dishonesty made by the
executive in connection with his or her responsibilities as an employee; (ii) the executive’s conviction of, or plea
of nolo contendere to, a felony or any crime involving fraud, embezzlement or any other act of moral turpitude;
(iii) the executive’s gross misconduct; (iv) the executive’s unauthorized use or disclosure of any proprietary
information or trade secrets of the company or any other party to whom the executive owes an obligation of
nondisclosure as a result of the executive’s relationship with the company; (v) the executive’s willful breach of
any obligations under any written agreement or covenant with the company or breach of the company’s Code of
Business Conduct and Ethics; or (vi) the executive’s continued failure to perform his or her employment duties
after he or she has received a written demand of performance which specifically sets forth the factual basis for
the belief that the executive has not substantially performed his or her duties and has failed to cure such non-
performance within 30 days after receiving such notice.
For purposes of the management retention agreement, “change of control” means the occurrence of any of the
following events: (i) a change in the ownership of the company which occurs on the date that any one person, or
more than one person acting as a group (“Person”), acquires ownership of the stock of the company that, together
with the stock held by such Person, constitutes more than 50% of the total voting power of the stock of the
company; provided, however, that for purposes of this subsection (i), the acquisition of additional stock by any
one Person, who is considered to own more than 50% of the total voting power of the stock of the company will
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