Pottery Barn 2013 Annual Report Download - page 68

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Stock Fund. The profit sharing and ESOP components of the 401(k) Plan are considered a single plan under
Code section 414(l). Our contributions to the plan were $5,538,000, $5,517,000 and $4,862,000 in fiscal 2013,
fiscal 2012 and fiscal 2011, respectively.
We also have a nonqualified executive deferred compensation plan that provides supplemental retirement income
benefits for a select group of management and other certain highly compensated employees. In January 2010 all
employee salary and bonus deferrals into the plan were suspended, however, beginning January 2013 salary and
bonus deferrals were reinstated into the plan for all eligible employees. We have an unsecured obligation to pay
in the future the value of the deferred compensation adjusted to reflect the performance, whether positive or
negative, of selected investment measurement options, chosen by each participant, during the deferral period. As
of February 2, 2014 and February 3, 2013, $15,190,000 and $12,148,000, respectively, is included in other long-
term obligations related to these deferred compensation liabilities. Additionally, we have purchased life
insurance policies on certain participants to potentially offset these unsecured obligations. The cash surrender
value of these policies was $16,652,000 and $14,137,000 as of February 2, 2014 and February 3, 2013,
respectively, and is included in other assets, net.
Note J: Commitments and Contingencies
We are involved in lawsuits, claims and proceedings incident to the ordinary course of our business. These
disputes, which are not currently material, are increasing in number as our business expands and our company
grows larger. Litigation is inherently unpredictable. Any claims against us, whether meritorious or not, could be
time consuming, result in costly litigation, require significant amounts of management time and result in the
diversion of significant operational resources. The results of these lawsuits, claims and proceedings cannot be
predicted with certainty. However, we believe that the ultimate resolution of these current matters will not have a
material adverse effect on our Consolidated Financial Statements taken as a whole.
We are party to a variety of contractual agreements under which we may be obligated to indemnify the other
party for certain matters. These contracts primarily relate to our commercial contracts, operating leases,
trademarks, intellectual property, financial agreements and various other agreements. Under these contracts, we
may provide certain routine indemnifications relating to representations and warranties or personal injury
matters. The terms of these indemnifications range in duration and may not be explicitly defined. Historically, we
have not made significant payments for these indemnifications. We believe that if we were to incur a loss in any
of these matters, the loss would not have a material effect on our financial condition or results of operations.
Note K: Stock Repurchase Programs and Dividends
During fiscal 2013, we repurchased 4,344,962 shares of our common stock at an average cost of $55.07 per share
and a total cost of approximately $239,274,000 under our current $750,000,000 stock repurchase program. As of
February 2, 2014, we held treasury stock of $3,101,000 which represents the cost of shares available for issuance
in certain foreign jurisdictions as a result of future stock award exercises or releases.
During fiscal 2012, we repurchased 3,962,034 shares of our common stock at an average cost of $39.14 per share
and a total cost of approximately $155,080,000. During fiscal 2011, we repurchased 5,384,036 shares of our
common stock at an average cost of $36.11 per share and a total cost of approximately $194,429,000.
Stock repurchases under this program may be made through open market and privately negotiated transactions at
times and in such amounts as management deems appropriate. The timing and actual number of shares
repurchased will depend on a variety of factors including price, corporate and regulatory requirements, capital
availability and other market conditions. This stock repurchase program does not have an expiration date and
may be limited or terminated at any time without prior notice.
Dividends
In March 2014, we announced that our Board of Directors had authorized a 6% increase in our quarterly cash
dividend, from $0.31 to $0.33 per common share, subject to capital availability. Total cash dividends declared in
fiscal 2013, fiscal 2012 and fiscal 2011, were approximately $121,688,000, or $1.24 per common share,
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