Pottery Barn 2014 Annual Report Download - page 154

applicable performance milestones are certified with such awards paid out, subject to the attainment of the
applicable performance milestones, to the same extent and at the same time as if Ms. Alber had remained
employed through the 18-month anniversary of her termination date. Ms. Alber’s receipt of the severance
benefits discussed above is contingent on her signing and not revoking a release of claims against us, her
continued compliance with our Code of Business Conduct and Ethics (including its provisions relating to
confidential information and non-solicitation), her not accepting employment with one of our competitors, and
her continued non-disparagement of us.
For purposes of the employment agreement with Ms. Alber, “cause” is defined as (i) an act of dishonesty made
by her in connection with her responsibilities as an employee, (ii) Ms. Alber’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) Ms. Alber’s gross misconduct, (iv) Ms. Alber’s unauthorized use or disclosure of any proprietary
information or trade secrets of the company or any other party to whom she owes an obligation of nondisclosure
as a result of her relationship with the company, (v) Ms. Alber’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) Ms. Alber’s continued failure to perform her employment duties after she has received a written
demand of performance from the Board which specifically sets forth the factual basis for the Board’s belief that
she has not substantially performed her duties and has failed to cure such non-performance to the company’s
satisfaction within 30 days after receiving such notice.
For purposes of the employment agreement with Ms. Alber, “disability” means Ms. Alber (i) is unable to engage
in any substantial gainful activity by reason of any medically determinable physical or mental impairment which
can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or
(ii) is, by reason of any medically determinable physical or mental impairment which can be expected to last for
a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less
than 3 months under an accident and health plan covering company employees.
For purposes of the employment agreement with Ms. Alber, “good reason” is defined as, without Ms. Alber’s
consent, (i) a reduction in her base salary (except pursuant to a reduction generally applicable to senior
executives of the company), (ii) a material diminution of her authority or responsibilities, (iii) a reduction of
Ms. Alber’s title, (iv) Ms. Alber ceasing to report directly to the Board of Directors, or (v) the Board of Directors
failing to re-nominate Ms. Alber for Board membership when her Board term expires while she is employed by
the company. In addition, upon any such voluntary termination for good reason, Ms. Alber must provide written
notice to the company of the existence of one or more of the above conditions within 90 days of its initial
existence and the company must be provided with at least 30 days to remedy the condition.
The following table describes the payments and/or benefits which would have been owed by us to Ms. Alber as
of February 1, 2015 if her employment had been terminated in various situations.
Compensation and Benefits
For Good
Reason
Involuntary
Without Cause
Change-of-
Control Death Disability
Base Salary(1) ............ $ 2,600,000 $ 2,600,000 $ 2,600,000 $ 2,600,000(2) $ 2,600,000(2)
Bonus Payment(3) ......... $ 5,933,333 $ 5,933,333 $ 5,933,333 $ 5,933,333(2) $ 5,933,333(2)
Equity Awards ............ $16,414,797(4) $16,414,797(4) $30,847,247(5) $16,414,797(4) $16,414,797(4)
Health Care Benefits(6) ..... $ 54,000 $ 54,000 $ 36,000 $ 54,000 $ 54,000
(1) Represents 200%, or 24 months, of Ms. Alber’s base salary as of February 1, 2015.
(2) Will be reduced by the amount of any payments Ms. Alber receives through company-paid insurance
policies.
(3) Represents 200% of the average annual bonus received by Ms. Alber in the 36-month period prior to
February 1, 2015.
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