Restoration Hardware 2012 Annual Report Download - page 38

termination of employment occurs, to be paid at the same time and in the same form as Mr. Alberini’s annual
bonus would otherwise be paid, (e) subject to his timely election under COBRA, continuation of medical benefits
for 24 months following the termination date, subject to Mr. Alberini’s payment of applicable premiums at the
same rate that would have been applied had he remained an executive officer of our Company, paid for by us to
the same extent that we paid for his health insurance prior to termination. In addition, Mr. Alberini’s vested
shares and options that are subject to performance-based vesting or selling restrictions will remain outstanding
for two years following the date of termination (during which time the selling restrictions may lapse or vesting
may occur in accordance with their terms). To the extent such shares remain unvested after two years, they will
be forfeited. To the extent the selling restrictions remain unlapsed after two years, the shares will be subject to
repurchase by us, at the then fair market value. Any unvested time-based equity awards and any selling
restrictions applicable to vested time-based equity awards that Mr. Alberini may hold will accelerate as to the
number of shares or options that would have vested and the selling restrictions that would have lapsed during the
three-year period following the date of termination.
Mr. Alberini agreed that, during his employment with us, he will not directly or indirectly work for or
engage or invest in any competitor. Mr. Alberini also agreed that, during his employment with us and the two
years following his employment, he will not solicit, directly or through any third party, any business from any of
our material customers or suppliers or, as specified in the employment agreement, encourage any of our
customers or suppliers to reduce their business or contractual relationship with us.
Karen Boone
In connection with our initial public offering, we entered into an employment agreement with Ms. Boone,
our Chief Financial Officer. Ms. Boone’s employment agreement provides for an annual base salary of $475,000.
Pursuant to her offer letter, Ms. Boone received a $40,000 signing bonus. Ms. Boone is eligible for annual bonus
compensation targeted at 50% of her annual base salary, and received a one-time cash bonus of $100,000 upon
consummation of our initial public offering. Pursuant to the employment agreement, Ms. Boone also received
options to purchase 230,000 shares of our common stock under the 2012 Stock Incentive Plan.
If Ms. Boone’s employment is terminated by us without cause (as defined in the agreement), or by
Ms. Boone for good reason (as defined in the agreement), she is entitled to: (a) all accrued salary and vacation
pay through the termination date; (b) any earned and unpaid portion of her annual bonus; (c) severance
payments equal to (i) 18 months base salary, less withholdings, paid on our regular payroll schedule over the
18 months following the termination date, if terminated within one year of the consummation of our initial public
offering, or (ii) 12 months base salary, less withholdings, paid on our regular payroll schedule over the
12 months following the termination date, if terminated more than one year after the consummation of our initial
public offering; and (d) subject to Ms. Boone’s timely election under COBRA and Ms. Boone’s payment of
applicable premiums at the same rate that would have been applied had she remained an executive officer of our
Company, paid for by us to the same extent that we paid for her health insurance prior to termination,
continuation of medical benefits for (i) 18 months following the termination date, if terminated within one year
of the consummation of our initial public offering, or (ii) 12 months following the termination date, if terminated
more than one year after the consummation of our initial public offering.
Ms. Boone agreed that during her employment with us, she will not directly or indirectly work for or engage
or invest in any competitor. She also agreed that during her employment with us and the 18 months or 12 months,
as the case may be (based upon whether the severance payments are paid over 18 months or 12 months, as
described above), following her employment, she will not solicit, directly or through any third party any business
from any of our material customers or suppliers or encourage any of our customers or suppliers to reduce their
business or contractual relationship with us.
Ken Dunaj
We have entered into an employment agreement with Mr. Dunaj, our Chief Operating Officer. Mr. Dunaj’s
employment agreement, as amended, provides that if his employment is terminated by us other than for cause (as
30