Pottery Barn 2004 Annual Report Download - page 105

Download and view the complete annual report

Please find page 105 of the 2004 Pottery Barn annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 116

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116

CORPORATE GOVERNANCE GUIDELINES AND CORPORATE CODE OF CONDUCT
Our Corporate Governance Guidelines and our Corporate Code of Conduct, which applies to all of our
employees, including our Chief Executive Officer, Chief Financial Officer and Controller, are available on our
website at www.williams-sonomainc.com. Each is also available in print to any shareholder who requests it. To
date, there have been no waivers that apply to our Chief Executive Officer, Chief Financial Officer, Controller or
persons performing similar functions under our Corporate Code of Conduct. We intend to disclose any
amendment to, or waivers of, the provisions of our Corporate Code of Conduct that affect our Chief Executive
Officer, Chief Financial Officer, Controller or persons performing similar functions by posting such information
on our website at www.williams-sonomainc.com.
CERTIFICATIONS
The certification of the Chief Executive Officer required by the NYSE Listing Standards, Section 303A.12(a),
relating to our compliance with the NYSE Corporate Governance Listing Standards, was submitted to the NYSE
on June 7, 2004. The certifications of the Chief Executive Officer and Chief Financial Officer required by the
SEC in connection with our Annual Report on Form 10-K for the year ended February 1, 2004 were submitted to
the SEC on April 15, 2004 with our Annual Report on Form 10-K.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During fiscal 2004, we employed Kirk Lester as a financial analyst for special projects. Kirk Lester is the son of
our Chairman, W. Howard Lester. Kirk Lester earned $27,796 and received standard employee benefits for his
services during the year.
Our Memphis-based distribution facilities include an operating lease entered into in July 1983 for a distribution
facility in Memphis, Tennessee. The lessor is a general partnership (“Partnership 1”) comprised of W. Howard
Lester, Chairman of the Board of Directors and a significant shareholder, and James A. McMahan, a Director
Emeritus and a significant shareholder. Partnership 1 does not have operations separate from the leasing of this
distribution facility and does not have lease agreements with any unrelated third parties.
Partnership 1 financed the construction of this distribution facility through the sale of a total of $9,200,000 of
industrial development bonds in 1983 and 1985. Annual principal payments and monthly interest payments are
required through maturity in December 2010. The Partnership 1 industrial development bonds are collateralized
by the distribution facility and the individual partners guarantee the bond repayments. As of January 30, 2005,
$2,341,000 was outstanding under the Partnership 1 industrial development bonds.
The operating lease for this distribution facility requires us to pay annual rent of $618,000 plus interest on the
bonds calculated at a variable rate determined monthly (2.3% in January 2005), applicable taxes, insurance and
maintenance expenses. Although the current term of the lease expires in August 2005, we are obligated to renew
the operating lease until these bonds are fully repaid.
Our other Memphis-based distribution facility includes an operating lease entered into in August 1990 for
another distribution facility that is adjoined to the Partnership 1 facility in Memphis, Tennessee. The lessor is a
general partnership (“Partnership 2”) comprised of W. Howard Lester, James A. McMahan and two unrelated
parties. Partnership 2 does not have operations separate from the leasing of this distribution facility and does not
have lease agreements with any unrelated third parties.
Partnership 2 financed the construction of this distribution facility and related addition through the sale of a total
of $24,000,000 of industrial development bonds in 1990 and 1994. Quarterly interest and annual principal
payments are required through maturity in August 2015. The Partnership 2 industrial development bonds are
collateralized by the distribution facility and require us to maintain certain financial covenants. As of January 30,
2005, $14,659,000 was outstanding under the Partnership 2 industrial development bonds.
28