-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, U3+4am2G3ptobQofuhv2kA9NHM7IhpXjBYwsofOpSAEFwUlK/mvnYhSjPY2G6EOX sNoHAgBdmrC4+TEj2zxkUA== 0000950149-95-000396.txt : 199507030000950149-95-000396.hdr.sgml : 19950703 ACCESSION NUMBER: 0000950149-95-000396 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19950630 EFFECTIVENESS DATE: 19950719 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: WILLIAMS SONOMA INC CENTRAL INDEX KEY: 0000719955 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES [5700] IRS NUMBER: 942203880 STATE OF INCORPORATION: CA FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 033-60787 FILM NUMBER: 95551564 BUSINESS ADDRESS: STREET 1: 100 N POINT ST CITY: SAN FRANCISCO STATE: CA ZIP: 94133 BUSINESS PHONE: 4156168345 MAIL ADDRESS: STREET 1: 100 NORTH POINT STREET CITY: SAN FRANCISCO STATE: CA ZIP: 94133 S-8 1 S-8 DATED JUNE 30, 1995 1 As filed with the Securities and Exchange Commission on June 30, 1995 Registration No. 33-______________________ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------- FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------- WILLIAMS-SONOMA, INC. (Exact name of issuer as specified in its charter) CALIFORNIA 94-2203880 (State or other jurisdiction (I.R.S. employer of incorporation or organization) identification number) 3250 Van Ness Avenue, San Francisco, California 94109 (Address of Principal Executive Office) (Zip Code) Williams-Sonoma Executive Deferral Plan Williams-Sonoma Deferred Compensation Plan (Full title of the Plans) RUSSELL SOLT Copy to: Senior Vice President, Chief RONALD M. LOEB, ESQ. Financial Officer and Secretary Irell & Manella Williams-Sonoma, Inc. 1800 Avenue of the Stars 3250 Van Ness Avenue Suite 900 San Francisco, California 94109 Los Angeles, CA 90067 (415) 421-7900 (310) 277-1010 (Name, address including zip code and telephone number, including area code, of registrants' agent for service) CALCULATION OF REGISTRATION FEE
======================================================================================================================= Proposed Proposed Amount to be Maximum Maximum Title of Registered Offering Price Aggregate Amount of Securities to be Registered (1) (1) Per Share (2) Offering Price (2) Registration Fee - ----------------------------------------------------------------------------------------------------------------------- Executive Deferral Obligations $5,000,000 100% $5,000,000 $1724.00 - ----------------------------------------------------------------------------------------------------------------------- Deferred Compensation Obligations $2,500,000 100% $2,500,000 $ 862.00 =======================================================================================================================
(1) The Executive Deferral Obligations and the Deferred Compensation Obligations are unsecured obligations of Williams-Sonoma, Inc. to pay deferred compensation in the future in accordance with the terms of the Williams-Sonoma Executive Deferral Plan and the Williams-Sonoma Deferred Compensation Plan, respectively. (2) Pursuant to Rule 457(h), estimated solely for the purpose of calculating the registration fee. 2 PART I INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS The document(s) containing the information specified in Part I of Form S-8 will be sent or given to participating employees as specified by Rule 428(b)(1) of the Securities Act of 1933, as amended (the "Securities Act"). These documents and the documents incorporated by reference into this registration statement pursuant to Item 3 of Part II of this registration statement, taken together, constitute a prospectus that meets the requirements of Section 10(a) of the Securities Act. Capitalized terms used but not defined herein shall have the same meanings given them in the Williams-Sonoma, Inc. (the "Company") Executive Deferral Plan (the "Executive Deferral Plan") and the Williams-Sonoma, Inc. Deferred Compensation Plan (the "Deferred Compensation Plan," and together with the Executive Deferral Plan, the "Plans"). PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The documents listed in (a) through (d) below are incorporated by reference in this registration statement on Form S-8. (a) The Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1995; (b) The Company's Quarterly Report on Form 10-Q for the quarter ended April 30, 1995; (c) The Company's definitive Proxy Statement dated April 18, 1995, with respect to its Annual Meeting of Stockholders held on May 24, 1995; and (d) The description of the Company's Common Stock contained in Registrant's Registration Statement on Form 8-A, filed with the Securities and Exchange Commission (the "Commission") on July 25, 1984, including any amendment or report filed for the purpose of updating such description ("Form 8-A"). In addition, all documents subsequently filed by the Company pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), prior to the filing of a post-effective amendment that indicates that all securities offered have been sold or that deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this registration statement and to be part thereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this registration statement to the extent that a statement contained herein or in any subsequently filed document which also is incorporated or deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this registration statement. 3 ITEM 4. DESCRIPTION OF SECURITIES. (a) Obligations under the Executive Deferral Plan Under the Executive Deferral Plan, the Company will provide a select group of management and highly compensated employees (the "Eligible Employees") the opportunity to enter into agreements for the deferral of a specified percentage of their cash compensation. The obligations of the Company under such agreements (the "Obligations") will be unsecured general obligations of the Company to pay the deferred compensation in the future in accordance with the terms of the Executive Deferral Plan and will rank pari passu with other unsecured and unsubordinated indebtedness of the Company from time to time outstanding. In addition, the Company will purchase a life insurance policy for each Eligible Employee who elects to participate in the Plan ("Participant") and will pay the annual premium on such policy. To participate in the Executive Deferral Plan, the Eligible Employee must complete an application for life insurance, comply with various medical underwriting requirements of the insurance company and elect to defer all or a portion of his or her compensation. The amount of compensation to be deferred by each Participant will be determined in accordance with the Executive Deferral Plan based on elections by the Participant. Participants may elect to defer any percentage of salary up to 50% and/or any percentage or dollar amount of bonus up to 100%, with a minimum deferral of 5% of salary. The Obligations will be indexed to one or more mutual funds or contracts, the type of which will be individually chosen by each Participant from a list of types of investment media (currently five selections). Each Participant's deferred compensation account will be adjusted to reflect the investment experience of the selected mutual funds or contracts, including any appreciation or depreciation. The Company is not required to actually invest the deferred compensation in the types of funds specified by Participants. The Obligations will be distributed by the Company in accordance with the terms of the Executive Deferral Plan and upon a payment eligibility date selected by the Participant. Distributions shall be made either in installments or lump-sum payments depending on the timing of the payment eligibility date in relation to the following circumstances: length of service with the Company, termination of employment, and death or disability of the Participant. In the event that the Participant elects early distribution of his deferred compensation account, such early distribution shall bear a 10% penalty. The Company may accelerate the date of distribution due to certain specified "Unforeseeable Emergencies" and in accordance with uniform rules. A Participant's right or the right of any other person to the Obligations cannot be assigned, alienated, sold, garnished, transferred, pledged, or encumbered. If any Participant attempts to alienate, sell, transfer, pledge or encumber any distribution or payment from the Executive Deferral Plan, the Company may cancel such distribution or payment, or any part thereof. A committee shall be appointed by the Board of Directors of the Company and shall be charged with the general administration of the Executive Deferral Plan and the Obligations. The Obligations are not convertible into another security of the Company. The Obligations will not have the benefit of a negative pledge or any other affirmative or negative covenant on the part of the Company. No trustee has been appointed having the authority to take action with respect to the Obligations and each employee participant will be responsible for acting independently with respect to, among other things, the giving of notices, responding to any requests for consents, waivers or amendments pertaining to the Obligations, enforcing covenants and taking action upon a default. (b) Obligations under the Deferred Compensation Plan Under the Deferred Compensation Plan, the Company will provide a select group of management and highly compensated employees at the director level and above, excluding those employees eligible for the Executive Deferral Plan (the "Deferred Compensation Employees"), the opportunity to enter into agreements for the deferral of a specified percentage of their cash compensation. The obligations of the Company under such agreements (the "Deferred Compensation Obligations") will be unsecured general obligations of the Company to pay the deferred compensation in the future in accordance with the terms of the Deferred Compensation Plan and will rank pari passu with other unsecured and unsubordinated indebtedness of the Company from time to time outstanding. 4 To participate in the Deferred Compensation Plan in a particular year, the Deferred Compensation Employee must enroll in the Deferred Compensation Plan and select the percentage of deferral before the beginning of that calendar year. The amount of compensation to be deferred by each participating employee ("Deferred Compensation Participant") will be determined in accordance with the Deferred Compensation Plan based on elections by the employee. Deferred Compensation Participants may elect to defer up to 6% of salary under the Deferred Compensation Plan. The Deferred Compensation Obligations will be indexed to one or more mutual funds or contracts, the type of which will be individually chosen by each Deferred Compensation Participant from a list of types of investment media (currently three selections). Each Deferred Compensation Participant's deferred compensation account will be adjusted to reflect the investment experience of the selected mutual funds or contracts, including any appreciation or depreciation. Gains or losses are posted to the Deferred Compensation Participant's account at the end of every quarter. The Company is not required to actually invest the deferred compensation in the types of funds specified by the Deferred Compensation Participants. The Deferred Compensation Obligations will be distributed by the Company in accordance with the terms of the Deferred Compensation Plan and upon the following circumstances: upon termination of employment, death or long term disability or in the event of financial hardship involving the payment of major medical expenses or prevention of eviction or foreclosure of a mortgage. A Participant's right or the right of any other person to the Deferred Compensation Obligations cannot be assigned, alienated, sold, garnished, transferred, pledged, or encumbered. A committee shall be appointed by the Board of Directors of the Company and shall be charged with the general administration of the Deferred Compensation Plan and the Deferred Compensation Obligations. The Deferred Compensation Obligations are not convertible into another security of the Company. The Deferred Compensation Obligations will not have the benefit of a negative pledge or any other affirmative or negative covenant on the part of the Company. No trustee has been appointed having the authority to take action with respect to the Deferred Compensation Obligations and each employee participant will be responsible for acting independently with respect to, among other things, the giving of notices, responding to any requests for consents, waivers or amendments pertaining to the Deferred Compensation Obligations, enforcing covenants and taking action upon a default. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. Not applicable. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 317 of the California General Corporation Law and Section 7.06 of the Company's bylaws ("Bylaws") provide for the indemnification of directors, officers and "agents" (as defined in Section 317 of the California General Corporation Law) under certain circumstances. The Bylaws grant the Company the power to indemnify its directors, officers and "agents" under certain circumstances to the extent permitted by California law against certain expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any proceeding arising by reason of their positions as directors, officers or "agents." Pursuant to California law and the Company's Bylaws, the Company is required to indemnify directors, officers and "agents" against expenses actually and reasonably incurred to the extent that such party is successful on the merits in defense of certain proceedings. Section 204(a)(11) of the California General Corporation Law provides for the indemnification, subject to certain limitations, of directors, officers and "agents" for breach of their duty to a corporation and its shareholders in excess of that expressly permitted by Section 317 of the California General Corporation Law. On December 6, 1988, the Company's Articles of Incorporation were amended implementing Section 204(a)(11) of the California General Corporation Law. Section 317 of the California General Corporation Law also provides that a corporation shall have the power to purchase and maintain insurance on behalf of any agent of the corporation against any liabilities asserted against or incurred by the agent in such capacity. The Company maintains a director's and officer's liability insurance policy insuring the Company's directors and officers against certain liabilities and expenses incurred by 5 them in their capacities as such, and insuring the Company under certain circumstances in the event that indemnification payments are made by the Company to such directors and officers. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. Not Applicable. ITEM 8. EXHIBITS. 4.1 Williams-Sonoma, Inc. Executive Deferral Plan 4.2 Williams-Sonoma, Inc. Deferred Compensation Plan 5.1 Opinion of Irell & Manella as to the legality of the Obligations and the Deferred Compensation Obligations 24.1 Consent of Deloitte & Touche, LLP 24.2 Consent of Irell & Manella (included in Exhibit 5.1) 25 Power of Attorney (included on pages 7 and 8 of this Registration Statement) ITEM 9. UNDERTAKINGS. (a) Rule 415 Offering. The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; (iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in this registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) Filings incorporating subsequent Exchange Act documents by reference. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered 6 herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Request for acceleration of effectiveness or filing of registration statement on Form S-8. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. 7 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8, and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Francisco, State of California, on the 30th day of June, 1995. WILLIAMS-SONOMA, INC. By: \s\ Russell Solt ---------------------------------------------- Russell Solt Senior Vice President, Chief Financial Officer and Secretary POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints W. Howard Lester, Patrick J. Connolly and Russell Solt, or any of them, his attorneys-in-fact and agents, each with full power of substitution for him and in his name, place and stead, in any and all capacities, to sign any or all amendments to this Registration Statement, and to file the same with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto each of said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection with this Registration Statement, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that any of said attorneys-in-fact and agents, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the date indicated.
Signature Title Date --------- ----- ---- /s/ W. Howard Lester Chairman of the Board and Chief June 30, 1995 - --------------------- Executive Officer (principal W. Howard Lester executive officer) /s/ Russell Solt Senior Vice President, Chief June 30, 1995 - --------------------- Financial Officer and Secretary Russell Solt (principal financial and accounting officer) /s/ Patrick J. Connolly Director and Senior Vice President June 30, 1995 - --------------------- Patrick J. Connolly /s/ Gary G. Friedman Director and Executive Vice June 30, 1995 - --------------------- President Gary G. Friedman /s/ Charles E. Williams Vice Chairman and Director June 30, 1995 - --------------------- Charles E. Williams
8 /s/ Millard S. Drexler Director June 30, 1995 - --------------------- Millard S. Drexler /s/ F. Warren Hellman Director June 30, 1995 - --------------------- F. Warren Hellman /s/ James A. McMahan Director June 30, 1995 - --------------------- James A. McMahan /s/ John E. Martin Director June 30, 1995 - --------------------- John E. Martin
9 EXHIBIT INDEX
Exhibit Description ------- ----------- 4.1 Williams-Sonoma, Inc. Executive Deferral Plan 4.2 Williams-Sonoma, Inc. Deferred Compensation Plan 5.1 Opinion of Irell & Manella as to the legality of the Obligations and Deferred Compensation Obligations 24.1 Consent of Deloitte & Touche, LLP 24.2 Consent of Irell & Manella (included in Exhibit 5.1) 25 Power of Attorney (included on pages 7 and 8 of this Registration Statement)
EX-4.1 2 EXECUTIVE DEFERRAL PLAN 1 Exhibit 4.1 Williams-Sonoma, Inc. Executive Deferral Plan 2 WILLIAMS-SONOMA, INC. EXECUTIVE DEFERRAL PLAN TABLE OF CONTENTS
Page ---- ARTICLE I TITLE AND DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ARTICLE II PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 ARTICLE III DEFERRAL ELECTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 ARTICLE IV DEFERRAL ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 ARTICLE V VESTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 ARTICLE VI DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 ARTICLE VII ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3 WILLIAMS-SONOMA, INC. EXECUTIVE DEFERRAL PLAN WHEREAS, Williams-Sonoma, Inc. (the "Company") desires to establish a deferred compensation plan to provide supplemental retirement income benefits for a select group of management and highly compensated employees through deferrals of salary and bonuses, effective as of July 1, 1995; and WHEREAS, it is believed that the adoption of this plan providing for deferred compensation at the election of each executive will be in the best interests of the Company; NOW THEREFORE, it is hereby declared as follows: ARTICLE I TITLE AND DEFINITIONS 1.1 - Title. This Plan shall be known as the Williams-Sonoma, Inc. Executive Deferral Plan. 1.2 - Definitions. Whenever the following words and phrases are used in this Plan, with the first letter capitalized, they shall have the meanings specified below. "Account" shall mean a Participant's Deferral Account. "Beneficiary" or "Beneficiaries" shall mean the person or persons, including a trustee, personal representative or other fiduciary, last designated in writing by a Participant in accordance with procedures established by the Committee to receive the benefits specified hereunder in the event of the Participant's death. No beneficiary designation shall become effective until it is filed with the Committee. If there is no Beneficiary designation in effect, or if there is no surviving designated Beneficiary, then the Participant's surviving spouse shall be the Beneficiary. If there is no surviving spouse to receive any benefits payable in accordance with the preceding sentence, the duly appointed and currently acting personal representative of the participant's estate (which shall include either the Participant's probate estate or living trust) shall be the Beneficiary. In any case where there is no such personal representative of the Participant's estate duly appointed and acting in that capacity 4 within 90 days after the Participant's death (or such extended period as the Committee determines is reasonably necessary to allow such personal representative to be appointed, but not to exceed 180 days after the Participant's death), then Beneficiary shall mean the person or persons who can verify by affidavit or court order to the satisfaction of the Committee that they are legally entitled to receive the benefits specified hereunder. In the event any amount is payable under the Plan to a minor, payment shall not be made to the minor, but instead be paid (a) to that person's living parent(s) to act as custodian, (b) if that person's parents are then divorced, and one parent is the sole custodial parent, to such custodial parent, or (c) if no parent of that person is then living, to a custodian selected by the Committee to hold the funds for the minor under the Uniform Transfers or Gifts to Minors Act in effect in the jurisdiction in which the minor resides. If no parent is living and the Committee decides not to select another custodian to hold the funds for the minor, then payments shall be made to the duly appointed and currently acting guardian of the estate for the minor or, if no guardian of the estate for the minor is fully appointed and currently acting within 60 days after the date the amount becomes payable, payments shall be deposited with the court having jurisdiction over the estate of the minor. "Board of Directors" or "Board" shall mean the Board of Directors of the Company. "Bonus" shall mean any incentive compensation payable to a Participant in addition to the Participant's Salary. "Code" shall mean the Internal Revenue Code of 1986, as amended. "Committee" shall mean the Committee appointed by the Board to administer the Plan in accordance with Article VII. "Company" shall mean Williams-Sonoma, Inc., any successor corporation and each corporation which is a member of a controlled group of corporations (within the meaning of Section 414(b) of the Code) of which Williams-Sonoma, Inc. is a component member. "Compensation" shall mean the Salary and Bonus that the Participant is entitled to for services rendered to the Company. "Deferral Account" shall mean the bookkeeping account maintained by the Committee for each Participant that is credited with amounts equal to (1) the portion of the Participant's Salary that he or she elects to defer, (2) the portion of the 5 Participant's Bonus that he or she elects to defer, and (3) interest pursuant to Section 4.1. "Distributable Amount" shall mean the amount credited to a Participant's Deferral Account. "Effective Date" shall mean July 1, 1995. "Eligible Employee" shall mean each member of a group of select management or highly compensated employees of the Company who is selected by the Board to participate in the Plan. "Fund" or "Funds" shall mean one or more of the mutual funds or contracts selected by the Committee pursuant to Section 3.2(b). "Initial Election Period" for an Eligible Employee shall mean the 30-day period following the later of June 1, 1995 or the Eligible Employee's date of hire. "Insurable Participant" shall mean a Participant who satisfies underwriting standards for the issuance of life insurance determined by the insurance company selected by the Company to provide the pre-distribution death benefit described in Article VII. "Interest Rate" shall mean, for each Fund, an amount equal to the net rate of gain or loss on the assets of such Fund during each month. "Participant" shall mean any Eligible Employee who elects to defer Compensation in accordance with Section 3.1. "Payment Eligibility Date" shall mean the date specified by the Participant prior to the Effective Date or, if later, within 30 days of the date on which such person becomes a Participant, or if no date is so specified, the first day of the month following the calendar quarter in which a Participant terminates employment or dies. "Plan" shall mean the Williams-Sonoma, Inc. Executive Deferral Plan set forth herein, now in effect, or as amended from time to time. "Plan Year" shall mean the 12 consecutive month period beginning January 1, and ending December 31, except that the first Plan Year shall be a short year beginning July 1, 1995 and ending December 31, 1995. 6 "Salary" shall mean the Participant's base pay. ARTICLE II PARTICIPATION 2.1 - Participation. An Eligible Employee shall become a Participant in the Plan by electing to defer all or a portion of his or her Compensation in accordance with Section 3.1, by completing an application for the life insurance benefit described in Article VII, and complying with various medical underwriting requirements of the insurance company. ARTICLE III DEFERRAL ELECTIONS 3.1 - Elections to Defer Compensation. (a) Initial Election Period. Each Eligible Employee may elect to defer Compensation by filing with the Committee an election that conforms to the requirements of this Section 3.1, on a form provided by the Committee, no later than the last day of his or her Initial Election Period. (b) General Rule. Subject to the limitations set forth in paragraph (c) below, the amount of Compensation which an Eligible Employee may elect to defer is as follows: (1) Any percentage of Salary up to 50%; and/or (2) Any percentage or dollar amount of Bonus up to 100%; provided, however, that no election shall be effective to reduce the Compensation paid to an Eligible Employee for a calendar year to an amount which is less than the Social Security Wage Base for such calendar year. Until an Eligible Employee (other than an Eligible Employee who has been determined not to be an Insurable Participant) completes an application for the death benefit described in Article VI, any deferral election made by the Eligible Employee pursuant to Section 3.1 hereof shall be void. 7 (c) Minimum Deferrals. For each calendar year during which the Eligible Employee is a Participant, the minimum percentage which may be elected under paragraph (b)(1) of this Section 3.1 is 5%. This 5% minimum deferral for any calendar year may be reduced to a lessor percentage (but not below zero percent) if the Participant deferred any portion of his or her Bonus paid in the preceding calendar year. The amount of such reduction shall be the number of percentage points determined by (1) dividing the amount of the bonus deferred in such preceding calendar year by the amount of the Participant's annual Salary at the beginning of the calendar year to which the minimum deferral applies and (2) multiplying by 100. (d) Effect of Initial Election. An election to defer Compensation during an Initial Election Period shall be effective with respect to Salary earned during the first pay period beginning after the Initial Election and to the Bonus payable for the Company s fiscal year ending within the Plan Year in which the election is made. (e) Duration of Salary Deferral Election. Any Salary deferral election made under paragraph (a) or paragraph (g) of this Section 3.1 shall remain in effect, notwithstanding any change in the Participant's Salary, until changed or terminated in accordance with the terms of this paragraph (e); provided, however, that such election shall terminate for any Plan Year for which the Participant is not an Eligible Employee. Subject to the minimum deferral requirement of Section 3.1(c) and the limitations of Section 3.1(b), a Participant may increase, decrease or terminate his or her Salary deferral election, effective for Salary earned during pay periods beginning after any January 1, by filing a new election, in accordance with the terms of this Section 3.1, with the Committee on or before the preceding December 1. (f) Duration of Bonus Deferral Election. Any Bonus deferral election made under paragraph (a) or paragraph (g) of this Section 3.1 shall be irrevocable and shall apply only to the Bonus payable with respect to services performed during the Plan Year for which the election is made. For each subsequent Plan Year, an Eligible Employee may make a new election, subject to the limitations set forth in this Section 3.1, to defer a percentage of his or her Bonus. Such election shall be on forms provided by the Committee and shall be made on or before the December 1 preceding the Plan Year for which the election is to apply. Notwithstanding anything in paragraphs (a), (d), (g) or this paragraph (f) of this Section 3.1 to the contrary, for the first Plan year only, an Eligible Employee may elect, no later than June 30, 1995, to defer any Bonus which is subsequently declared and paid for the Company's fiscal year ending on December 31, 1995. 8 (g) Elections other than Elections during the Initial Election Period. Subject to the limitations of paragraph (c) above, any Eligible Employee who fails to elect to defer compensation during his or her Initial Election Period may subsequently become a Participant, and any Eligible Employee who has terminated a prior Salary deferral election may elect to again defer Salary, by filing an election, on a form provided by the Committee, to defer Compensation as described in paragraph (b) above. An election to defer Salary and/or Bonus must be filed on or before December 1 and will be effective for Salary earned during pay periods beginning after the following January 1 and the Bonus paid with respect to services performed in the Plan Year beginning on the following January 1. 3.2 Investment Elections. (a) At the time of making the deferral elections described in Section 3.1, the Committee shall provide each Participant with a list of the types of mutual funds available for hypothetical investment, and the Participant shall designate, on a form provided by the Committee, one or more of such types of funds that his or her account will be deemed to be invested in for purposes of determining the amount of earnings to be credited to that account. The Committee shall, from time to time, in its sole discretion select a commercially available fund or contract for each of such types to constitute the Fund actually selected. The Interest Rate of each such commercially available fund or contract shall be used to determine the amount of earnings to be credited to Participants' Accounts under Article IV. In making the designation pursuant to this Section 3.2, the Participant may specify that all or any 10% multiple of his or her Deferral Account be deemed to be invested in one or more of the types of mutual funds offered by the Committee. Effective as of the end of any calendar quarter, a Participant may change the designation made under this Section 3.2 by filing an election, on a form provided by the Committee, at least 30 days prior the end of such quarter. If a Participants fails to elect a type of fund under this Section 3.2, he or she shall be deemed to have elected the Money Market Fund. The Company may, but need not, acquire investments corresponding to those designated by the Participants hereunder, and it is not under any obligation to maintain any investment it may make. Any such investments, if made, shall be in the name of the Company, and shall be its sole property in which no Participant shall have any interest. 9 ARTICLE IV DEFERRAL ACCOUNT 4.1 - Deferral Account. The Committee shall establish and maintain a Deferral Account for each Participant under the Plan. Each Participant's Deferral Account shall be further divided into separate subaccounts ("mutual fund subaccounts"), each of which corresponds to a mutual fund or contract elected by the Participant pursuant to Section 3.2(a). A Participant's Deferral Account shall be credited as follows: (a) As of the last day of each month, the committee shall credit the mutual fund subaccounts of the Participant's Deferral Account with an amount equal to Salary deferred by the Participant during each pay period ending in that month in accordance with the Participant's election under Section 3.2(a); that is, the portion of the Participant's deferred Salary that the Participants has elected to be deemed to be invested in a certain type of mutual fund shall be credited to the mutual fund subaccount corresponding to that mutual fund. (b) As of the last day of the month in which the Bonus or partial Bonus would have been paid, the Committee shall credit the mutual fund subaccounts of the Participant's Deferral Account with an amount equal to the portion of the Bonus deferred by the Participant's election under Section 3.2(a); that is, the portion of the Participant's deferred Bonus that the Participant has elected to be deemed to be invested in a certain type of mutual fund shall be credited to the mutual fund subaccount corresponding to that mutual fund. (c) As of the last day of each month, each mutual fund subaccount of a Participant's Deferral Account shall be credited with earnings in an amount equal to that determined by multiplying the balance credited to such mutual fund subaccount as of the last day of the preceding month by the Interest Rate for the corresponding Fund selected by the Company pursuant to Section 3.2(b). 10 ARTICLE V VESTING 5.1 - Deferral Account. A Participant's Deferral Account shall be 100% vested at all times. 11 ARTICLE VI DISTRIBUTIONS 6.1 - Distribution of Deferred Compensation. (a) In the case of a Participant, who either (i) terminates employment with the Company as a result of long-term disability (as defined in the Company's long-term disability plan for executives), or (ii) who establishes a Payment Eligibility Date that occurs after the Participant attains 55 years of age with a minimum of five years of service, the Distributable Amount shall be paid to the Participant (and after his death to his or her beneficiary) in the form of substantially equal quarterly installments over 15 years beginning on his or her Payment Eligibility Date. Notwithstanding the foregoing, a Participant described in the preceding sentence may elect one of the following optional forms of distribution provided that his or her election is filed with the Committee within 30 days prior to the Effective Date or, if later, within 30 days of the date the Eligible Employee first becomes a Participant: (1) a cash lump sum payable on the Participant's Payment Eligibility Date, and (2) substantially equal quarterly installments over five or ten years beginning on the Participant's Payment Eligibility Date. Notwithstanding the foregoing, a Participant described above may change his or her form of distribution to one of the optional forms listed above provided that his or her election is filed with the Committee at least three years prior to his or Payment Eligibility Date. Notwithstanding this subsection, if the Distributable Amount is $10,000 or less, the Distributable Amount shall automatically be distributed in the form of a cash lump sum on the Participant's Payment Eligibility Date. The Participant's Accounts shall continue to be credited monthly with earnings pursuant to Section 4.1 of the Plan until all amounts credited to his or her Accounts under the Plan have been distributed. For all purposes under this Plan, a Participant shall not be considered terminated from employment if the Participant remains employed by a member of the Company's controlled group of corporations (within the meaning of Section 414(b) of the Code), even if such member is not a Company. However, if the Employee is employed by a Company or a member of its controlled group and such entity ceases to be a member of such controlled group as a result of a sale or other corporate reorganization, such sale or other corporate reorganization shall be treated as termination of employment 12 unless immediately following such event and without any break in employment the Participant remains employed by the Company or another corporation which is a member of its controlled group of corporations or the former member of the controlled group assumes liability for the benefits of the Participant. (b) In the case of a Participant whose Payment Eligibility Date occurs prior to the date on which the Participant attains age 55 and a minimum of 5 years of service and for reasons other than a long term disability or death, the Distributable Amount shall be paid to the Participant in the form of a cash lump sum on the Participant s Payment Eligibility Date. (c) In the case of a Participant who dies while employed by the Company, the following benefits shall be provided: (1) That portion of the death benefit of any life insurance policy purchased by the Company to insure the life of the Participant (the "Policy") which is equal to two times the Participant's annual Salary at the time the Participant dies shall be paid to Participant's beneficiary under the Policy by the insurance company which issued the Policy. Any such Policy shall be subject to the conditions set forth in a "Split-Dollar Life Insurance Agreement" between the Participant and the Company, pursuant to which the Participant may designate a beneficiary with respect to the portion of the Policy proceeds described in the preceding sentence in the event the Participant dies prior to terminating employment with the Company. The Participant shall have the right to designate and change such beneficiary (which need not be his Beneficiary as determined under Section 1.2 hereof) at any time on a form provided by and filed with the insurance company, and the life insurance proceeds designated in this paragraph (1) shall be paid to such beneficiary. The benefit payable pursuant to this paragraph (1) shall be paid only if a Policy has been issued on the Participant's life and is in force at the time of the Participant's death and any such payment shall be subject to all conditions and exceptions set forth in the Policy. A Participant who is entitled to a death benefit pursuant to this paragraph shall not be entitled to any other Company-paid group term life insurance benefits from the Company under this Plan or any other Policy provided by the Company. Notwithstanding any provision of this Plan or any other document to the contrary, the Company shall not have any obligation to pay the Participant or his Beneficiary any amounts described in this Section 6.1(c). Any such amounts shall be payable solely from the proceeds of the Policy, and if no Policy is in force, no payment shall be made. Furthermore, the Company is not obligated to maintain any Policy; and no death benefit shall be payable hereunder if the Company has been notified by the 13 Committee to discontinue the Policy for the Participant. In addition, no Policy shall be allocated to any Account. (2) The Distributable Amount shall be paid to the Participant's Beneficiary in a lump sum. 6.2 - Early Distributions. Participant shall be permitted to elect to withdraw amounts from their Accounts prior to termination of employment with the Company ("Early Distributions"), subject to the following restrictions: (a) The election to take an Early Distribution shall be made by filing a form provided by and filed with the Committee prior to the end of any calendar month. (b) The amount of the Early Distribution shall in all cases equal 90% of the Distributable Amount as of the end of the calendar month as of which the distribution is to be made. (c) The amount described in subsection (b) above shall be paid in a single cash lump sum as soon as practicable after the end of the calendar month in which the Early Distribution election is made. (d) If a Participant receives an Early Distribution, the remaining balance of his or her Accounts (10% of the Distribution Amount) shall be permanently forfeited and the Company shall have no obligation to the Participant or his Beneficiary with respects to such forfeited amount. (e) If a Participant receives an Early Distribution, the following rules will apply for the balance of the Plan Year and for the following Plan Year: (i) the Participant will be ineligible to Participate in the Plan and (ii) neither the Participant (nor his Beneficiary or Beneficiaries) shall be entitled to death benefits under Section 6.1(c)(1) or (2). (f) A Participant will be limited to a maximum of two Early Distributions during all of his periods of Plan Participation. 6.3 - Unforeseeable Emergency. The Committee may, pursuant to rules adopted by it and applied in a uniform manner, accelerate the date of distribution of a Participant's Account because of an Unforeseeable Emergency at any time. "Unforeseeable Emergency" shall mean an 14 unforeseeable, severe financial condition resulting from (a) a sudden and unexpected illness or accident of the Participant or his dependent (as defined in Section 152(a) of the Code); (b) loss of the Participant's property due to casualty; or (c) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, but which may not be relieved through other available resources of the Participant, as determined by the Committee in accordance with uniform rules adopted by it. Distribution pursuant to this subsection of less than the Participant's entire interest in the Plan shall be made pro rata from his assumed investments according to the balances in such investments. Subject to the foregoing, payment of any amount with respect to which a Participant has filed a request under this subsection shall be made as soon as practicable after approval of such request by the Committee. 6.4 - Inability To Locate Participant. In the event that he Committee is unable to locate a Participant or Beneficiary within two years following the Participant's Payment Eligibility Date, the amount allocated to the Participant's Deferral Account shall be forfeited. If, after such forfeiture, the Participant or Beneficiary later claims such benefit, such benefit shall be reinstated without interest or earnings. 15 ARTICLE VII ADMINISTRATION 7.1 - Committee. A Committee shall be appointed by, and serve at the pleasure of, the Board of Directors. The number of members comprising the committee shall be determined by the Board which may from time to time vary the number of members. A member of the Committee may resign by delivering a written notice of resignation to the Board. The Board may remove any member by delivering a certified copy of its resolution of removal to such member. Vacancies in the membership of the Committee shall be filled promptly by the Board. 7.2 - Committee Action. The Committee shall act at meetings by affirmative vote of a majority of the members of the Committee. Any action permitted to be taken at a meeting may be taken without a meeting if, prior to such action, a written consent to the action is signed by all members of the Committee and such written consent if filed with the minutes of the proceedings of the Committee. A member of the Committee shall not vote or act upon any matter which relates solely to himself or herself as a Participant. The Chairman or any other member or members of the Committee designated by the Chairman may execute any certificate or other written direction on behalf of the Committee. 7.3 - Powers and Duties of the Committee. (a) The Committee, on behalf of the Participants and their Beneficiaries, shall enforce the Plan in accordance with the terms, shall be charged with the general administration of the Plan and shall have all powers necessary to accomplish its purposes, including, but not by way of limitation, the following: (1) To select the funds or contracts to be the Funds in accordance with Section 3.2(b) hereof; (2) To construe and interpret the terms and provisions of this Plan; (3) To compute and certify to the amount and kind of benefits payable to Participants and their Beneficiaries; (4) To maintain all records that may be necessary for the administration of the Plan; 16 (5) To provide for the disclosure of all information and the filing or provision of all reports and statements to Participants, Beneficiaries or governmental agencies as shall be required by law; (6) To make and publish such rules for the regulation of the Plan and procedures for the administration of the Plan as are not inconsistent with the terms hereof; and (7) To appoint a plan administrator or any other agent, and to delegate to them such powers and duties in connection with the administration of the Plan as the Committee may from time to time prescribe. 7.4 - Construction and Interpretation. The Committee shall have full discretion to construe and interpret the terms and provisions of this Plan, which interpretation or construction shall be final and binding on all parties, including but not limited to the Company and any Participant or Beneficiary. The Committee shall administer such terms and provisions in a uniform and nondiscriminatory manner and in full accordance with any and all laws applicable to the Plan. 7.5 - Information To enable the Committee to perform its functions, the Company shall supply full and timely information to the Committee on all matters relating to the Compensation of all Participants, their death or other cause of termination, and such other pertinent facts as the Committee may require. 7.6 - Compensation, Expenses and Indemnity. (a) The members of the Committee shall serve without compensation for their services hereunder. (b) The Committee is authorized at the expense of the Company to employ such legal counsel as it may deem advisable to assist in the performance of its duties hereunder. Expenses and fees in connection with the administration of the Plan shall be paid by the Company. (c) To the extent permitted by applicable state law, the Company shall indemnify and save harmless the Committee and each member thereof, the Board of Directors and any delegate of the Committee who is an employee of the Company 17 against any and all expenses, liabilities and claims, including legal fees to defend against such liabilities and claims arising out of their discharge in good faith of responsibilities under or incident to the Plan, other than expenses and liabilities arising out of willful misconduct. This indemnity shall not preclude such further indemnities as may be available under insurance purchased by the Company or provided by the Company under any bylaw, agreement or otherwise, as such indemnities are permitted under state law. 7.7 - Quarterly Statements. Under procedures established by the Committee, a Participant shall receive a statement with respect to such Participant's Account on a periodic basis at least once with respect to each Plan Year. 18 ARTICLE VIII MISCELLANEOUS 8.1 - Unsecured General Creditor. Participants and their Beneficiaries, heirs, successors, and assigns shall have no legal or equitable rights, claims, or interests in any specific property or assets of the Company. No assets of the Company shall be held under any trust, or held in any way as collateral security for the fulfilling of the obligations of the Company under this Plan. Any and all of the Company's assets shall be, and remain, the general unpledged, unrestricted assets of the Company. The Company's obligation under the Plan shall be merely that of an unfunded and unsecured promise of the Company to pay money in the future, and the rights of the Participants and Beneficiaries shall be no greater than those of unsecured general creditors. 8.2 - Restriction Against Assignment. The Company shall pay all amounts payable hereunder only to the person or persons designated by the Plan and not to any other person or corporation. No part of a Participant's Account shall be liable for the debts, contracts, or engagements of any Participant, his or her Beneficiary, or successors in interest, nor shall a Participant's Account be subject to execution by levy, attachment, or garnishment or by any other legal or equitable proceeding, nor shall any such person have any right to alienate, anticipate, commute, pledge, encumber, or assign any benefits or payments hereunder in any manner whatsoever. If any Participant, Beneficiary or successor in interest is adjudicated bankrupt or purports to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge any distribution or payment from the Plan, voluntarily or involuntarily, the Committee, in its discretion, may cancel such distribution or payment (or any part thereof) to or for the benefit of such Participant, Beneficiary or successor in interest in such manner as the Committee shall direct. 8.3 - Withholding. There shall be deducted from each payment made under the Plan all taxes which are required to be withheld by the Company in respect to such payment. The Company shall have the right to reduce any payment by the amount of cash sufficient to provide the amount of said taxes. 8.4 - Amendment, Modification, Suspension or Termination. 19 The Company may amend, modify, suspend or terminate the Plan in whole or in part, except that no amendment, modification, suspension or termination shall have any retroactive effect to reduce any amounts allocated to a Participant's Account. In the event that this Plan is terminated, the disposition of the amounts credited to a Participant's Deferral Account shall be at the sole discretion of the Committee. 8.5 - Governing Law. This Plan shall be construed, governed and administered in accordance with the laws of the State of California. 8.6 - Receipt or Release. Any payment to a Participant or the Participant's Beneficiary in accordance with the provisions of the Plan shall, to the extent thereof, be in full satisfaction of all claims against the Committee and the Company. The Committee may require such Participant or Beneficiary, as a condition precedent to such payment, to execute a receipt and release to such effect. 8.7 - Payments on Behalf of Persons Under Incapacity. In the event that any amount becomes payable under the Plan to a person who, in the sole judgment of the Committee, is considered by reason of physical or mental condition to be unable to give a valid receipt therefore, the Committee may direct that such payment be made to any person found by the Committee, in its sole judgment, to have assumed the care of such person. Any payment made pursuant to such determination shall constitute a full release and discharge of the Committee and the Company. 8.8 - No Employment Rights Neither participation in this Plan nor coverage under any Policy shall confer upon any person any right to be employed by the Company nor any other right not expressly provided hereunder, under the Policy or under the Split-Dollar Life Insurance Agreement executed in connection therewith. 8.9 - Headings, etc. Not Part of Agreement. 20 Headings and subheadings in this Plan are inserted for convenience of reference only and are not to be considered in the construction of the provisions hereof. IN WITNESS WHEREOF, the Company has caused this document to be executed by its duly authorized officer on this ____________ day of ______________, 1995. WILLIAMS-SONOMA, INC. By __________________________________ By __________________________________ 21 SPLIT-DOLLAR LIFE INSURANCE AGREEMENT This Agreement is entered into as of __________, 19__ by and between Williams-Sonoma, Inc., (the "Company") and __________________ ("Employee") in reference to the following facts: 1. Employee is a valued employee of Williams-Sonoma, Inc. 2. The Company has simultaneously with the execution of this Agreement caused the AETNA Life Insurance and Annuity Company (the "Insurance Company") to issue policy number __________________ (the "Policy") on the life of Employee. The first annual premium has been paid by the Company as of the date of this Agreement. 3. The Policy is issued in conjunction with the Employee becoming a Participant in the Williams-Sonoma, Inc. Executive Deferral Plan (the "Plan") and in order to provide to the beneficiaries of the Employee the death benefit described in Section 6.1(c)(1) of the Plan. Capitalized terms not defined herein are defined in accordance with the Plan. 4. For purposes of this Agreement, the Company and its subsidiaries which have adopted the Plan shall constitute the "Employer." For this purpose, a subsidiary is a corporation which is a member of a controlled group of corporations (within the meaning of Section 414(b) of the Internal Revenue Code of 1986, as amended (the "Code")) of which the Company is a member. If Employee is employed by a corporation which, as a result of a sale or other corporate reorganization, ceases to be a member of such controlled group, such sale or other corporate reorganization shall be treated as a termination of Employee by Employer unless immediately following the event and without any break in employment the Employee remains employed by the Company or another corporation which is a member of its controlled group of corporations that has adopted the Plan or the former member of the controlled group assumes liability for Participant's benefits under the Plan. NOW THEREFORE, in consideration of the facts set forth above and the various promises and covenants set forth below, the parties to this Agreement agree as follows: 1. Ownership of Policy. The Employee acknowledges that the Company is the owner of the Policy and is entitled to exercise all of its ownership rights granted by the terms of the Policy, except to the extent that the power of the Company to exercise those rights is specifically limited by this Agreement. Except as so limited, it is the expressed intention of the parties to reserve to the Company (as directed by the Committee) all rights in and to the Policy granted to its owner by the terms thereof. Employee acknowledges that the Company is not obligated to maintain the Policy. 2. Premium payments. Subject to Section 5, so long as the Policy remains in force and Employee is employed by the Employer, the Company agrees to pay an annual premium on the Policy on or before the last day of each "policy year" (as such term is used in the 22 Policy) in an amount equal to the "cost of insurance" (as defined in the Policy) needed to fund the Employee s death benefit described in Section 3 below. In addition, the Company may pay as an additional premium under the policy in any policy year an amount equal to all or part of the Compensation deferred by Employee under the Plan during the pay periods ending during such policy year. 3. Death of Employee while employed by Employer. (a) Subject to this Section 3 and Section 5, Employee's designated beneficiary shall be entitled to receive as a death benefit an amount equal to the amount set forth in Section 6(c)(1) of the Plan, as amended in the sole discretion of the Company (but not in excess of the total proceeds under the Policy). As of the date hereof, the death benefit equals two times the Salary in effect at the time the Participant dies. The amount described in the preceding sentence shall be paid solely from the proceeds of the Policy; to the extent that the death benefit under the policy exceeds the amount payable to Employee's beneficiary, the balance of the death benefit shall be payable to the Company; to the extent the death benefit under the Policy is less than the amount payable to Employee s beneficiary, the amount payable to Employee s beneficiary shall be limited to the total death benefit payable from the Policy. The designation of beneficiaries under the Policy shall be in accordance with this Section. (b) Employee agrees that, during the period of this Agreement, Employee will obtain and provide to the Company and/or the Insurance Company the written consent of the spouse of the Employee, in the form attached hereto as Exhibit B, to any designation by Employee of anyone other than the Employee's spouse as the beneficiary to receive the benefits under this Section 3. (c) Employee acknowledges and agrees that if a death benefit is payable pursuant to Section 6.1(c)(1) of the Plan, Employee's beneficiaries shall not be entitled to any other group term life insurance benefits from the Company under this Plan or any other policy provided by the Company. (d) Employee acknowledges that the Company is not obligated to maintain the Policy. Employee also acknowledges that no death benefit hereunder (or under the Policy or Section 6.1(c)(1) of the Plan) is payable under the circumstances set forth in Section 5. 4. Policy Beneficiary Designation. Subject to Section 5, the rights to designate and change the beneficiary (and any settlement options) of the Policy are reserved to the Employee and the Company with respect to their respective shares of the Policy death proceeds as determined in Section 3(a) of this Agreement. Employee's beneficiary designation and incorporation of the amount of his or her share of the Policy death proceeds by reference, shall be recorded on the appropriate forms provided by the Insurance Company as an endorsement to the Policy as provided in Exhibit A to this Agreement. The parties hereto agree to take all action necessary to cause the beneficiary designation and settlement election provisions of the Policy to conform to the provisions hereof. The Company shall not terminate, alter or amend such designation or election of the 23 Employee without the express written consent of the Employee. 5. Termination of Employee's Rights. If (1) the employment of Employee with Employer is terminated for a reason other than death, (2) the Committee discontinues the Policy (which the Committee may do for any reason), or (3) the Participant is not entitled to a death benefit because he has taken an early distribution under Section 6.2 of the Plan, then (a) neither Employee nor his beneficiaries shall have any rights with respect to the Policy or benefits under the Policy and (b) nor the Company shall have any obligation to pay any premiums on the Policy. Any death benefits payable thereafter shall be payable to the Company, until such time, if any, that Employee again becomes eligible to receive a death benefit under Section 6.1(c)(1) of the Plan and has entered into another split-dollar life insurance agreement. Employee agrees to execute any and all documents which the Company deems necessary to provide that Employee is not a beneficiary of the Policy. 6. No Limitation on Company's Rights in Policy. The Company (as directed by the Committee) may sell, assign, transfer, surrender, pledge or cancel the Policy or borrow or withdraw the proceeds of the Policy without, in any such case, the consent of the Employee. 7. Tax Withholding. It is recognized by the parties that the rights of Employee in the Policy (as modified by the Agreement) may cause Employee to be treated under certain circumstances as in receipt of gross income. These circumstances may also impose upon the Company an obligation to deduct and withhold federal, state or local taxes. Unless Employee otherwise provides the Company the amounts it is required to withhold, Company may withhold from other compensation due Employee an amount which is equal to the amount of any federal, state or local taxes required to be withheld. 8. Amendment and Termination of Agreement. Except as provided below or in a written instrument signed by the Company, and Employee, this Agreement may not be canceled, amended, altered, or modified. The termination of this Agreement shall be the date of the earliest to occur of any of the following: (a) Employee's termination of employment with Employer for any reason other than death. (b) The death of Employee while employed by Employer, provided that the Insurance Company shall pay the death benefit to Employee's designated beneficiary in accordance with this Agreement. (c) The termination of the Plan by the Company or an amendment to the Plan by the Company which eliminates the death benefit set forth in Section 6.1(c)(1) of the Plan. Employee acknowledges that the Company has complete discretion to so terminate the Plan or eliminate or reduce the death benefit set forth in Section 6.1(c)(1) 24 of the Plan. 9. Notice under Agreement. Any notice, consent, or demand required or permitted to be given under the provisions of this Agreement by one party to another shall be in writing, signed by the party giving or making it, and may be given either by delivering it to such other party personally or by mailing it, by United States Certified mail, postage prepaid, to such party, addressed to its last known address as shown on the records of the Company. The date of such mailing shall be deemed the date of such mailed notice, consent, or demand. 10. Binding Agreement. This Agreement shall bind the parties hereto and their respective successors, heirs, executor, administrators, and transferees, and any Policy beneficiary. 11. No Employment Rights Neither execution of this Agreement, participation in the Plan, nor coverage under any Policy shall confer upon Employee any right to employment with the Company or any other right not expressly provided under the Agreement, the Plan, or the Policy. 12. Controlling Law. To the extent not governed by federal law, this Agreement and the right to the parties hereunder shall be controlled by the laws of the State of California. 13. Execution of Documents. The Company and Employee agree to execute any and all documents necessary to effectuate the terms of this Agreement. WILLIAMS-SONOMA, INC. By:___________________ Its:__________________ EMPLOYEE _____________________ EX-4.2 3 DEFERRED COMPENSATION PLAN 1 Exhibit 4.2 Williams-Sonoma, Inc. Deferred Compensation Plan 2 WILLIAMS-SONOMA, INC. DEFERRED COMPENSATION PLAN (Effective July 1, 1995) 1. Eligibility Certain highly compensated employees of Williams-Sonoma, Inc. (the "Corporation") who are director-level or above, excluding individuals eligible to participate in the Executive Deferral Plan, shall be eligible to participate in this Williams- Sonoma, Inc. Deferred Compensation Plan (the "Plan"). 2. Definitions Capitalized terms not otherwise defined in the Plan have the respective meanings set forth in the Williams-Sonoma, Inc. Employee Profit Sharing and Stock Incentive Plan. "Administrator" shall mean the Corporation. 3. Participation (a) Time and Form of Election. An eligible employee on November 1 of any calendar year may become a Participant in the Plan (a "Participant") as of the beginning of the next calendar year (or July 1, 1995, if later), by executing a written notice of election to participate and filing such notice with Human Resources at least 10 days prior to the beginning of such calendar year, or July 1, 1995, if applicable. Such notice shall direct that a portion (determined in accordance with Paragraph 4) of the Participant's Compensation, be credited to a Deferred Compensation Account maintained under the Plan as an unfunded book entry stated as a cash balance (the "Participant's Account"). Amounts so credited to the Participant's Account shall constitute "Participant Deferrals." (b) Duration of Election. An election to participate in the Plan shall continue in effect until the Participant elects to terminate such participation. Such election to terminate may be effective as of any pay period by filing written notice of termination with the Human Resources at least 15 days prior to the beginning of that pay period. Following such election, a Participant cannot participate in the Plan again until the beginning of the following calendar year. A Participant's election to participate in the Plan shall also be terminated effective as of the first of the month following the month in which it is determined that the Participant is no longer eligible to participate in the Plan. Any such termination shall be effective only with respect to the Participant's Compensation payable thereafter. Amounts credited to the Participant's Account prior to the effective date of termination shall not be effected by such termination and shall be distributed only in accordance with the terms of the Plan. (c) Adjustment of Amount Deferred. By written election filed with the Administrator at least 10 days prior to the beginning of the next calendar year, a Participant may elect to change the amount of Compensation to be credited to the Participant's Account commencing with such date. Amounts credited to the Participant's Account prior 3 to the effective date of such change shall not be effected by such change and shall be distributed only in accordance with the terms of the Plan. 4. Contributions to Participant's Account (a) Participant Deferrals. A Participant may elect to defer an amount, equal to a full percentage (from 1% to 6%) of such Participant's Compensation. (b) Vesting. Participant Deferrals, and all amounts accrued with respect thereto in accordance with Paragraph 5, shall be vested at the time such amounts are credited to the Participant's Account. 4 5. The Participant's Account Participant Deferrals shall be credited to the Participant's Account under the Plan as unfunded book entries stated as cash balances. The Administrator shall from time to time select investment funds which any Participant may designate as hypothetical investments with respect to such Participant's Account balance. The Administrator shall establish such rules as the Administrator deems appropriate regarding such hypothetical investments. Amounts credited to the Participant's Account as Participant Deferrals shall accrue (or be reduced by) amounts equivalent to the pro rata share of earnings (or losses) for each of the Plan's investment funds which the Participant has elected for his account. Such earnings or losses shall be posted quarterly. Amounts credited to the Participant's Account shall continue to accrue (or be reduced by) amounts equivalent to earnings (or losses) until distributed in accordance with the Plan. 6. Distribution Upon Separation from Service Any cash balance credited to a Participant's Account shall be distributed to the Participant in one lump sum payment to be paid to the Participant in cash as soon as practicable based on value as of the quarterly valuation date immediately preceding the date on which the Participant terminates his employment with the Corporation, plus any additional Participant Deferrals since that date. 7. Distribution on Death If a Participant should die before all amounts credited to the Participant's Account have been paid, the balance in such Participant's Account shall be paid in cash as soon as practicable, based on the value as of the quarterly valuation date immediately preceding the Participant's death, plus any additional Participant Deferrals since that date, to the beneficiary designated in a written instrument signed by the Participant and filed with the Administrator. If (a) no such designation has been made or (b) the designated beneficiary has predeceased the Participant and no further designation has been made, then such balance shall be paid to the Participant's spouse, or if no spouse shall survive the Participant, to the Participant's issue upon the principle of representation, or if no issue survive the Participant, then to the estate of the Participant. A Participant may change the designated beneficiary at any time during the Participant's lifetime by filing a subsequent designation in writing with the Administrator. 5 8. Payment in the Event of Hardship Upon receipt of a hardship request from a Participant, delivered in writing, the Administrator may make a distribution to the Participant upon determination that the participant has suffered an unforeseeable financial emergency which Participant cannot otherwise meet. The amount distributed to the Participant for such an unforeseeable financial emergency shall not exceed the lesser of: (i) the amount needed to satisfy the unforeseeable financial emergency, or (ii) the value of Participant's Account under the Plan. An unforeseeable financial emergency is a severe financial hardship to Participant as determined under the Williams-Sonoma, Inc. Employee Profit Sharing and Stock Incentive Plan. 9. Miscellaneous (a) The right of a Participant to receive any amount credited to the Participant's Account shall not be transferable or assignable by the Participant. To the extent that any person acquires a right to receive any amount credited to a Participant's Account hereunder, such right shall be no greater than that of an unsecured general creditor of the Corporation. Except as expressly provided herein, any person having an interest in any amount credited to a Participant's Account under the Plan shall not be entitled to payment until the date the amount is due and payable. No person shall be entitled to anticipate any payment by assignment, pledge or transfer in any form or manner prior to actual receipt thereof. (b) The Corporation shall not be required to reserve or otherwise set aside funds for the payment of its obligations hereunder. However, the Corporation may, in its sole discretion, establish funds for payment of its obligations hereunder. Any such funds shall remain assets of the Corporation and subject to the claims of its general creditors. Such funds, if any, shall not be deemed to be assets of the Plan. (c) The Administrator shall have full authority to interpret the Plan and make all determinations deemed necessary or desirable for the Plan's implementation. (d) The Board of Directors of the Corporation may at any time amend or terminate the Plan. No amendment or termination shall impair the rights of a Participant with respect to amounts then credited to the Participant's Account. (e) The Administrator shall have the discretion to waive or shorten the notice period provisions of the Plan in appropriate circumstances. (f) The establishment of this Plan or any modification hereof shall not give any Participant or other person the right to remain in the service of the Corporation or any of it subsidiaries, and all Participants and other persons shall remain subject to discharge to the same extent as if the Plan had never been adopted. 6 (g) The Administrator shall be entitled to withhold from any payment due under this Plan any and all taxes of any nature required by any government to be withheld from such payment. (h) No loans to Participants shall be permitted under this Plan. (i) This Plan, including any subsequently adopted amendments, shall constitute the entire agreement or contract between the Corporation and any Participant regarding this Plan. There are no covenants, promises, agreements, conditions or understandings, either oral or written, between the Corporation and any Participant relating to the subject matter hereof, other than those set forth herein. This Plan and any amendment hereof shall be binding on the Corporation and the Participants and their respective heirs, administrators, trustees, successors and assigns, including but not limited to, any successors of the Corporation by merger, consolidation or otherwise by operation of law, and on all designated beneficiaries of the Participant. (j) If any provisions of this Plan shall, to any extent, be invalid or unenforceable, the remainder of this Plan shall not be affected thereby, and each provision of this Plan shall be valid and enforceable to the fullest extent permitted by law. (k) The administration and interpretation of this Plan shall be governed by the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended. Executed this ____ day of _____________, 1995. WILLIAMS-SONOMA, INC. By _________________________________ EX-5.1 4 OPINION OF IRELL & MANELLA 1 Exhibit 5.1 Opinion of Irell & Manella 2 Williams-Sonoma, Inc. 3250 Van Ness Avenue San Francisco, California 94109 Re: Deferred Compensation Plans Ladies and Gentlemen: We have acted as counsel to Williams-Sonoma Inc., a California corporation (the "Company"), in connection with its Registration Statement on Form S-8 (the "Registration Statement") filed with the Securities and Exchange Commission with respect to the registration of $5 million in obligations of the Company pursuant to the Williams-Sonoma, Inc., Executive Deferral Plan and $5 million in obligations of the Company pursuant to the Williams-Sonoma, Inc., Deferred Compensation Plan (collectively, the "Plans" and the obligations thereunder, the "Obligations"). As such counsel, we have examined the Registration Statement, the Prospectuses for the Plans, and the Plan documents and have made such other factual and legal investigations as we deemed necessary or appropriate in order to render this opinion. Based upon such examinations and investigations, it is our opinion that the Obligations, upon the issuance thereof under the Plans, will be duly authorized, legally issued and binding obligations of the Company, subject to the effect of bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors rights generally, and subject to the effect of the laws of usury of the United States or California or similar laws or equitable principles relating to or limiting the interest rate on indebtedness. We consent to the use of this opinion as an exhibit to the Registration Statement. Sincerely, /s/ Irell & Manella EX-24.1 5 AUDITORS' CONSENT 1 Exhibit 24.1 Auditors' Consent 2 DELOITTE & TOUCHE LLP 50 Fremont Street San Francisco, CA 94105-2230 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement on Form S-8 of Williams-Sonoma, Inc., regarding the Executive Deferral Plan and the Deferred Compensation Plan of our reports dated March 24, 1995 (which expresses an unqualified opinion and includes an explanatory paragraph relating to the Company's change in its method of accounting for income taxes effective February 1, 1993), appearing in and incorporated by reference in the Annual Report on Form 10-K of Williams-Sonoma, Inc. for the fiscal year ended January 29, 1995. /s/ Deloitte & Touche LLP June 28, 1995 -----END PRIVACY-ENHANCED MESSAGE-----