Pottery Barn 2010 Annual Report Download

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ANNUAL MEETING OF SHAREHOLDERS
May 25, 2011
201 0 ANNUAL REPORT

Table of contents

  • Page 1
    201 0 ANNUAL REPORT ANNUAL MEETING OF SHAREHOLDERS May 2 5 , 2011

  • Page 2

  • Page 3
    Shareholders Letters LETTERS TO SHAREHOLDERS WILLIAMS-SONOMA, INC. 2010 ANNUAL REPORT

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  • Page 5
    ...of our company's strategies, as well as the quality of our associates and their executive leadership. In fiscal 2010, our net revenues increased 13% to $3.5 billion, and our diluted earnings per share increased to $1.83 from $0.72 in fiscal 2009. These strong earnings allowed us to end the year with...

  • Page 6
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  • Page 7
    ...I believe the company is poised for even greater success in fiscal 2011 and beyond. From our humble beginning over 50 years ago, our mission has been to enhance the quality of our customers' lives at home. From the day our founder, Chuck Williams, opened his first store in Sonoma, California in 1956...

  • Page 8
    ...each of our brands, through international expansion and through new business development. Each of our core brands has a strategy to drive growth through improved product offerings, a superior on-line shopping experience, and high quality service. The mission of our Williams-Sonoma brand is to be the...

  • Page 9
    ...him. I personally treasure the time I had working with him and I know I am a better leader for our associates because of it. In closing, thank you to all the associates of Williams-Sonoma, Inc., our shareholders, our customers, our vendors and partners throughout the world for helping make 2010 such...

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  • Page 11
    Form 10-K FORM 10-K WILLIAMS-SONOMA, INC. 2010 ANNUAL REPORT

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  • Page 13
    ... persons as of August 1, 2010 listed as executive officers and directors with the Securities and Exchange Commission. This aggregate market value includes all shares held in the registrant's Williams-Sonoma, Inc. Stock Fund. As of March 28, 2011, 104,980,876 shares of the registrant's common stock...

  • Page 14
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  • Page 15
    ...-Sonoma brand; statements related to our belief that our direct-mail catalogs and the Internet act as a cost-efficient means of testing market acceptance of new products and new brands; statements related to decreasing retail leased square footage in fiscal 2011; statements related to customers...

  • Page 16
    ...Market Risk Item 8. Financial Statements and Supplementary Data Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Item 9A. Controls and Procedures Item 9B. Other Information Item 10. Item 11. Item 12. Item 13. Item 14. Item 15. PART III Directors, Executive...

  • Page 17
    ... a specialty retailer of products for the home. The direct-to-customer segment of our business sells our products through our six direct-mail catalogs (Williams-Sonoma, Pottery Barn, Pottery Barn Kids, Pottery Barn Bed and Bath, PBteen, and West Elm) and six e-commerce websites (williams-sonoma.com...

  • Page 18
    ...store were opened in Kuwait in fiscal 2010. DIRECT-TO-CUSTOMER OPERATIONS As of January 30, 2011, the direct-to-customer segment has six merchandising concepts (Williams-Sonoma, Pottery Barn, Pottery Barn Kids, PBteen, West Elm and Williams-Sonoma Home) and sells products through our six direct-mail...

  • Page 19
    ... stores, discount retailers, other specialty retailers offering home-centered assortments, other mail order catalogs and other e-commerce websites. The substantial sales growth in the direct-to-customer industry within the last decade, particularly in e-commerce, has encouraged the entry of many new...

  • Page 20
    ... other information regarding Williams-Sonoma, Inc. and other companies that file materials with the SEC electronically. Our annual reports, Forms 10-K, Forms 10-Q, Forms 8-K and proxy and information statements are also available, free of charge, on our website at www.williams-sonomainc.com. ITEM 1A...

  • Page 21
    ... brands or products similar to ours. The specialty direct-to-customer and retail business is highly competitive. Our e-commerce websites, direct mail catalogs and specialty retail stores compete with other e-commerce websites, other direct mail catalogs and other retail stores that market lines of...

  • Page 22
    ... market segments; developing innovative, high-quality products in colors and styles that appeal to consumers of varying age groups and tastes, and in ways that favorably distinguish us from our competitors; and effectively managing our supply chain and distribution strategies in order to provide...

  • Page 23
    ... our net revenues have been generated by our retail stores. Our ability to open additional stores or close existing stores successfully will depend upon a number of factors, including general economic conditions; our identification of, and the availability of, suitable store locations; our success...

  • Page 24
    ... vulnerable to natural disasters and other unexpected events, any of which could result in an interruption in our business and harm our operating results. Our retail stores, corporate offices, distribution centers, infrastructure projects and direct-to-customer operations, as well as the operations...

  • Page 25
    ... the market price of our common stock. Various factors affect comparable store sales, including the number, size and location of stores we open, close, remodel or expand in any period, the overall economic and general retail sales environment, consumer preferences and buying trends, changes in sales...

  • Page 26
    ...reduce the market price of our common stock. Our failure to successfully anticipate merchandise returns might have a negative impact on our business. We record a reserve for merchandise returns based on historical return trends together with current product sales performance in each reporting period...

  • Page 27
    ..., all of our Williams-Sonoma Home retail stores have been permanently closed and, in fiscal 2011, it is our intent to market those Williams-Sonoma Home merchandising categories that support our bridal registry, expanded flagship and designer assortments through the Williams-Sonoma kitchen brand. Our...

  • Page 28
    ..., furniture manufacturing, furniture delivery to our customers and the management of our international vendors, each of which were previously outsourced to third party providers. This may cause disruptions in our business and result in increased cost to us. In addition, if we are unable to perform...

  • Page 29
    ... other public filings and public statements. Our actual results may not always be in line with or exceed the guidance we have provided, especially in times of economic uncertainty. In the past, when we have reduced our previously provided guidance, the market price of our common stock has declined...

  • Page 30
    ...finance future growth opportunities, new product development initiatives and unanticipated capital expenditures. Further, our Board of Directors may, at its discretion, decrease the intended level of dividends or entirely discontinue the payment of dividends at any time. The stock repurchase program...

  • Page 31
    ... of revenue. A significant portion of our customer orders are placed through our e-commerce websites or through our customer care centers. In addition, a significant portion of sales made through our retail channel require the collection of certain customer data, such as credit card information. In...

  • Page 32
    ... of living expenses in our market. ITEM 1B. UNRESOLVED STAFF COMMENTS None. ITEM 2. PROPERTIES We lease store locations, distribution centers, customer care centers and corporate facilities for original terms ranging generally from 2 to 22 years. Certain leases contain renewal options for periods...

  • Page 33
    ... feet of excess office space in San Francisco, California at the expiration of our lease. During the fourth quarter of fiscal 2010, we leased an additional 15,000 square feet of office space in New York City, New York associated with our West Elm headquarters and extended the term of the agreement...

  • Page 34
    ... the ordinary course of our business. These disputes are not currently material. 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...

  • Page 35
    ...61 $ 7.55 The closing price of our common stock on the NYSE on March 28, 2011 was $39.03. See Quarterly Financial Information on page 65 of this Annual Report on Form 10-K for the quarter-end closing price of our common stock for each quarter listed above. SHAREHOLDERS The number of shareholders of...

  • Page 36
    ... listed below assumed an initial investment of $100 and reinvestment of dividends. The graph shows historical stock price performance, including reinvestment of dividends, and is not necessarily indicative of future performance. COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN* Among Williams-Sonoma...

  • Page 37
    ... 30, 2011 Total Total Number of Shares Purchased 395,105 390,349 505,184 1,290,638 Average Price Paid per Share $34.35 $34.77 $33.93 $34.31 In January 2011, our Board of Directors authorized a new stock repurchase program to purchase up to $125,000,000 of our common stock through open market and...

  • Page 38
    ... Retail Revenues Retail revenue growth (decline) Retail revenues as a percent of net revenues Comparable store sales growth (decline)2 Store count Williams-Sonoma Pottery Barn Pottery Barn Kids West Elm Williams-Sonoma Home Outlets Number of stores at year-end Store selling area at fiscal year-end...

  • Page 39
    ...net revenues during fiscal 2010 were driven by the Pottery Barn, West Elm and Williams-Sonoma brands. In our core brands, net revenues increased 12.3% compared to fiscal 2009 led by growth in the Pottery Barn brand. Sales trends improved in every concept and we saw significant growth in new customer...

  • Page 40
    ... retail stores by reinventing the customer experience; and continue to expand e-commerce. E-commerce is not only our fastest growing but also our most profitable channel and, therefore, its growth as a percentage of total company revenues increases overall corporate profitability. In 2011, Internet...

  • Page 41
    ... comparable store sales, partially offset by a 4.1% year-over-year reduction in retail leased square footage, including 18 net fewer stores. Increased net revenues during fiscal 2010 were driven by the Pottery Barn, Pottery Barn Kids, West Elm and Williams-Sonoma brands. Net revenues in fiscal 2009...

  • Page 42
    ... 2009. This increase was driven by growth of 9.8% in comparable store sales, partially offset by a 4.1% year-over-year reduction in retail leased square footage, including 18 net fewer stores. Increased net revenues during fiscal 2010 were driven by the Pottery Barn, West Elm and Williams-Sonoma...

  • Page 43
    ... of new merchandise and promotional events, the success of marketing programs, the cannibalization of existing store sales by our new stores, the benefits of closing underperforming stores in multi-store markets, changes in catalog circulation and in our direct-to-customer business and fluctuations...

  • Page 44
    ... costs associated with our retail stores, distribution warehouses, customer care centers, supply chain operations (buying, receiving and inspection), and corporate administrative functions. These costs include employment, advertising, third party credit card processing and other general expenses. We...

  • Page 45
    ... of total company net revenues being generated year-over-year in the direct-to-customer channel. This decrease was partially offset by expense associated with the retirement of our former Chairman and Chief Executive Officer in fiscal 2010. In the direct-to-customer channel, selling, general and...

  • Page 46
    ... to our inventory reduction initiatives throughout fiscal 2009, an increase in income taxes payable resulting from an increase in earnings, as well as an increase in accounts payable and accrued salaries, benefits and other expenses due to the timing of expenditures. Net cash provided by operating...

  • Page 47
    ... development bonds, partially offset by net proceeds from the exercise of stock-based awards during fiscal 2009. Dividend Policy See section titled Dividend Policy within Part II, Item 5 of this Annual Report on Form 10-K for further information. Stock Repurchase Program See section titled Stock...

  • Page 48
    ...Leases We lease store locations, distribution centers, customer care centers, corporate facilities and certain equipment for original terms ranging generally from 2 to 22 years. Certain leases contain renewal options for periods up to 20 years. The rental payment requirements in our store leases are...

  • Page 49
    ... facility. As of January 30, 2011, we were in compliance with our financial covenants under the credit facility and, based on current projections, expect to be in compliance throughout fiscal 2011. The credit facility matures on September 23, 2015, at which time all outstanding borrowings must be...

  • Page 50
    ... financial covenants. As of January 30, 2011, $8,338,000 was outstanding under the Partnership 2 industrial development bonds. We made annual rental payments of approximately $2,567,000, $2,582,000 and $2,577,000 plus applicable taxes, insurance and maintenance expenses in fiscal 2010, fiscal 2009...

  • Page 51
    ... 30, 2011 and January 31, 2010, our inventory obsolescence reserves were $12,348,000 and $18,565,000, respectively. Advertising and Prepaid Catalog Expenses Advertising expenses consist of media and production costs related to catalog mailings, e-commerce advertising and other direct marketing...

  • Page 52
    ... retail stores of $5,128,000, $28,941,000 and $33,995,000 in selling, general and administrative expenses in fiscal 2010, fiscal 2009 and fiscal 2008, respectively. Self-Insured Liabilities We are primarily self-insured for workers' compensation, employee health benefits and product and general...

  • Page 53
    ... of compensation expense related to performance-based stock awards, see Note H to our Consolidated Financial Statements), in fiscal 2010, fiscal 2009 and fiscal 2008, respectively, and is recorded as a component of selling, general and administrative expenses. Income Taxes Income taxes are accounted...

  • Page 54
    ... costs may have on our financial statements or results of operations. In addition, as of January 30, 2011, we have 16 retail stores in Canada and limited operations in Europe and Asia, each of which exposes us to market risk associated with foreign currency exchange rate fluctuations. Although these...

  • Page 55
    ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Williams-Sonoma, Inc. Consolidated Statements of Earnings Fiscal Year Ended Dollars and shares in thousands, except per share amounts Net revenues Cost of goods sold Gross margin Selling, general and administrative expenses Interest (income) ...

  • Page 56
    Williams-Sonoma, Inc. Consolidated Balance Sheets Dollars and shares in thousands, except per share amounts ASSETS Current assets Cash and cash equivalents Restricted cash Accounts receivable, net Merchandise inventories, net Prepaid catalog expenses Prepaid expenses Deferred income taxes Other ...

  • Page 57
    ... Exercise of stock-based awards and related tax effect Conversion/release of stock-based awards Repurchase and retirement of common stock Stock-based compensation expense Dividends declared Comprehensive income Balance at January 30, 2011 See Notes to Consolidated Financial Statements. Shares 105...

  • Page 58
    ... Deferred income taxes Tax benefit from exercise of stock-based awards Stock-based compensation expense Other Changes in: Accounts receivable Merchandise inventories Prepaid catalog expenses Prepaid expenses and other assets Accounts payable Accrued salaries, benefits and other current and long-term...

  • Page 59
    ... Policies We are a specialty retailer of products for the home. The direct-to-customer segment of our business sells our products through our six direct-mail catalogs (Williams-Sonoma, Pottery Barn, Pottery Barn Kids, Pottery Barn Bed and Bath, PBteen and West Elm) and six e-commerce websites...

  • Page 60
    ... 30, 2011 and January 31, 2010, our inventory obsolescence reserves were $12,348,000 and $18,565,000, respectively. Advertising and Prepaid Catalog Expenses Advertising expenses consist of media and production costs related to catalog mailings, e-commerce advertising and other direct marketing...

  • Page 61
    ...' compensation and product and general liability claims were $19,122,000 and $20,111,000 as of January 30, 2011 and January 31, 2010, respectively, and are recorded within accrued salaries, benefits and other. Customer Deposits Customer deposits are primarily comprised of unredeemed gift cards, gift...

  • Page 62
    ... costs associated with our retail stores, distribution warehouses, customer care centers, supply chain operations (buying, receiving and inspection) and corporate administrative functions. These costs include employment, advertising, third party credit card processing and other general expenses. 48

  • Page 63
    ... financial statements for all stock-based awards using a fair value method. For stock options and stock-settled stock appreciation rights ("option awards"), fair value is determined using the Black-Scholes valuation model, while restricted stock units are valued using the closing price of our stock...

  • Page 64
    ... management and order management system currently under development. Construction in progress is primarily comprised of leasehold improvements and furniture and fixtures related to new, expanded or remodeled retail stores where construction had not been completed as of year-end. During fiscal 2010...

  • Page 65
    ... facility. As of January 30, 2011, we were in compliance with our financial covenants under the credit facility and, based on current projections, expect to be in compliance throughout fiscal 2011. The credit facility matures on September 23, 2015, at which time all outstanding borrowings must be...

  • Page 66
    ...Ended Dollars in thousands United States Foreign Total earnings before income taxes The provision for income taxes consists of the following: Fiscal Year Ended Dollars in thousands Current Federal State Foreign Total current Deferred Federal State Foreign Total deferred Total provision Jan. 30, 2011...

  • Page 67
    ... tax accounts are as follows: Dollars in thousands Current: Compensation Merchandise inventories Accrued liabilities Customer deposits Prepaid catalog expenses Other Total current Non-current: Depreciation Deferred rent Deferred lease incentives Stock-based compensation Executive deferral plan...

  • Page 68
    ... leases was as follows: Fiscal Year Ended Dollars in thousands Rent expense Contingent rent expense Rent expense before deferred lease incentive income Deferred lease incentive income Less: sublease rental income Total rent expense1 1 Jan. 30, 2011 Jan. 31, 2010 Feb. 1, 2009 $185,979 $189,404 $192...

  • Page 69
    ... financial covenants. As of January 30, 2011, $8,338,000 was outstanding under the Partnership 2 industrial development bonds. We made annual rental payments of approximately $2,567,000, $2,582,000 and $2,577,000 plus applicable taxes, insurance and maintenance expenses in fiscal 2010, fiscal 2009...

  • Page 70
    ... officers, employees and non-employee Board members of the company or any parent or subsidiary. Annual grants are limited to 1,000,000 shares covered by option awards and 400,000 shares covered by stock awards on a per person basis. All grants of option awards made under the Plan have a maximum term...

  • Page 71
    ... fair market value of our common stock between the date the award was granted and the conversion date for the number of shares vested. The following table summarizes our stock-settled stock appreciation right activity during fiscal 2010: Weighted Average Weighted Average Conversion Contractual Term...

  • Page 72
    ... and unvested restricted stock units is defined as the market value on the last business day of the fiscal year (or $32.34). For released restricted stock units, the intrinsic value is defined as the market value on the date of release. Tax Effect We present tax benefits resulting from the...

  • Page 73
    ... in fiscal 2010, fiscal 2009 and fiscal 2008, 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. As of January 1, 2010, we indefinitely...

  • Page 74
    ... 2010. In January 2011, our Board of Directors authorized a new stock repurchase program to purchase up to $125,000,000 of our common stock through open market and privately negotiated transactions, at times and in such amounts as management deems appropriate. The timing and actual number of shares...

  • Page 75
    ... 30, 2011, we have two reportable segments, direct-to-customer and retail. The direct-to-customer segment has six merchandising concepts (Williams-Sonoma, Pottery Barn, Pottery Barn Kids, PBteen, West Elm and Williams-Sonoma Home) and sells our products through our six direct mail catalogs (Williams...

  • Page 76
    ... benefit of $0.4 million in fiscal 2010 and expense of $7.6 million in fiscal 2009 related to the exit of excess distribution capacity. Unallocated costs before income taxes include $4.3 million in fiscal 2010 related to the retirement of our former Chairman of the Board and Chief Executive Officer...

  • Page 77
    ... internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide...

  • Page 78
    January 30, 2011, based on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. /s/ DELOITTE & TOUCHE LLP San Francisco, California March 31, 2011 64

  • Page 79
    ... stock price at the close of business on the Friday before our fiscal quarter-end. Includes a benefit of $1.9 million representing Visa/MasterCard litigation settlement income in the fourth quarter of fiscal 2009. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL...

  • Page 80
    ...management concluded that, as of January 30, 2011, our internal control over financial reporting is effective. Our independent registered public accounting firm audited the financial statements included in this Annual Report on Form 10-K and has issued an attestation report on the Company's internal...

  • Page 81
    ... to information under the headings "Election of Directors," "Information Concerning Executive Officers," "Compensation Discussion and Analysis," and "Committee Reports-Compensation Committee Report" in our Proxy Statement. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND...

  • Page 82
    ... of Cash Flows for the fiscal years ended January 30, 2011, January 31, 2010 and February 1, 2009 Notes to Consolidated Financial Statements Report of Independent Registered Public Accounting Firm Quarterly Financial Information (a)(2) Financial Statement Schedules: Schedules have been omitted...

  • Page 83
    ... by the undersigned, thereunto duly authorized. WILLIAMS-SONOMA, INC. Date: March 31, 2011 By /s/ LAURA J. ALBER Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in...

  • Page 84
    EXHIBIT INDEX TO ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED JANUARY 30, 2011 EXHIBIT NUMBER EXHIBIT DESCRIPTION ARTICLES OF INCORPORATION AND BYLAWS 3.1 Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the ...

  • Page 85
    ... to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the period ended November 1, 2009 as filed with the Commission on December 12, 2009, File No. 001-14077) Seventh Amendment, dated as of September 3, 2010, to the Reimbursement Agreement between the Company and Bank of America...

  • Page 86
    ... to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the period ended November 1, 2009 as filed with the Commission on December 11, 2009, File No. 001-14077) Sixth Amendment, dated as of September 3, 2010, to the Reimbursement Agreement between the Company and Wells Fargo Bank...

  • Page 87
    ... 10, 2010, File No. 001-14077) 10.23 10.24 Form 10-K 10.25 10.26 10.27 10.28 10.29 STOCK PLANS 10.30+ Williams-Sonoma, Inc. Amended and Restated 1993 Stock Option Plan (incorporated by reference to Exhibit 10.12 to the Company's Annual Report on Form 10-K for the fiscal year ended January...

  • Page 88
    ... for Employee Grants (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Commission on March 22, 2010, File No. 001-14077) Form of Williams-Sonoma, Inc. 2001 Long-Term Incentive Plan Stock-Settled Stock Appreciation Right Award Agreement for Director...

  • Page 89
    ... by reference to Exhibit 10.40 to the Company's Annual Report on Form 10-K for the fiscal year ended February 1, 2009 as filed with the Commission on April 2, 2009, File No. 001-14077) Williams-Sonoma, Inc. Executive Deferred Compensation Plan (incorporated by reference to Exhibit 10.41 to...

  • Page 90
    ...'s Annual Report on Form 10-K for the fiscal year ended February 3, 2002 as filed with the Commission on April 29, 2002, File No. 001-14077) Memorandum of Understanding between the Company and the State of Mississippi, Mississippi Business Finance Corporation, Desoto County, Mississippi, the City of...

  • Page 91
    ... the Company's Annual Report on Form 10-K for the fiscal year ended February 1, 2009 as filed with the Commission on April 2, 2009, File No. 001-14077) Management Retention Agreement with Sharon McCollam, dated June 11, 2010 (incorporated by reference to Exhibit 10.3 to the Company's Current Report...

  • Page 92
    ... Consent of Independent Registered Public Accounting Firm XBRL 101.INS** 101.SCH** 101.CAL** 101.DEF** 101.LAB** 101.PRE** * + ** Filed herewith. Indicates a management contract or compensatory plan or arrangement. XBRL (Extensible Business Reporting Language) information is furnished and not...

  • Page 93
    Notice of 2011 Annual Meeting of Shareholders PROXY STATEMENT Proxy WILLIAMS-SONOMA, INC. 2010 ANNUAL REPORT

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  • Page 95
    ... this notice, the Proxy Statement and the Annual Report are first being mailed to shareholders and posted on our website on or about April 7, 2011. By Order of the Board of Directors Seth R. Jaffe Secretary YOUR VOTE IS IMPORTANT Instructions for submitting your proxy are provided in the Notice of...

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  • Page 97
    3250 Van Ness Avenue San Francisco, California 94109 www.williams-sonomainc.com PROXY STATEMENT FOR THE 2011 ANNUAL MEETING OF SHAREHOLDERS GENERAL INFORMATION Our Board of Directors is soliciting your proxy to vote your shares at our 2011 Annual Meeting of Shareholders, to be held on Wednesday, ...

  • Page 98
    ... card directly to the company, but do not provide voting instructions? If a signed proxy card is returned to us without any indication of how your shares should be voted, votes will be cast "FOR" the election of the directors named in this Proxy Statement, "FOR" the reincorporation from California...

  • Page 99
    .... What is a broker non-vote? The term broker non-vote refers to shares that are held of record by a broker for the benefit of the broker's clients but that are not voted at the Annual Meeting on certain non-routine matters set forth in New York Stock Exchange, or NYSE, Rule 402.08(B) because the...

  • Page 100
    ...and will publicly disclose its decision with respect to the director's resignation offer (and the reasons for rejecting the resignation offer, if applicable). Any director who tenders his or her resignation pursuant to the majority voting policy shall not participate in the Nominations and Corporate...

  • Page 101
    ... into consideration when making future decisions regarding executive compensation. For Proposal 5, the frequency of the advisory vote on compensation of our named executive officers - every year, every two years or every three years - receiving the highest number of votes at the Annual Meeting will...

  • Page 102
    ... shareholder would like a separate Notice or Annual Report and Proxy Statement by phone at 415-421-7900 or by mail at the following mailing address: Williams-Sonoma, Inc., Attention: Annual Report Administrator, 3250 Van Ness Avenue, San Francisco, California 94109. If we receive such notification...

  • Page 103
    ... written communications to the Board or to any of our directors individually, including non-management directors and the Chairman of the Board, at the following address: Williams-Sonoma, Inc., Attention: Corporate Secretary, 3250 Van Ness Avenue, San Francisco, California 94109. All communications...

  • Page 104
    ... closing price of our common stock on the trading day prior to the grant date, rounding down to the nearest whole share. Value of Annual Compensation Initial Election to the Board ...Annual Compensation for Board Service(1) ...Annual Compensation to Chairman of the Board(1) ...Annual Compensation...

  • Page 105
    ... table, by the closing price of our common stock on the trading day prior to the grant date, rounding down to the nearest whole share. Represents the fair market value associated with a restricted stock unit award of 8,747 shares of common stock made on May 26, 2010, with a fair value as of the...

  • Page 106
    ... structure with current trends in corporate governance best practices. Our Chief Executive Officer is responsible for day-to-day leadership and for setting the strategic direction of the company, while the Chairman of the Board provides independent oversight and advice to our management team, as...

  • Page 107
    ...Chief Executive Officer does not serve on the board of directors of any other company. Were any incumbent directors not elected at the 2010 Annual Meeting? No. All of the incumbent directors were elected at the 2010 Annual Meeting. Are any incumbent directors not standing for re-election at the 2011...

  • Page 108
    ...Executive Vice President, General Manager, Catalog, 1995 - 2000 • Director, CafePress.com since 2007 • Extensive retail industry, merchandising and operational experience, including 16 years of experience with the company • Implemented successful growth strategies, including Pottery Barn Kids...

  • Page 109
    ... goods) since 2009 • Chairman and Director of The Body Shop International plc (personal care products), 2002 - 2008 • Chairman of Supervisory Board, Gucci Group NV (clothing), 1995 -2004 • Chairman of the Audit and Finance Committee • Chief Financial and Administrative Officer, Skype Limited...

  • Page 110
    ... Director Since Position with the Company and Recent Business Experience, including Directorships Held During Past Five Years Specific Experience, Qualifications, Attributes and Skills Anthony A. Greener ...Age 70 2007 • Member of the Compensation Committee and the Nominations and Corporate...

  • Page 111
    ... in the capital markets and investment banking sectors • In-depth knowledge of the company's business, having advised the company since its initial public offering in 1983 THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF ALL OF THE DIRECTORS LISTED ABOVE. Proxy...

  • Page 112
    ... in our annual proxy statement; and • Reviews the financial impact of selected strategic initiatives, and reviews and recommends for Board approval selected financing, dividend and stock repurchase policies and plans. • Reviews and determines our executive officers' compensation; • Reviews and...

  • Page 113
    ...and determines our compensation policy for our non-employee directors; • Considers resignation offers of director nominees and recommends to the Board the action to be taken with respect to each such offered resignation; and • Evaluates the performance of our Chief Executive Officer and oversees...

  • Page 114
    ... publicly as exhibits to our periodic reports and are also available for inspection at our principal executive offices. Copies will be sent to shareholders free of charge upon written request to Williams-Sonoma, Inc., Attention: Corporate Secretary, 3250 Van Ness Avenue, San Francisco, California...

  • Page 115
    ...law. In addition, in general, Delaware case law provides a well-developed body of law defining the proper duties and decision making process expected of a board of directors in evaluating potential and proposed corporate takeover offers and business combinations. The Board believes that the Delaware...

  • Page 116
    ...our current employees, including management. Upon consummation of the Reincorporation, our daily business operations will continue as they are presently conducted at our principal executive offices located at 3250 Van Ness Avenue, San Francisco, California 94109. The consolidated financial condition...

  • Page 117
    ... provides that the Board may abandon the Reincorporation at any time prior to the Effective Time if the Board determines that the Reincorporation is inadvisable for any reason. For example, the DGCL or the California General Corporation Law may be changed to reduce the benefits that the company...

  • Page 118
    ... statement, and the California Bylaws and California Articles are filed publicly as exhibits to our periodic reports. Provision W-S California W-S Delaware Authorized Shares 253,125,000 shares of Common Stock, par value $0.01 per share 7,500,000 shares of Preferred Stock, par value $0.01 per share...

  • Page 119
    ...is not practical for a public company, or (ii) the Commissioner of Corporations approves the merger. The 50/90 rule, when combined with the requirement in the California Articles that holders of two-thirds of the outstanding shares must approve a merger transaction, may make it more difficult for an...

  • Page 120
    ... date. The Board shall promptly, but in all events within ten days after the date on which such a request is received, adopt a resolution fixing the record date. Consistent with the California Bylaws and California law, the Delaware Certificate and the Delaware Bylaws provide that directors may not...

  • Page 121
    ... of the Board, the Chief Executive Officer, or holders of shares entitled to cast not less than 10% of the votes at such meeting, provided that such holders have held at least a 10% net long position in the company's outstanding shares for at least one year. In the case of a special meeting called...

  • Page 122
    Provision W-S California W-S Delaware Change in Number of Directors Under the California General Corporation Law, although a change in the number of directors must generally be approved by shareholders, the board of directors may fix the exact number of directors within a stated range set forth ...

  • Page 123
    ... to cumulate their votes at such election. California law permits a corporation that is listed on a national securities exchange to amend its articles or bylaws to eliminate cumulative voting by approval of the board of directors and of the outstanding shares voting together as a single class. The...

  • Page 124
    ... insurance for the benefit of its officers, directors, employees and agents whether or not the corporation would have the power to indemnify against the liability covered by the policy. California law permits a corporation to provide rights to indemnification beyond those provided therein to the...

  • Page 125
    ...• The payment of unlawful dividends or unlawful stock repurchases or redemption; or • Transactions in which the director received an improper personal benefit. Such a limitation of liability provision also may not limit a director's liability for violation of, or otherwise relieve the company or...

  • Page 126
    ...liabilities) over the capital associated with issuances of its common stock. Moreover, the DGCL permits a board of directors to reduce its capital and transfer such amount to its surplus. What are the interests of the Company's directors and executive officers in the Reincorporation? In considering...

  • Page 127
    ... only addresses "U.S. persons" for U.S. federal income tax purposes, generally defined as beneficial owners of our common stock who are: • individuals who are citizens or residents of the United States; • corporations (including an entity treated as a corporation for U.S. federal income tax...

  • Page 128
    ... of the outstanding shares of the company must vote "FOR" this proposal. If approved, when would the Reincorporation become effective? We expect that the Reincorporation, if approved, will become effective shortly after the shareholder approval. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT...

  • Page 129
    ... Plan may be designed to qualify as "performance-based" compensation within the meaning of Section 162(m). Pursuant to Section 162(m), the company generally may not deduct for federal income tax purposes compensation paid to our Chief Executive Officer or our three other highest paid employees...

  • Page 130
    ... applicable requirements and criteria of the New York Stock Exchange. Members of the committee must also qualify as "outside directors" under Section 162(m) to the extent the company wishes to receive a federal tax deduction for certain compensation paid under the plan to our Chief Executive Officer...

  • Page 131
    ... and conditions applicable to the awards. Please see "How are the directors compensated?" on page 8 for a description of awards granted to our non-employee directors for fiscal 2010. What is a stock option? A stock option is the right to acquire shares of our common stock at a fixed exercise price...

  • Page 132
    ... fair market value of shares covered by an option is calculated as the closing price of our stock on the trading day prior to the grant date. With respect to an incentive stock option granted to a shareholder who holds more than 10% of the combined voting power of all classes of stock of the company...

  • Page 133
    ... cannot be less than 100% of the fair market value on the date of grant of the shares covered by the stock appreciation right. The fair market value of shares covered by a stock appreciation right is calculated as the closing price of our stock on the trading day prior to the grant date. 37 Proxy

  • Page 134
    ... income; (viii) operating expenses or operating expenses as a percentage of revenue; (ix) operating income or net operating income; (x) return on assets or net assets; (xi) return on equity; (xii) return on sales; (xiii) total shareholder return; (xiv) stock price; (xv) growth in shareholder value...

  • Page 135
    ... will make an appropriate or proportionate adjustment to (i) the maximum number of shares available for issuance under the plan, (ii) the per person limits on awards, (iii) the number and kind of shares subject to outstanding awards, and (iv) the exercise price of outstanding stock option or stock...

  • Page 136
    ...with the Internal Revenue Service, to recognize income at the time he or she receives the award in an amount equal to the fair market value of the shares underlying the award (less any cash paid for the shares) on the date the award is granted. Restricted Stock Units A participant generally will not...

  • Page 137
    ... between the fair market value of the shares at the time of receipt and the amount, if any, paid for the shares. However, an employee participant will be subject to employment taxes (FICA and, where applicable, state disability insurance taxes) at the time a deferred stock award vests, even...

  • Page 138
    ... group and all employees and consultants (including all current executive officers who are not named executive officers) as a group under the plan. Williams-Sonoma, Inc. 2001 Long-Term Incentive Plan Restricted Stock or Options Stock Appreciation Rights Restricted Stock Units # of Shares # of Shares...

  • Page 139
    ...markets in which we compete. Such awards also are crucial to our ability to motivate employees to achieve our goals. We will benefit from increased stock ownership by selected executives, other employees and non-employee directors. The increase in the reserve of common stock available under the plan...

  • Page 140
    ... performance-based and time-based equity awards in fiscal 2010. Restricted stock units that vest on the fourth anniversary of the grant date only if positive net cash by operating activities is achieved provide both retention value and incentives to achieve the company's financial goals, while stock...

  • Page 141
    ... item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this Proxy Statement. Accordingly, we ask our shareholders to vote "FOR" the following resolution at the 2011 Annual Meeting: "RESOLVED, that the company...

  • Page 142
    ... our compensation philosophy, policies and practices as disclosed in the proxy statement every year. Since the compensation of our named executive officers is evaluated, adjusted and approved on an annual basis, an annual advisory vote will provide the Board and Compensation Committee with the best...

  • Page 143
    ... questions. What services did Deloitte provide in fiscal 2010? Deloitte's services for fiscal 2010 included: • The issuance of an opinion on (i) our annual consolidated financial statements and the effectiveness of our internal control over financial reporting, (ii) our 401(k) plan and (iii...

  • Page 144
    ... OFFICERS The following table provides certain information about our executive officers as of March 28, 2011. Our executive officers are appointed by our Board and serve at the pleasure of our Board, subject to rights, if any, under employment contracts. Name Position with the Company and Business...

  • Page 145
    ... to receive one share of the company's common stock and a cash payment equal to the fair market value of one share of the company's common stock on the applicable vesting date. The units vested in monthly installments throughout the period over which Mr. Lester provided such consulting services. The...

  • Page 146
    ...) Restricted stock units were granted as part of the Williams-Sonoma, Inc. Equity Award Exchange, which was approved by shareholders at the 2008 Annual Meeting and was completed during fiscal 2009. Mr. Harvey and Mr. Jaffe were not named executive officers at the time that the exchange program began...

  • Page 147
    ... 401(k) plan for each fiscal year. (3) Represents the maximum executive medical supplement payable by the company. Effective January 1, 2009, the company eliminated the executive medical supplement. (4) Represents the value of parking provided by the company, based on current estimated market rates...

  • Page 148
    ... to receive one share of the company's common stock and a cash payment equal to the fair market value of one share of the company's common stock on the applicable vesting date. The units vested in monthly installments throughout the period over which Mr. Lester provided such consulting services. The...

  • Page 149
    ... Equity Awards at Fiscal Year-End The following tables set forth information regarding equity awards held by our named executive officers at January 30, 2011: Option Awards(1) Equity Incentive Plan Number of Securities Number of Securities Awards: Number of Underlying Underlying Securities...

  • Page 150
    ...cash payment equal to dividends declared between the grant date and the vesting date. (4) Represents restricted stock units granted on April 10, 2009 in connection with the Williams-Sonoma, Inc. Equity Award Exchange. Mr. Harvey was not a named executive officer at the time that the exchange program...

  • Page 151
    ... (1) Executive Deferral Plan. Participation in the plan is limited to a group of select management and highly compensated employees. In fiscal 2009, participants were able to defer up to 75% of their base salary and up to 100% of their bonus, net of applicable employment and withholding taxes and...

  • Page 152
    ...At death, the plan may provide a death benefit funded by a life insurance policy, in addition to payment of the participant's account. (2) Represents the value realized on each vesting date of the following: (i) 249,501 shares that vested upon Mr. Lester's retirement on May 26, 2010 (the "Retirement...

  • Page 153
    ... In the event that the severance payments and other benefits payable to an executive under a retention agreement constitute a "parachute payment" under Section 280G of the U.S. tax code and would be subject to the applicable excise tax, then the executive's severance payments and other benefits will...

  • Page 154
    ... to report directly to a specified individual or the Board of the company or the entity holding all or substantially all of the company's assets following a change of control, or (v) relocation of the executive to a location more than 50 miles from the company's San Francisco, California main office...

  • Page 155
    ...,000 shares underlying outstanding option awards. Value is based on a stock price of $32.34, the closing price of our common stock on January 28, 2011, the last business day of fiscal 2010. (6) Based on a monthly payment of $3,000 to be paid by the company for 18 months or 12 months, as applicable...

  • Page 156
    ... the company, (ii) reduce Ms. McCollam's annual salary below her current base salary, (iii) locate Ms. McCollam other than at the company's principal executive offices, (iv) relocate the company's principal executive offices outside the San Francisco metropolitan area, (v) substantially change the...

  • Page 157
    ... outstanding option awards. Value is based on a stock price of $32.34, the closing price of our common stock on January 28, 2011, the last business day of fiscal 2010. (4) Based on a monthly payment of $3,000 to be paid by the company for 12 months in lieu of continued employment benefits. 61

  • Page 158
    ... outstanding option awards. Value is based on a stock price of $32.34, the closing price of our common stock on January 28, 2011, the last business day of fiscal 2010. (4) Based on a monthly payment of $3,000 to be paid by the company for 12 months in lieu of continued employment benefits. W. Howard...

  • Page 159
    ... $592,839, which represents the fair market value of each vested share on the applicable vesting date, and the associated accrued dividend equivalent payment of $37,500. In recognition of his retirement and his contributions to the company, and in exchange for a general release of claims against the...

  • Page 160
    ... of the named executive officers during fiscal 2010 is listed in the Summary Compensation Table appearing in this Proxy Statement on page 49; • Reviews, makes recommendations to the Board regarding, and approves, as appropriate, general compensation goals and guidelines for the company's employees...

  • Page 161
    ... the company's 2001 Long-Term Incentive Plan to non-executive officer employees with a corporate rank at or below Senior Vice President and equity awards or cash awards to those employees with a corporate rank at or below Director, but at its November 10, 2010 meeting, the Compensation Committee...

  • Page 162
    ... executive officers and director compensation. Cook & Co. also provided certain services on behalf of the Compensation Committee primarily related to compiling market data and advice regarding general compensation trends in the retail industry and among similarly situated companies. The Compensation...

  • Page 163
    ... salaries are competitive with comparable public retail companies with respect to similar positions, to create an incentive for executives to join and remain with the company; • Annual incentive opportunities are based principally on the company's overall corporate performance and the executive...

  • Page 164
    ... 15,000 employees The following table, which is based on publicly available information as of January 31, 2011 as provided by Cook & Co., provides a financial overview of the comparable companies to illustrate their revenues, income and market capitalization as a group relative to the company. The...

  • Page 165
    ... increase provided to the company's associates in the general course of the company's annual focal review process. These changes were informed by the impending changes to the executive management team, including Ms. Alber's anticipated appointment as the company's Chief Executive Officer (discussed...

  • Page 166
    ... items and/or in management's discussion and analysis of financial condition and results of operations appearing in the company's annual report to shareholders for the applicable year, or (ii) the effect of any changes in accounting principles affecting the company's or a business unit's reported...

  • Page 167
    ... goal under the Bonus Plan? The Compensation Committee chose earnings per share as the secondary performance goal for fiscal 2010 because it believes that earnings per share is a significant measure of performance and is the measure most closely aligned to long-term shareholder value. What were the...

  • Page 168
    ... named executive officers under the plan in amounts up to three times each executive's base salary as of the beginning of the fiscal year. In making its decision regarding bonuses, the Compensation Committee evaluated company performance and the individual performance of the named executive officers...

  • Page 169
    ... officers and other employees to increase shareholder value over the long term. The equity awards granted to named executive officers are designed to deliver target total direct compensation (base salary, target bonus and equity awards) that is competitive with that offered by comparable companies...

  • Page 170
    ... stock units that provide named executive officers with immediate value because they have no purchase price (but are subject to vesting) and the benefits to our shareholders of granting stock-settled stock appreciation rights with value that is tied to sustained long-term stock price performance...

  • Page 171
    ... the closing price of the company's common stock on the trading day prior to the grant date. In general, equity awards to named executive officers are made during the Compensation Committee's March meeting in which the Compensation Committee reviews company performance over the past fiscal year and...

  • Page 172
    ... a stock ownership policy for our executive officers in fiscal 2011. We currently expect the Compensation Committee to consider any such recommendation at a future Compensation Committee meeting. Does the company have a policy regarding recovery of past awards or payments in the event of a financial...

  • Page 173
    ...its estimated fair market value at the time we entered into the Retirement and Consulting Agreement. On January 3, 2011, as required by the lease agreement, the company provided the lessor with notice of its intent to exercise the option to purchase the aircraft at the end of the lease term. However...

  • Page 174
    ... offers to acquire the company; and (2) create a total executive compensation plan that is competitive with our proxy peer group. None of the executive officers is provided with any type of golden parachute excise tax gross-up. In addition, our equity compensation plans do not otherwise provide...

  • Page 175
    ... nonqualified deferred compensation plan for all associates beginning in January 2010 and will continue to evaluate the benefit program in the future to ensure that it is providing the best value to associates and the company. How does the Compensation Committee address Internal Revenue Code Section...

  • Page 176
    ... policy; and • Annually evaluate the performance of the company's Chief Executive Officer and oversee the evaluation of the performance of the company's management and the Board. Does the Nominations and Corporate Governance Committee have a policy with regard to the consideration of director...

  • Page 177
    ... possible director candidates for election at next year's Annual Meeting. A shareholder that desires to recommend a candidate for election to the Board shall direct the recommendation in writing to Williams-Sonoma, Inc., Attention: Corporate Secretary, 3250 Van Ness Avenue, San Francisco, California...

  • Page 178
    ... the performance of the company's Chief Executive Officer; • Reviewed and updated the company's Corporate Governance Guidelines; and • Considered and recommended to the Board the adoption of a majority voting policy applicable in uncontested director elections. Who prepared this report? Members...

  • Page 179
    ... public accounting firm, pre-approve all audit and non-audit services of the independent registered public accounting firm, and assess its qualifications and independence; • Review the performance of the company's internal audit function, the company's auditing, accounting and financial reporting...

  • Page 180
    ... to in items (1) through (3) above, the Audit and Finance Committee recommended to the Board that the audited financial statements be included in the company's Annual Report on Form 10-K for fiscal 2010 for filing with the SEC. AUDIT AND FINANCE COMMITTEE OF THE BOARD OF DIRECTORS Adrian T. Dillon...

  • Page 181
    ... with the NYSE Corporate Governance Listing Standards, was submitted to the NYSE on June 10, 2010. The certifications of our 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 January 30, 2011 were submitted to...

  • Page 182
    ... of our Board or (ii) the transaction involves the service of one of our executive officers or directors or any related compensation, is reportable under Item 402 of Regulation S-K and is approved by our Compensation Committee. For the purposes of our related party transaction policy, "related party...

  • Page 183
    ... fiscal 2010 transactions and (ii) information provided to us by them, we believe that all reporting requirements under Section 16(a) were met in a timely manner by the persons who were executive officers, members of the Board of Directors or greater than 10% shareholders during such fiscal year...

  • Page 184
    ... stock listed below are currently exercisable or are exercisable within 60 days of March 28, 2011. Amount and Nature of Beneficial Ownership Shares Options Percent of Class(1) Name and Address of Beneficial Owner Position with Company Director and Executive Vice President, Chief Marketing Officer...

  • Page 185
    ... trust accounts and directs the voting of such shares. (7) Mr. Connolly owns $1,313,821 in the Williams-Sonoma, Inc. Stock Fund under our 401(k) plan as of March 28, 2011. The number of shares listed in the table includes 33,661 shares held in the Williams-Sonoma, Inc. Stock Fund. This number was...

  • Page 186
    ... in the Williams-Sonoma, Inc. Stock Fund by $39.03, the closing price of Williams-Sonoma, Inc. common stock on March 28, 2011. (12) The directors and officers as a group own $2,860,069 in the Williams-Sonoma, Inc. Stock Fund under our 401(k) plan, as of March 28, 2011. The number of shares listed in...

  • Page 187
    ... Plan will continue; or (iv) each outstanding option will be exchanged for a payment in cash or shares equal to the excess of the fair market value of our common stock over the exercise price. No future awards will be granted from the 2000 Nonqualified Stock Option Plan or the 1993 Stock Option Plan...

  • Page 188
    ...year's Annual Meeting. Since this Proxy Statement is being mailed to you on or about April 7, 2011, shareholder proposals must be received by our Secretary at our principal executive offices between January 23, 2012 and February 22, 2012 in order to be raised at our 2012 Annual Meeting. To be timely...

  • Page 189
    ... proposals should be sent to: Williams-Sonoma, Inc., Attention: Corporate Secretary, 3250 Van Ness Avenue, San Francisco, California 94109. AVAILABILITY OF PROXY STATEMENT AND ANNUAL REPORT ON FORM 10-K Pursuant to new SEC rules, we have elected to provide access to our proxy materials by...

  • Page 190
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  • Page 191
    .... B. W-S California is a corporation duly incorporated and existing under the laws of the State of California and has a total authorized capital stock of 260,625,000 shares, of which 253,125,000 are designated common stock, par value $0.01 per share (the "W-S California Common Stock"), and 7,500...

  • Page 192
    ... manner as if W-S Delaware had itself incurred them, all as more fully provided under the applicable provisions of the DGCL and the California Corporations Code. 2. CHARTER DOCUMENTS, DIRECTORS AND OFFICERS 2.1 Certificate of Incorporation. The Amended and Restated Certificate of Incorporation of...

  • Page 193
    ... price per share applicable to any such option, warrant or right to purchase or receive, or security convertible into, W-S California Common Stock at the Effective Date. No other changes in the terms and conditions of such options will occur. (b) A number of shares of W-S Delaware Common Stock...

  • Page 194
    ...shall have been approved for listing by the New York Stock Exchange. 5. GENERAL 5.1 Covenants of W-S Delaware. W-S Delaware covenants and agrees that it will, on or before the Effective Date: (a) Qualify to do business as a foreign corporation in the State of California and, in connection therewith...

  • Page 195
    5.5 Registered Office. The registered office of the Surviving Corporation in the State of Delaware is 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle, 19808, and Corporation Service Company is the registered agent of the Surviving Corporation at such address. 5.6 ...

  • Page 196
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  • Page 197
    ...the corporation is Williams-Sonoma, Inc. ARTICLE II The address of the corporation's registered office in the State of Delaware is 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle, 19808. The name of its registered agent at such address is Corporation Service Company...

  • Page 198
    ... number of directors that constitutes the entire Board of Directors of the corporation shall be fixed by, or in the manner provided in, the Bylaws of the corporation. At each annual meeting of stockholders, directors of the corporation shall be elected to hold office until the expiration of the term...

  • Page 199
    ... shares of capital stock of the Corporation entitled to vote generally in the election of the Board of Directors (the "Requisite Percentage"); provided, that such holder or holders have held at least a 10% net long position in the Corporation's outstanding shares for at least one year; provided...

  • Page 200
    ... plan or proposal for dissolution or liquidation of this Corporation; provided that the provisions of this Article XIII shall not apply to any such transaction solely between the Corporation and another corporation of which 50% or more of the outstanding shares entitled to vote are owned, directly...

  • Page 201
    ...AMENDED AND RESTATED BYLAWS OF WILLIAMS-SONOMA, INC. (Effective , 2011) TABLE OF CONTENTS Page ARTICLE I CORPORATE OFFICES ...1.1 REGISTERED OFFICE ...1.2 OTHER OFFICES ...ARTICLE II MEETINGS OF STOCKHOLDERS ...2.1 PLACE OF MEETINGS ...2.2 ANNUAL MEETING ...2.3 SPECIAL MEETING ...2.4 SUBMISSION OF...

  • Page 202
    ... CHAIRMAN OF THE BOARD ...5.7 CHIEF EXECUTIVE OFFICER ...5.8 PRESIDENT ...5.9 VICE PRESIDENT ...5.10 SECRETARY ...5.11 CHIEF FINANCIAL OFFICER ...5.12 TREASURER ...5.13 REPRESENTATION OF SHARES OF OTHER CORPORATIONS ...ARTICLE VI INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES, AND OTHER AGENTS...

  • Page 203
    ... the registered office of the Corporation. 2.2 ANNUAL MEETING. (a) The annual meeting of stockholders shall be held each year on a date and at a time designated by resolution of the Board of Directors. The meeting shall be for the election of directors and for the transaction of such business as may...

  • Page 204
    ... at the principal executive offices of the Corporation not less than ninety (90) nor more than one hundred twenty (120) days prior to the one-year anniversary of the preceding year's annual meeting; provided, however, that, subject to the last sentence of this Section 2.2(c), in the event that the...

  • Page 205
    ... timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the secretary at the principal executive offices of the Corporation not later than the close of business on the tenth (10th) day following the day on which such public announcement...

  • Page 206
    ... shares of capital stock of the Corporation entitled to vote generally in the election of the Board of Directors (the "Requisite Percentage"); provided, that such holder or holders have held at least a 10% net long position in the Corporation's outstanding shares for at least one year; provided...

  • Page 207
    ... the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall an adjournment, or postponement of a special meeting for which notice has been given, commence a new time...

  • Page 208
    ... of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a director of the Corporation, and will comply with all applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and...

  • Page 209
    ...by proxy, except to the extent that the vote of a larger number may be required by law or the rules of any stock exchange upon which the Corporation's securities are listed. (c) Except as provided in Section 3.4 of these Bylaws, each director shall be elected by the vote of the majority of the votes...

  • Page 210
    ...at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new...

  • Page 211
    ...by the Board of Directors is required by applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or...

  • Page 212
    ...time and place of special meetings shall be (i) delivered personally by courier or telephone to each director, (ii) sent by first-class mail, postage prepaid, (iii) sent by facsimile, or (iv) by electronic mail, directed to each director at that director's address, telephone number, facsimile number...

  • Page 213
    ... of the shares then entitled to vote at an election of directors. No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of such director's term of office. Exhibits 3.12 CHAIRMAN OF THE BOARD OF DIRECTORS. The Corporation may also...

  • Page 214
    ... a chief financial officer, a treasurer and such additional officers as may be elected or appointed in accordance with Section 5.3 of these Bylaws and as may be necessary to enable the Corporation to sign instruments and share certificates. Any number of offices may be held by the same person. C-12

  • Page 215
    ... the Board of Directors to the chairman of the Board of Directors, if there be such an officer, the chief executive officer shall be the general manager of the corporation and shall, subject to the control of the Board of Directors, have general supervision, direction and control of the business and...

  • Page 216
    ... and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors. 5.11 CHIEF FINANCIAL OFFICER. The chief financial officer shall have general supervision, direction and control of the financial affairs of the Corporation and shall have such other powers...

  • Page 217
    ... Corporation or is or was serving (during such person's tenure as director or officer) at the request of the Corporation as a director, officer or trustee of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan...

  • Page 218
    ... as designated by the Board of Directors, keep a record of its stockholders listing their names and addresses and the number and class of shares held by each stockholder, a copy of these Bylaws as amended to date, accounting books, and other records. The officer who has charge of the stock ledger...

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    ... to vote at the meeting and the number of shares held by each of them. ARTICLE VIII GENERAL MATTERS 8.1 CHECKS. From time to time, the Board of Directors shall determine by resolution which person or persons may sign or endorse all checks, drafts, other orders for payment of money, notes or other...

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    ... plural number includes the singular, and the term "person" includes both a corporation and a natural person. 8.6 DIVIDENDS. The directors of the Corporation, subject to any restrictions contained in (a) the DGCL or (b) the Certificate of Incorporation, may declare and pay dividends upon the shares...

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    8.11 TIME PERIODS. In applying any provision of these Bylaws which requires that an act be done or not be done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the...

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    ... Award Agreement is subject to the terms and conditions of this Plan. "Awarded Stock" means the Common Stock subject to an Award. "Board" means the Board of Directors of the Company. "Code" means the Internal Revenue Code of 1986, as amended, and any successor tax code, along with related rules and...

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    ..., as amended from time to time. "Fair Market Value" means, as of any date, the closing sales price for a share of Stock (or the closing bid, if no sales are reported) as quoted on the New York Stock Exchange on the last market trading day prior to the day of determination, as reported in the Wall...

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    ...meet the then applicable requirements and criteria of the New York Stock Exchange (or other market on which the Stock then trades) for qualification as an "independent director." (b) Delegation by the Administrator. The Administrator, in its sole discretion and on such terms and conditions as it may...

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    ... on Vesting and Acceleration. Full Value Awards that result in issuing up to 5% of the maximum aggregate number of shares of Stock authorized for issuance under the Plan (the "5% Limit") may be granted to any one or more employees or Non-employee Directors without respect to any minimum vesting...

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    ... on or after the date of receiving shareholder approval of the amended Plan in 2006, any shares subject to Restricted Stock, Restricted Stock Units or Deferred Stock Awards with a per share or unit purchase price lower than 100% of Fair Market Value on the date of grant shall be counted against the...

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    ... may direct that the substitute Awards be granted with such terms and conditions as the Administrator considers appropriate in the circumstances. SECTION 4. ELIGIBILITY Those persons eligible to participate in the Plan shall be officers, employees and Non-employee Directors of the Company, its...

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    ... of stock of the Company or any parent or subsidiary corporation and an Incentive Stock Option is granted to such employee, the option price of such Incentive Stock Option shall be not less than 110% of the Fair Market Value on the grant date. (ii) Option Term. The term of each Stock Option shall...

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    ... with the terms of the Plan, as the Administrator deems desirable. (i) Exercise Price. The exercise price per share shall be determined by the Administrator at the time of grant, but it shall not be less than 100% of the Fair Market Value on the date of grant. (ii) SAR Term. The term of each Stock...

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    ... be entitled to receive payment from the Company solely in shares of Stock equal in value to an amount determined by multiplying the difference between the Fair Market Value of a share of Stock on the date of exercise over the exercise price times the number of shares of Stock with respect to which...

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    ...Stock Unit Award can be made without any required payment, upon payment of par value or upon any other such payment, all as determined by the Administrator in its discretion and in compliance with Applicable Law. Conditions may be based on continuing employment (or service as a Non-employee Director...

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    ... attainment of pre-established performance goals, objectives and other conditions on which the Restricted Stock Unit shall vest, provided, however, that any Awards of Restricted Stock that vest solely on the basis of continuing employment (or service as a Non-employee Director) shall be subject to...

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    ... as such for at least three months), either (i) a Non-Qualified Stock Option to acquire such number of shares of Stock as may be determined by the Administrator with an exercise price per share for the Stock covered by such Stock Option at least equal to the Fair Market Value on the date as of which...

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    ... under a U.S. Securities & Exchange Commission Form S-8 registration statement, provided that the transferee agrees in writing with the Company to be bound by all of the terms and conditions of this Plan and the applicable Award Agreement. (c) No Repricing. The exercise price for the Stock to be...

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    ... consummation of a consolidation or merger or sale of all or substantially all of the assets of the Company in which outstanding shares of Stock are exchanged for securities, cash or other property of an unrelated corporation or business entity or in the event of a liquidation or dissolution of the...

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    ... Subsidiary to terminate the employment of any of its employees at any time, with or without cause or notice. (d) Trading Policy Restrictions. Awards and related transactions under the Plan shall be subject to such Company insider-trading-policy-related restrictions, terms and conditions as may be...

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    ... Officer and other executive officers; (ii) administer the Company's incentive compensation and other equity-based plans (the "Plans") and make grants under them; (iii) oversee the Company's compensation policies, plans, and benefits programs generally, and (iv) in the case of the Williams-Sonoma...

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    ... and make recommendations to the Board of Directors with respect to changes in the number of shares reserved for issuance under those Plans. • Preparing a compensation committee report on executive compensation as required by the SEC to be included in the Company's annual proxy statement or annual...

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    ..., as appropriate, the compensation policy for the non-employee directors of the Company. • Annually evaluate the performance of the Company's Chief Executive Officer, annually oversee evaluation of the performance of the Board and the Company's management and provide a report with respect to this...

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    ... in the evaluation of director compensation. • Conduct an annual performance evaluation of the Committee. MEETINGS The Nominations and Corporate Governance Committee will set its own schedule and will meet periodically, but not less frequently than at least one (1) time each year. The members of...

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    ...created by the Board of Directors (the "Board") of Williams-Sonoma, Inc. (the "Company") to: • Oversee the integrity of the financial statements of the Company; the qualifications, independence, performance and retention of the Company's independent registered public accounting firm ("independent...

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    ... direct, and make such investigations and reviews of the Company and its operations as the Chief Executive Officer or the Board may from time to time request. The Committee shall: Financial Statement and Disclosure Matters • Review and discuss with management and the independent auditor the annual...

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    ... to discuss the planning and staffing of the audit. Oversight of the Company's Internal Audit Function • Review the appointment and replacement of the senior internal auditing executive. Exhibits • Review the significant reports to management prepared by the internal auditing department and...

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    ... the Company's Chief Financial Officer at least once each year the sufficiency of company systems to support effective internal controls and any recommended changes in the information technology department's priorities and projects planned for improving such systems. • Review reports to management...

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    ... frequently than four times per year. • The Committee shall meet at least annually with management, the internal auditors, and the independent auditor in separate executive sessions. The Committee may request any officer or employee of the Company or the Company's outside counsel or independent...

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    ...Mill Road Palo Alto, CA 94304 Trademarks Pottery Barn, pottery barn kids, PBteen, west elm, Williams-Sonoma and Williams-Sonoma Home are trademarks of Williams-Sonoma, Inc. Stock Exchange Listing New York Stock Exchange Symbol: WSM Corporate Website www.williams-sonomainc.com Shareholder/Investor...

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