Pottery Barn 2010 Annual Report Download - page 116

improper personal benefit. We believe that the better understood and comparatively stable corporate environment
afforded by Delaware law will enable us to compete more effectively with other public companies in the
recruitment of talented and experienced directors and officers.
How will the Reincorporation be effected?
The Reincorporation will be effected by the merger of W-S California with and into W-S Delaware, a wholly-
owned subsidiary of the company that has been recently incorporated under the Delaware General Corporation
Law (the “DGCL”) for purposes of the Reincorporation. The company as it currently exists as a California
corporation will cease to exist as a result of the merger, and W-S Delaware will be the surviving corporation and
will continue to operate our business as it existed prior to the Reincorporation. The existing holders of our
common stock will own all of the outstanding shares of W-S Delaware common stock, and no change in
ownership will result from the Reincorporation. Assuming approval by our shareholders, we currently intend to
cause the Reincorporation to become effective as soon as reasonably practicable following the Annual Meeting,
which is scheduled for May 25, 2011.
At the effective time of the Reincorporation (the “Effective Time”), we will be governed by the Delaware
Certificate, the Delaware Bylaws and the DGCL. Although the Delaware Certificate and the Delaware Bylaws
contain many provisions that are similar to the provisions of the California Articles and the California Bylaws,
they do include certain provisions that are different from the provisions contained in the California Articles and
the California Bylaws or under the California General Corporation Law as described in more detail below.
Will there be any changes to the business of the company as a result of the Reincorporation?
Other than the change in corporate domicile, the Reincorporation will not result in any change in the business,
physical location, management, assets, liabilities or net worth of the company, nor will it result in any change in
location of 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 and results of
operations of W-S Delaware immediately after consummation of the Reincorporation will be the same as those of
W-S California immediately prior to the consummation of the Reincorporation. In addition, upon the
effectiveness of the merger, the board of directors of W-S Delaware will consist of those persons elected to the
board of directors of W-S California and will continue to serve for the term of their respective elections to our
Board, and the individuals serving as executive officers of W-S California immediately prior to the
Reincorporation will continue to serve as executive officers of W-S Delaware, without a change in title or
responsibilities. Upon effectiveness of the Reincorporation, W-S Delaware will be the successor in interest to
W-S California, and the shareholders will become stockholders of W-S Delaware.
If the Reincorporation is approved, each outstanding share of common stock of W-S California will
automatically be converted into one share of common stock of W-S Delaware when the Reincorporation is
effected. All of our employee benefit and incentive compensation plans immediately prior to the Reincorporation
will be continued by W-S Delaware, and each outstanding option to purchase shares of W-S California’s
common stock will be converted into an option to purchase an equivalent number of shares of W-S Delaware’s
common stock on the same terms and subject to the same conditions. The registration statements of W-S
California on file with the Securities and Exchange Commission immediately prior to the Reincorporation will be
assumed by W-S Delaware, and the shares of W-S Delaware will continue to be listed on the New York Stock
Exchange.
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