Pottery Barn 2014 Annual Report Download - page 113

Powers of the Committee
Subject to the terms of the plan and among other powers, the committee has the sole discretion to: (i) select the
employees and non-employee directors who will receive awards; (ii) determine the terms and conditions of
awards such as the exercise price and vesting schedule (see below for certain limitations); and (iii) interpret the
provisions of the plan and outstanding awards. Subject to limited exceptions, the committee may not reduce the
exercise price of stock options or stock appreciation rights that have been granted, including cancelling an
existing stock option or stock appreciation right having an exercise price that exceeds the fair market value of the
underlying stock in exchange for a new award (including a stock option or stock appreciation right), cash, other
consideration, or a combination thereof, without prior consent from our stockholders.
Eligibility to Receive Awards
The committee selects the employees and non-employee directors who will be granted awards under the plan
(our non-employee directors receive awards under the plan as compensation for Board service). The actual
number of employees and non-employee directors who will receive an award under the plan cannot be
determined in advance because the committee has the discretion to select the participants. As of March 30, 2015,
approximately 24,000 employees and eight non-employee directors were eligible to participate in the plan.
However, of our employees, our current policy is to grant equity awards generally to employees at the level of
director or above, as well as to certain company buyers. As of March 30, 2015, there were 678 such employees.
Limits on the Committee’s Ability to Vest and Accelerate Awards
The committee generally has the sole discretion to determine and/or modify the vesting provisions of each award.
However, awards of restricted stock, restricted stock units and deferred stock awards (together, these are called
“full value awards”) typically are subject to certain “minimum vesting requirements” under the plan. The
minimum vesting requirements generally require that grants of full value awards will vest in full no earlier than
three years from the award grant date if the award will vest based solely on continued service to us, and no earlier
than one year from the award grant date if the award will not vest based solely on continued service to us (or, for
awards granted to non-employee directors, the earlier of one year from the date of grant or the day before the
next regularly scheduled annual meeting).
Certain “Vesting Exceptions” to the minimum vesting requirements apply, however:
• The committee may grant full value awards resulting in the issuance of shares of up to 5% of the
maximum aggregate number of shares of stock authorized for issuance under the plan (the “5% Limit”) to
employees or non-employee directors without respect to the minimum vesting requirements in the plan.
Also, awards so granted to non-employee directors pursuant to a formula approved by the Board do not
count toward the 5% Limit and are not subject to the minimum vesting requirements.
• In addition, the committee’s ability to discretionarily accelerate the vesting of full value awards, and the
vesting in full of options and stock appreciation rights, is subject to the 5% Limit, except that the
committee may discretionarily accelerate awards without regard to the 5% Limit: (i) in connection with a
merger or similar transaction under the plan (including an additional or subsequent event, such as
termination following such a transaction); (ii) a participant’s death or disability; or (iii) a participant’s
retirement. The committee may accelerate the vesting of full value awards such that the minimum vesting
requirements still must be met, without such vesting acceleration counting toward the 5% Limit.
• The 5% Limit is considered one aggregate limit applying to the granting of full value awards to
employees or non-employee directors without respect to the plan’s minimum vesting requirements and to
the discretionary vesting acceleration of awards.
Award Eligibility for Non-Employee Directors
Non-employee directors are eligible for any of the awards available under the plan. In addition, our non-
employee directors will receive annual awards under the non-employee director award program portion of the
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