Restoration Hardware 2012 Annual Report Download - page 97
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The concentration of ownership in the hands of our Principal Equity Holders may have the effect of delaying,
preventing or deterring a change of control of our Company, could deprive stockholders of an opportunity to
receive a premium for their common stock as part of a sale of our Company and might ultimately affect the
market price of our common stock.
We are a “controlled company” within the meaning of the New York Stock Exchange (“NYSE”) listing
requirements and, as a result, qualify for, and intend to rely on, exemptions from certain corporate
governance requirements. You will not have the same protections afforded to stockholders of companies that
are subject to such corporate governance requirements.
Because of the aggregate voting power over our Company held by Home Holdings, we are considered a
“controlled company” for the purposes of the NYSE listing requirements. As such, we are exempt from the
corporate governance requirements that our board of directors, our compensation committee and our nominating
and corporate governance committee meet the standard of independence established by those corporate
governance requirements. The independence standards are intended to ensure that directors who meet the
independence standard are free of any conflicting interest that could influence their actions as directors.
We intend to utilize these exemptions afforded to a “controlled company.” Accordingly, you do not have the
same protections afforded to stockholders of companies that are subject to all of the corporate governance
requirements of the NYSE.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
We leased approximately 935,000 gross square feet for our 65 Galleries, 3 Full Line Design Galleries,
3 Baby & Child Galleries and 13 outlet stores that were open as of February 2, 2013. The initial lease term of our
retail stores is generally 10 – 15 years. Certain leases contain renewal options for up to 20 years. Most leases for
our retail stores provide for a minimum rent, typically including escalating rent increases, plus a percentage rent
based upon sales after certain minimum thresholds are achieved. The leases generally require us to pay insurance,
utilities, real estate taxes and repair and maintenance expenses. We also lease approximately 35,000 square feet
for offsite storage.
41
Form 10-K