Pottery Barn 2011 Annual Report Download - page 72

Restricted Stock Units
The following table summarizes our restricted stock unit activity during fiscal 2011:
Shares
Weighted Average
Grant Date
Fair Value
Intrinsic
Value1
Balance at January 30, 2011 2,050,898 $23.44
Granted 706,963 39.27
Released (313,766) 25.77 $12,865,000
Canceled (150,244)
Balance at January 29, 2012 2,293,851 $29.74 $80,560,000
Vested plus expected to vest at January 29, 2012 1,631,197 $29.73 $57,288,000
1Intrinsic value for outstanding and unvested restricted stock units is based on the market value on the last business day of
the fiscal year (or $35.12). For released restricted stock units, the intrinsic value is based on the market value on the date
of release.
Tax Effect
We present tax benefits resulting from the exercise of stock-based awards as operating cash flows, and tax
deductions in excess of the cumulative compensation cost recognized for stock-based awards exercised as
financing cash flows in the Consolidated Statements of Cash Flows. During fiscal 2011, fiscal 2010 and fiscal
2009, net proceeds from the exercise of stock-based awards was $9,614,000, $15,736,000 and $11,861,000,
respectively, and the tax benefit associated with such exercises totaled $15,078,000, $24,762,000 and 5,981,000,
respectively.
Note I: Williams-Sonoma, Inc. 401(k) Plan and Other Employee Benefits
We have a defined contribution retirement plan, the Williams-Sonoma, Inc. 401(k) Plan (the “Plan”), which is
intended to be qualified under Internal Revenue Code Sections 401(a), 401(k), 401(m) and 4975(e)(7). The Plan
permits eligible employees to make salary deferral contributions up to 75% of their eligible compensation each
pay period (7% for highly-compensated employees). Employees designate the funds in which their contributions
are invested. Each participant may choose to have his or her salary deferral contributions and earnings thereon
invested in one or more investment funds, including our company stock fund.
Our matching contribution is equal to 50% of each participant’s salary deferral contribution, taking into account
only those contributions that do not exceed 6% of the participant’s eligible pay for the pay period. Each
participant’s matching contribution is earned on a semi-annual basis with respect to eligible salary deferrals for
those employees that are employed with the company on June 30th or December 31st of the year in which the
deferrals are made. Each associate must complete one year of service prior to receiving company matching
contributions. For the first five years of the participant’s employment, all matching contributions vest at the rate
of 20% per year of service, measuring service from the participant’s hire date. Thereafter, all matching
contributions vest immediately.
The Plan consists of two parts: a profit sharing plan portion and a stock bonus plan/employee stock ownership
plan (the “ESOP”). The ESOP portion is the portion that is invested in the Williams-Sonoma, Inc. Stock Fund.
The profit sharing and ESOP components of the Plan are considered a single plan under Code section 414(l). Our
contributions to the plan were $4,862,000, $4,247,000 and $4,477,000 in fiscal 2011, fiscal 2010 and fiscal 2009,
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 suspended all employee salary and bonus deferrals into the plan. We have an unsecured
obligation to pay in the future the value of the deferred compensation adjusted to reflect the performance,
whether positive or negative, of selected investment measurement options, chosen by each participant, during the
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