UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934

(Amendment No.     )

Filed by the Registrant þ

Filed by a Party other than the Registrant¨

Check the appropriate box:

RESTORATION HARDWARE HOLDINGS, INC.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

RESTORATION HARDWARE HOLDINGS, INC.

15 Koch Road, Suite JK

Corte Madera, CA 94925

NOTICE OF 20142015 ANNUAL MEETING OF STOCKHOLDERS

to be held on:

June 25, 201424, 2015

11:00 a.m. Pacific Time

Dear Stockholder:

You are cordially invited to attend our 20142015 Annual Meeting of Stockholders, which will be held at 11:00 a.m. (Pacific Time) on June 25, 2014,24, 2015, at the Company’s headquarters located at 15 Koch Road, Corte Madera, CA 94925.

We are holding the Annual Meeting for the following purposes, which are more fully described in the proxy statement:

Only stockholders of record as of the close of business on May 5, 20148, 2015 are entitled to notice and to vote at the Annual Meeting or any postponement or adjournment thereof. A list of stockholders entitled to vote will be available for inspection at our offices for ten days prior to the Annual Meeting. If you would like to view this stockholder list, please contact Investor Relations at (415) 945-4998.

Each share of stock that you own represents one vote, and your vote as a stockholder of Restoration Hardware Holdings, Inc. is very important. For questions regarding your stock ownership, you may contact Investor Relations at (415) 945-4998 or, if you are a registered holder, our transfer agent, Computershare Investor Services, by email through their website atwww.computershare.com/contactusor by phone at (800) 962-4284 (within the U.S. and Canada) or (781) 575-3120 (outside the U.S. and Canada).

The Board of Directors has approved the proposals described in the accompanying proxy statement and recommends that you vote “FOR” the election of all nominees for director in Proposal 1, for every “THREE YEARS”“FOR” the approval of compensation of our named executive officers in Proposal 2, and “FOR” Proposal 3.

BY ORDER OF THE BOARD OF DIRECTORS
		Gary Friedman Chairman and Chief Executive Officer

Corte Madera, California

May 16, 201412, 2015

YOUR VOTE IS IMPORTANT

Instructions for submitting your proxy are provided in the Notice of Internet Availability of Proxy Materials, the Proxy Statement and your proxy card. It is important that your shares be represented and voted at the Annual Meeting. Please submit your proxy through the Internet, by telephone, or by completing the enclosed proxy card and returning it in the enclosed envelope. You may revoke your proxy at any time prior to its exercise at the Annual Meeting.

Important Notice Regarding the Availability of Proxy Materials for the Annual Stockholder Meeting to be Held on June 25, 2014:24, 2015:

RESTORATION HARDWARE HOLDINGS, INC.

20142015 ANNUAL MEETING OF STOCKHOLDERS

PROXY STATEMENT

Information about Solicitation and Voting

The accompanying proxy is solicited on behalf of the board of directors of Restoration Hardware Holdings, Inc. (the “Company”) for use at the Company’s 20142015 Annual Meeting of Stockholders (the “Annual Meeting”) to be held at the Company’s headquarters located at 15 Koch Road, Corte Madera, CA 94925 on June 25, 2014,24, 2015, at 11:00 a.m. (Pacific Time), and any adjournment or postponement thereof.

On or about May 16, 2014,12, 2015, we will mail to our stockholders of record and beneficial owners a Notice of Internet Availability of Proxy Materials containing instructions on how to access our 2013 Annual Report, including our2015 Notice and Proxy Statement and our fiscal 2014 Annual Report on Form 10-K (together, the “2014 Annual Report”), via the Internet and vote online. The Notice of Internet Availability of Proxy Materials also contains instructions on how you can receive a paper copy of the proxy materials. Our 20132014 Annual Report, Notice of Internet Availability of Proxy Materials and our proxy card are first being made available online on or about May 16, 2014.12, 2015.

About the Annual Meeting

What is the purpose of the Annual Meeting?

At our Annual Meeting, stockholders will act upon the proposals described in this proxy statement.

Why did I receive a one-page notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?

In accordance with rules and regulations adopted by the U.S. Securities and Exchange Commission, or the SEC, instead of mailing a printed copy of our proxy materials to all stockholders entitled to vote at the Annual Meeting, we are furnishing the proxy materials to our stockholders over the Internet. Accordingly, on or about May 12, 2015, the Company will mail a Notice of Internet Availability of Proxy Materials (the “Notice”) to the Company’s stockholders, other than those who previously requested electronic or paper delivery. If you received a Notice by mail, you will not receive a printed copy of the proxy materials. Instead, the Notice will instruct you as to how you may access and review the proxy materials and submit your vote on the Internet or by telephone. If you received a Notice by mail and would like to receive a printed copy of the proxy materials, please follow the instructions for requesting such materials included in the Notice. On the date of mailing of the Notice, all stockholders will have the ability to access all of our proxy materials on a website referred to in the Notice. These proxy materials will be available free of charge. We encourage stockholders to take advantage of the availability of the proxy materials on the Internet to help reduce the physical printing and mailing of materials.

What proposals are scheduled to be voted on at the Annual Meeting?

Stockholders will be asked to vote on three proposals. The proposals are:

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What is the recommendation of the board of directors on each of the proposals scheduled to be voted on at the Annual Meeting?

The board of directors recommends that you vote:

Could other matters be decided at the Annual Meeting?

Our Bylaws require that we receive advance notice of any proposal to be brought before the Annual Meeting by stockholders of the Company, and we have not received notice of any such proposals. If any other matter were to come before the Annual Meeting, the proxy holders appointed by our board of directors will have the discretion to vote on those matters for you.

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Who can vote at the Annual Meeting?

Stockholders as of the record date for the Annual Meeting, May 5, 2014,8, 2015, are entitled to vote at the Annual Meeting. At the close of business on the record date, there were outstanding and entitled to vote 39,373,42539,955,658 shares of the Company’s common stock.

Stockholder of Record: Shares Registered in Your Name

If on May 5, 2014,8, 2015, your shares were registered directly in your name with our transfer agent, Computershare Investor Services, then you are considered the stockholder of record with respect to those shares.

As a stockholder of record, you may vote at the Annual Meeting or vote by proxy. Whether or not you plan to attend the Annual Meeting, we urge you to vote over the Internet or by telephone, or if you request paper proxy materials, by filling out and returning the proxy card.

Beneficial Owner: Shares Registered in the Name of a Broker or Nominee

If on May 5, 2014,8, 2015, your shares were held in an account with a brokerage firm, bank or other nominee, then you are the beneficial owner of the shares held in street name. As a beneficial owner, you have the right to direct your nominee on how to vote the shares held in your account, and your nominee has enclosed or provided voting instructions for you to use in directing it on how to vote your shares. However, the organization that holds your shares is considered the stockholder of record for purposes of voting at the Annual Meeting. Because you are not the stockholder of record, you may not vote your shares at the Annual Meeting unless you request and obtain a valid proxy from the organization that holds your shares giving you the right to vote the shares at the Annual Meeting.

How do I vote?

If you are a stockholder of record, you may:

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Votes submitted via the Internet or by telephone must be received by 11:59 p.m., Pacific Time, on June 24, 2014.23, 2015. Submitting your proxy, whether via the Internet, by telephone or by mail if you requested a paper proxy card, will not affect your right to vote at the Annual Meeting should you decide to attend the meeting.

If you are not a stockholder of record, please refer to the voting instructions provided by your nominee to direct it how to vote your shares.

Your vote is important. Whether or not you plan to attend the Annual Meeting, we urge you to vote by proxy to ensure that your vote is counted. You may still attend the Annual Meeting if you have already voted by proxy.

Can I vote my shares by filling out and returning the Notice?

The Notice identifies the items to be voted on at the Annual Meeting, but you cannot vote by marking the Notice and returning it. The Notice provides instructions on how to vote on the Internet or by telephone and how to request paper copies of the proxy materials.

What if I return my proxy 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 on a particular proposal at the meeting, your shares will be voted in accordance with the recommendations of our board of directors stated above. For example, if you return a signed proxy card with no indication of your vote on any of the proposals, your votes will be cast “FOR” the election of the three director nominees named in this proxy statement, “FOR” the approval, on a non-binding, advisory basis, of the compensation of our named executive officers, and “FOR” the ratification of the appointment of PwC as our independent registered public accounting firm.

If you hold your shares in street name and do not vote, and your broker may not have discretionary power to vote your shares, your shares may constitute “broker non-votes” (as described below) and may not be counted in determining the number of shares necessary for approval of a proposal. However, shares that constitute broker non-votes will be counted for the purpose of establishing a quorum for the Annual Meeting. Voting results will be tabulated and certified by the inspector of elections appointed for the meeting.

What is the quorum requirement for the Annual Meeting?

A majority of our outstanding shares as of the record date must be present at the meeting in order to hold the meeting and conduct business. This presence is called a quorum. Your shares are counted as present at the meeting if you are present and vote in person at the meeting or if you have properly submitted a proxy.

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How are abstentions and broker non-votes treated?

Abstentions (shares present at the meeting and voted “abstain”) are counted for purposes of determining whether a quorum is present, and have no effect on the election of directors (Proposal 1), on the frequency of advisory vote to approve executive compensation (Proposal 2) or on the ratification of appointment of auditors (Proposal 3). For the purpose of determining whether the stockholders have approved all other matters, abstentions have the same effect as an “against” vote.

Broker non-votes occur when shares held by a broker for a beneficial owner are not voted either because (i) the broker did not receive voting instructions from the beneficial owner, orand (ii) the broker lacked discretionary authority to vote the shares. Broker non-votes are counted for purposes of determining whether a quorum is present, and have no effect on the matters voted upon.present. Note that if you are a beneficial holder and do not provide specific voting instructions to your broker, the broker that holds your shares will not be authorized to vote on the election of directors (Proposal 1), nor will the broker be authorized to vote on the frequency of advisory vote to approve executive compensation (Proposal 2). Ratification of the appointment of auditors (Proposal 3) is considered to be a routine matter and, accordingly, if you do not

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instruct your broker, bank or other nominee on how to vote the shares in your account for Proposal 3, brokers will be permitted to exercise their discretionary authority to vote for the ratification of the appointment of auditors. Accordingly, we encourage you to provide voting instructions to your broker, whether or not you plan to attend the Annual Meeting.

What is the vote required for each proposal?

The votes required to approve each proposal are as follows:

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What if I return a proxy card but do not make specific choices?

All proxies will be voted in accordance with the instructions specified on the proxy card. If you sign a physical proxy card and return it without instructions as to how your shares should be voted on a particular proposal at the meeting, your shares will be voted in accordance with the recommendations of our board of directors stated above.

If you do not vote and you hold your shares in street name, and your broker does not have discretionary power to vote your shares, your shares may constitute “broker non-votes” (as described above) and will not be counted in determining the number of shares necessary for approval of any proposal. However, shares that constitute broker non-votes will be counted for the purpose of establishing a quorum for the Annual Meeting. Voting results will be tabulated and certified by the inspector of elections appointed for the meeting.

Why did I receive a one-page notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?

Pursuant to rules adopted by the Securities and Exchange Commission (the “SEC”), the Company uses the Internet as the primary means of furnishing proxy materials to stockholders. Accordingly, on or about May 16, the Company will mail a Notice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”) to the Company’s stockholders, other than those who previously requested electronic or paper delivery. All stockholders will have the ability to access the proxy materials on the website referred to in the Notice of Internet Availability or request a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found in the Notice of Internet Availability. The Notice of Internet Availability of Proxy Materials also contains instructions on how to receive, free of charge, paper copies of the proxy materials. If you received the notice, then you will not receive a paper copy of the proxy materials unless you request one. The Company encourages stockholders to take advantage of the availability of the proxy materials on the Internet to help reduce cost to the Company associated with the physical printing and mailing of materials.

How can I get electronic access to the proxy materials?

The Notice of Internet Availability will provide you with instructions regarding how to use the Internet to:

The Company’s proxy materials are also available atir.restorationhardware.com. This website address is included for reference only. The information contained on the Company’s website is not incorporated by reference into the proxy statement.

Choosing to receive future proxy materials by email will save the Company the cost of printing and mailing documents to you. If you choose to receive future proxy materials by email, you will receive an email message next year with instructions containing a link to those materials and a link to the proxy voting website. Your election to receive proxy materials by email will remain in effect until you terminate it.

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Who is paying for this proxy solicitation?

The Company is paying the costs of the solicitation of proxies. Proxies may be solicited on behalf of the Company by our directors, officers, employees or agents in person or by telephone, facsimile or other electronic means. We will also reimburse brokerage firms and other custodians, nominees and fiduciaries, upon request, for their reasonable expenses incurred in sending proxies and proxy materials to beneficial owners of our common stock. We have not retained an outside proxy solicitation firm to assist us with the solicitation of proxies.

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What does it mean if I receive more than one proxy card?

If you receive more than one proxy card, your shares are registered in more than one name or are registered in different accounts. Please complete, sign and return each proxy card to ensure that all of your shares are voted.

How can I change my vote after submitting my proxy?

A stockholder who has given a proxy may revoke it at any time before it is exercised at the meeting by:

Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to revoke a proxy, you must contact that firm to revoke any prior voting instructions.

Where can I find the voting results?

The final results will be tallied by the inspector of elections and filed with the SEC in a current report on Form 8-K within four business days of the Annual Meeting.

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CORPORATE GOVERNANCE STANDARDS AND DIRECTOR INDEPENDENCE

Corporate Governance Guidelines

Our Corporate Governance Guidelines generally specify the distribution of rights and responsibilities of our board of directors and detail the rules and procedures for making decisions on corporate affairs. In general, the stockholders elect our board of directors, which is responsible for the general governance of our company,Company, including selection and oversight of key management; and management is responsible for running our day-to-day operations.

Our Corporate Governance Guidelines are available on the Investor Relations section of our website, which is located atir.restorationhardware.com, by clicking on “Corporate Governance.”

Code of Business Conduct and Code of Ethics

We have adopted a code of business conduct and code of ethics applicable to our principal executive, financial and accounting officers and all persons performing similar functions. Copies of these codes are available on our investor relations website, accessible through our principal corporate websites atwww.restorationhardware.comandwww.rh.com. We expect that any amendments to either code, or any waiver of the requirements of either code, will be disclosed on our website or as required by applicable law or NYSE listing requirements.

Compensation Committee Interlocks and Insider Participation

No members of our compensation committee are or have been officers or employees of the Company. No interlocking relationships exist between the members of our board of directors or compensation committee and the boards of directors or compensation committee of any other company, nor has such interlocking relationship existed in the past.

Composition of our Board of Directors

Our board of directors consists of nine directors, including our Chief Executive Officer. Our certificate of incorporation provides that, subject to any rights applicable to any then outstanding preferred stock, our board of directors shall consist of such number of directors as determined from time to time by resolution adopted by a majority of the total number of authorized directors whether or not there exist any vacancies in previously authorized directorships. Subject to any rights applicable to any then-outstanding preferred stock, any additional directorships resulting from an increase in the number of directors may only be filled by the directors then in office unless otherwise required by law or by a resolution passed by our board of directors. The term of office for each director will be until his or her successor is elected at our annual meeting or his or her death, resignation or removal, whichever is earliest to occur.

Our board of directors is divided into three classes, with each director serving a three-year term, and one class being elected at each year’s annual meeting of stockholders. Katie Mitic, Thomas Mottola and Barry Sternlicht serve as Class II directors with the term expiring in 2014. Gary Friedman, Carlos Alberini and Michael Chu serve as Class III directors with the term expiring in 2015. Eri Chaya, Mark Demilio and Leonard Schlesinger serve as Class I directors with the term expiring in 2016.

“Controlled Company” Status

Effective May 20, 2013, Home Holdings LLC, a Delaware limited liability company (“Home Holdings”), ceased to control a majority of our voting common stock. As a result, we ceased to be a “controlled company” within Katie Mitic, Thomas Mottola and Ali Rowghani serve as Class II directors with the meaning of the NYSE rules. Under applicable NYSE listing rules, once we are no longer a controlled company, (i) we must have at least one independent member on our nominating committee and at least one

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independent member on our compensation committee by the date on which we ceased to be a controlled company; (ii) we must have at least a majority of independent members on each such committee within 90 days of the date on which we ceased to be a controlled company; (iii) we must have fully independent committees within one year of the date on which we cease to be a controlled company; and (iv) we must have a majority of independent directors on the board of directors within one year of the date on which we ceased to be a controlled company. We have complied with these requirements within the required periods.term expiring in 2017.

Board Meetings

Our board of directors and its committees meet throughout the year, and also hold special meetings and act by written consent from time to time. Our board of directors held a total of eightseven meetings during the fiscal year ended on February 1, 2014January 31, 2015 (“fiscal 2013”2014”). All of the directors attended at least 75% of the meetings other than Mr. Chu, who attended 50% ofheld during the meetings.period for which such person has been a director.

Agendas and topics for board and committee meetings are developed through discussions among management and members of our board of directors and its committees. Information and data that are important

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to the issues to be considered are distributed in advance of each meeting. Board meetings and background materials focus on key strategic, operational, financial, governance and compliance matters applicable to us.

Board Leadership Structure and Executive Sessions

Our board of directors has three standing committees: the audit committee, the compensation committee and the nominating committee. Each of these committees reports to our board of directors as it deems appropriate and as our board of directors may request.

With respect toCorporate Governance Guidelines provide that the roles of Chairman of our board of directors and Chief Executive Officer our Corporate Governance Guidelines provide that the roles may be separated or combined, and our board of directors exercises its discretion in combining or separating these positions as it deems appropriate in light of prevailing circumstances. Our board of directors believes that the combination or separation of these positions should continue to be considered as part of our succession planning process. Currently the roles are combined, with Mr. Friedman serving as Chief Executive Officer and Chairman of our board of directors.

In July 2013, the board of directors voted to create the position of Lead Independent Director and adopted a Lead Independent Director Charter. The Lead Independent Director Charter provides that the Lead Independent Director shall serve in a lead capacity to coordinate the activities of the other non-employee directors and to perform such other duties and functions as directed by the board from time to time. The Lead Independent Director presides over the executive sessions of non-management directors. Mr. Mottola currently serves as our Lead Independent Director.

Our Corporate Governance Guidelines provide the flexibility for our board of directors to modify our leadership structure in the future as appropriate. We believe that our companyCompany is well served by this flexible leadership structure.

Board Independence

In accordance with our Corporate Governance Guidelines, the board of directors affirmatively determines that each independent director has no material relationship with the Company (either directly or as a partner, shareholderstockholder or officer of an organization that has a relationship with the Company) and meets the standards for independence as defined by applicable law and the rules of the NYSE.

In May 2014, ourOur board of directors undertook a review of the independence of our directors and considered whether any director has a material relationship with us that could compromise that director’s ability to exercise

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independent judgment in carrying out that director’s responsibilities. Our board of directors has affirmatively determined that each of Mr. Demilio, Ms. Mitic, Mr. Mottola, Mr. Rowghani and Dr. Schlesinger and Mr. Sternlicht is an “independent director,” as defined under the rules of the NYSE.NYSE and the SEC. Further, each member of the board of directors’ committees satisfies independence standards applicable to each committee on which they serve. The Board’s independence determination was based on information provided by our current directors.

Board’s Role in Risk Oversight

Our board of directors is responsible for overseeing our risk management process. Our board of directors focuses on our general risk management strategy, the most significant risks facing us, and oversees the implementation of risk mitigation strategies by management. Our board of directors is also apprised of particular risk management matters in connection with its general oversight and approval of corporate matters and significant transactions. In addition, each of the board committees is responsible for the risk management under its area of responsibility and consistent with its charter and such other responsibilities as may be delegated to them by the board of directors from time to time.

Risk Considerations in Our Compensation Program

We conducted an assessment of our compensation policies and practices for our employees and concluded that these policies and practices are not reasonably likely to have a material adverse effect on our Company.

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Board Diversity

As indicated in our Corporate Governance Guidelines, our board of directors believes its effectiveness is enhanced by being comprised of individuals with diverse backgrounds, skills and experience that are relevant to the role of the board of directors and the needs of the business. Accordingly, the board, through the nominating and corporate governance committee, regularly reviews the changing needs of the business and the skills and experience resident in its members, with the intention that the board will be periodically “renewed” as certain directors rotate off and new directors are recruited. The board’s commitment to diversity and “renewal” will be tempered by the need to balance change with continuity and experience. We believe that our commitment to diversity is demonstrated by the current membership of our board and the varied backgrounds and skill sets of our directors.

Director Stock Ownership Guidelines

We do not require that our directors maintain a minimum ownership interest in our Company.

Director Compensation

We currently compensate our independent directors as follows:

In addition, we granted to Mr. Mottola an option to purchase 20,000 shares of our common stock, with an exercise price of $75.43 per share, in connection with his appointment as Lead Independent Director in July 2013. The option vests in five equal installments over five years, subject to Mr. Mottola’s continuous service as Lead Independent Director.

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Additionally, on AprilJanuary 22, 2014,2015, we granted a restricted stock award of 821791 shares to Dr. SchlesingerMr. Rowghani in connection with his appointment as a member of our board of directors. The grant of restricted stock was the annual grant that we grant to our directors for their service on the board, pro-rated in value for the one-year vesting period remaining on the annual restricted stock grants made to other independent directors for the fiscal year ended February 1, 2014.January 31, 2015. This award vests in full on September 9, 2014.

August 19, 2015. Mr. Chu, as a former designee of Home Holdings, Mr. Friedman, Mr. Alberini and Ms. Chaya, as former or current Company employees, do not receive any compensation for board service. All directors receive reimbursement for reasonable out-of-pocket expenses incurred in connection with meetings of our board of directors.

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Summary Compensation Table

The following table shows the compensation earned by our directors who are not included in our disclosures concerning named executive officers during fiscal 2013.2014 contained elsewhere in this proxy statement.

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THE BOARD AND ITS COMMITTEES

There are three primary committees of our board of directors: the audit committee, the compensation committee and the nominating committee. Our board of directors has delegated various responsibilities and authorities to thesethree different committees, as described below and in the committee charters. The board committees regularly report on their activities and actions to the full board of directors.directors as they deem appropriate and as the board of directors may request. Each member of the audit committee, the compensation committee and the nominating and corporate governance committee was appointed by our board of directors. Each of the board committees has a written charter approved by our board of directors and available on our website atir.restorationhardware.com, by clicking on “Corporate Governance.”

The following table shows our current directors, their independence status, their roles on our board of directors and its committees, and the number of meetings our board of directors and each of its committees held in fiscal 2013.2014. In fiscal 2013,2014, the board of directors and the committees also acted by unanimous written consents.

Director

Independent

Board

Audit Committee

Compensation Committee

Nominating Committee

Independent

Board

Audit Committee

Compensation Committee

Nominating and  Corporate Governance Committee

Gary Friedman

No

No

Carlos Alberini

No

No

Eri Chaya

No

No

J. Michael Chu

No

No

Mark Demilio

Yes

Yes

Katie Mitic

Yes

Yes

Thomas Mottola (Lead Independent Director)

Yes

Yes

Ali Rowghani (1)

Yes

Leonard Schlesinger

Yes

Yes

Barry Sternlicht

Yes

Number of Meetings in Fiscal 2013

8

5

1

2

Number of Meetings in Fiscal 2014

7

5

1

—

(2)

= Member = Chair

Audit Committee

The audit committee was established for the primary purpose of assisting the board of directors in overseeing the accounting and financial reporting processes of the Company and audits of its financial statements. The audit committee is responsible for, among other matters: (1) appointing, retaining, compensating, retaining, evaluating, terminating and overseeing our independent registered public accounting firm; (2) delineating relationships between our independent registered public accounting firm and our companyCompany consistent with the rules of the NYSE and request information from our independent registered public accounting firm and management to determine the presence or absence of a conflict of interest; (3) reviewing with our independent registered public accounting firm the scope and results of their audit; (4) approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm; (5) overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the interim and annual financial statements that we file with the SEC; (6) reviewing and monitoring our accounting principles, accounting policies, financial and accounting controls and compliance with legal and regulatory requirements; (7) establishing procedures for the confidential anonymous submission of concerns regarding questionable accounting, internal controls or auditing matters; and (8) reviewing and approving related-person transactions.

Our audit committee consists of Mr. Demilio, Ms. Mitic and Mr. Mottola. Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and NYSE rules require us to have at least three audit

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committee members, all of whom are independent. Our board of directors has affirmatively determined that Mr. Demilio, Ms. Mitic and Mr. Mottola meet the definition of “independent director” for purposes of serving on an audit committee under Rule 10A-3 of the Exchange Act and NYSE rules. In addition, our board of directors has determined that Mr. Demilio qualifies as an “audit committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K.

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Our board of directors has adopted a written charter for the audit committee, which is available on our investor relations website, accessible through our principal websites atwww.restorationhardware.com andwww.rh.com.

Compensation Committee

The compensation committee was established for the primary purpose of assisting the board of directors in discharging its responsibilities relating to the compensation of the Company’s directors and executive officers, as further described in “Compensation Discussion and Analysis—Compensation Committee Review of Compensation” below. The compensation committee is responsible for, among other matters: (1) reviewing key employee compensation goals, policies, plans and programs; (2) reviewing and approving the compensation of our directors, Chief Executive Officer and other executive officers; (3) reviewing employment agreements and other similar arrangements between us and our executive officers; and (4) appointing and overseeing any compensation consultants.

Our compensation committee consists of Mr. Demilio, Mr. Mottola and Dr. Schlesinger. Our board of directors has affirmatively determined that each member of the compensation committee meets applicable independence requirements for membership on a compensation committee in accordance with applicable rules of the NYSE. Our board of directors adopted a written charter for the compensation committee, which is available on our investor relations website, accessible through our principal websites atwww.restorationhardware.com andwww.rh.com.

Nominating and Corporate Governance Committee

The nominating and corporate governance committee was established for the primary purpose of assisting the board of directors in discharging its responsibilities relating to the election of directors. The nominating and corporate governance committee is responsible for, among other matters: (1) identifying individuals qualified to become members of our board of directors, consistent with criteria approved by our board of directors; (2) overseeing the organization of our board of directors to discharge the board’s duties and responsibilities properly and efficiently; and (3) developing and recommending to our board of directors a set of corporate governance guidelines and principles.

Our nominating and corporate governance committee consists of Mr. Mottola and Mr. Sternlicht.Rowghani. Our board of directors has affirmatively determined that each member of the nominating and corporate governance committee meets applicable independence requirements for membership on a nominating and corporate governance committee in accordance with applicable rules of the NYSE. Our board of directors adopted a written charter for the nominating and corporate governance committee, which is available on our investor relations website, accessible through our principal websites atwww.restorationhardware.com andwww.rh.com.

DIRECTOR NOMINATIONS AND COMMUNICATION WITH DIRECTORS

Criteria for Nomination to the Board

In accordance with its charter, the nominating and corporate governance committee will consider candidates submitted by the Company’s stockholders, as well as candidates recommended by directors and management, for nomination to our board of directors. The nominating and corporate governance committee considers qualities in candidates such asqualifications for the board of directors membership, which may include, among others: (1) the highest personal and professional integrity, (2) demonstrated exceptional ability and judgment, (3) broad experience in business, finance or administration, (4) familiarity with the retailCompany’s industry, (5) ability to serve the long-term interests

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of the Company’s stockholders, and(6) sufficient time available to devote to the affairs of the Company.Company, (7) ability to provide continuing service to promote stability and continuity in the boardroom and provide the benefit of familiarity and insight into the Company’s affairs that directors would accumulate during their tenure, (8) ability to help the Board work as a collective body and (9) experience, areas of expertise, as well as other factors relative to the overall composition of the Board. The nominating and corporate governance committee further reviews and assesses the activities and associations of each candidate to ensure there is no legal impediment, conflict of interest, or other consideration that might hinder or prevent service on our board of directors. In making its selection, the nominating and corporate governance committee bears in mind that the foremost responsibility of a director of a company is to represent the interests of the stockholders as a whole.

“Election of Directors—Nominees for Director” below includes the key individual attributes, experience and skills of each of the director nominees submitted for election under Proposal 1 that led to the conclusion that each director should serve as a member of our board of directors at this time.

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Stockholder Proposals for Nominees

In accordance with its charter, the nominating and corporate governance committee will consider potential nominees properly submitted by stockholders. Stockholders seeking to do so should provide the information set forth in the nominating and corporate governance committee’s charter regarding director nominations. The nominating and corporate governance committee will apply the same criteria for candidates proposed by stockholders as it does for candidates proposed by management or other directors.

To be considered for nomination by the nominating and corporate governance committee at next year’s annual meeting of stockholders, submissions by stockholders must be submitted in writing and must be received by the Corporate Secretary between January 15, 201512, 2016 and February 14, 201511, 2016 to ensure adequate time for meaningful consideration by the nominating and corporate governance committee. Each submission must include the following information:

Information regarding requirements that must be followed by a stockholder who wishes to make a stockholder nomination for election to our board of directors for next year’s annual meeting is described in this proxy statement under “Additional Information—Stockholder Proposals for the 20152016 Annual Meeting.”

ContactingCommunicating with Members of the Board of Directors

Any stockholder or any other interested party who wishes to communicate directly with (i) our entire board of directors (ii) the non-management directors as a group or (iii) the Lead Independent Director, may do so by corresponding with the Lead Independent Director at the following address: Lead Independent Director, Restoration Hardware Holdings, Inc., Legal Dept., 15 Koch Road, Suite J,K, Bldg. D, Corte Madera, CA 94925, Attn: Corporate Secretary.

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PROPOSAL 1

ELECTION OF DIRECTORS

Our board of directors currently consists of nine directors, three of whom, the Class IIIII directors, are nominated and standing for election at the Annual Meeting. Each director is elected to serve a three-year term.

Unless proxy cards are otherwise marked, the persons named as proxies will vote all proxiesFORthe election of each nominee named in this section. Proxies submitted to the Company cannot be voted at the Annual Meeting for nominees other than those nominees named in this proxy statement. However, if any director nominee is unable or unwilling to serve at the time of the Annual Meeting, the persons named as proxies may vote for a substitute nominee designated by our board of directors. Alternatively, our board of directors may reduce the size of our board of directors. Each nominee has consented to serve as a director if elected, and our board of directors does not believe that any nominee will be unwilling or unable to serve if elected as a director. Each director will hold office until the expiration of the three-year term and until his or her successor has been duly elected and qualified or until his or her earlier resignation or removal.

Nominees for Director

Our board of directors has nominated the following nominees listed below to serve as Class IIIII directors for the term beginning at the Annual Meeting.

There are no family or special relationships between any director nominee or executive officer and any other director nominee or executive officer. There are no arrangements or understandings between any director nominee or executive officer and any other person pursuant to which he or she has been or will be selected as our director and/or executive officer.

The names of each nominee for director, their ages as of May 5, 2014,1, 2015, and other information about each nominee are shown below.

Katie MiticGary Friedman was appointed to our boardis Chairman of directors on October 28, 2013. Ms. Mitic is the FounderBoard and Chief Executive Officer of Sitch, Inc., previously called Three Koi Labs, a mobile services start-up company formed in August 2012.the Company. From AugustJuly 2013 to January 2014, Mr. Friedman served as Co-Chief Executive Officer with Mr. Alberini, and from October 2012 to July 2013, Mr. Friedman served as Chairman Emeritus, Creator and Curator on an advisory basis. Mr. Friedman served as our Chairman and Co-Chief Executive Officer from June 2010 to AugustOctober 2012 Ms. Miticand as our Chief Executive Officer from March 2001 to June 2010. He served as Directoron our board of Platform & Mobile Marketingdirectors from March 2001 to October 2012. Prior to joining us, from 1988 to 2001, Mr. Friedman worked for Facebook,Williams-Sonoma, Inc., a social networking service. From June 2009 to July 2010, Ms. Miticspecialty retailer of products for the home, where he served in various capacities, including as Senior Vice President Product Marketing of Palm, Inc., a smartphone manufacturer. From May 2008 to June 2009, Ms. Mitic was an Executive-in-Residence at Elevation Partners, a private equity firm focused on the media and entertainment industries. From December 2006 to February 2008, Ms. Mitic served as Chief Operating Officer from May 2000 to March 2001, as Chief Merchandising Officer and President of SkyriderRetail Stores from 1995 to 2000 and as Executive Vice President and President of the Williams-Sonoma and Pottery Barn brands from 1993 to 1995. Prior to joining Williams-Sonoma, Mr. Friedman spent eleven years with Gap, Inc., a developer of online peer-to-peer networking solutions. She also serves on the board of directors of Special Olympics International, and on the board of directors, compensation committee and nominating and governance committee of eBay, Inc., a Nasdaq-listed global commerce and payments company. Ms. Mitic holds a B.A. degreespecialty retailer, in Economics from Stanford University and an M.B.A. degree from Harvard Business School. Ms. Miticvarious management positions. Mr. Friedman was selected to our board of directors because he possesses particular knowledge and experience in retail and merchandising, home furnishing merchandise and branded consumer goods, sales and distribution and leadership of her extensive experiencecomplex organizations.

Carlos Alberini has served as a leaderdirector since June 2012. Mr. Alberini served as our Co-Chief Executive Officer from June 2010 through October 2012 and entrepreneur obtained from herJuly 2013 through January 2014, and he served as our sole Chief Executive Officer from October 2012 through July 2013. Mr. Alberini has served as the Chairman and Chief Executive Officer of Lucky Brand since February 2014. Mr. Alberini was President and Chief Operating Officer of Guess?, Inc., an NYSE-listed specialty retailer of apparel and accessories, from December 2000 to June 2010. From May 2006 to July 2006, Mr. Alberini served as Interim Chief Financial Officer of Guess.

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Mr. Alberini served as a member of the board of directors of Guess from December 2000 to September 2011. From October 1996 to December 2000, Mr. Alberini served as Senior Vice President and Chief Financial Officer of Footstar, Inc., a retailer of footwear. From May 1995 to October 1996, Mr. Alberini served as Vice President of Finance and Acting Chief Financial Officer of the Melville Corporation, a retail holding corporation. From 1987 to 1995, Mr. Alberini was with The Bon-Ton Stores, Inc., an operator of department stores, in various capacities, including Corporate Controller, Senior Vice President, Chief Financial Officer and Treasurer. Prior to that, Mr. Alberini served in various positions at PricewaterhouseCoopers LLP, an audit firm. Mr. Alberini was selected to our board of directors because he possesses particular knowledge and experience with major global consumer-facing technology companies.in retail and merchandising, branded consumer goods, accounting, financing and capital finance, board practices of other large retail companies and leadership of complex organizations.

Thomas MottolaJ. Michael Chuwas appointed to our board of directors on November 1, 2012. In 2003,in June 2008. Mr. Mottola founded The Mottola Company,Chu serves as a company specializingManaging Partner of Catterton Partners, a private equity firm he co-founded in multimedia, entertainment, communications, branding, licensing and consulting, and has been its Chairman and Chief Executive Officer since that time. From 1993 to 2003,1989. Mr. Mottola served as Chairman and Chief Executive Officer of Sony Music Entertainment, Inc., a global recording music company. Prior to becoming Chief Executive Officer of Sony, he served as its President from 1988 to 1993. He has servedChu serves on the board of directors of ONE World Enterprises since 2010. Mr. Mottola is widely known for signing and developing the careers of major recording artists, including Celine Dion, Mariah Carey, Beyoncé, Jennifer Lopez, Ricky Martin, Gloria Estefan, Shakira, the Dixie Chicks, Marc Anthony, Barbra Streisand, Bruce Springsteen, Billy Joel and Harry Connick Jr., among many others. Mr. Mottola has served on the boards of the National Center for Missing and Exploited Children, the Police Athletic League, T.J. Martell

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Foundation for Cancer, Leukemia and AIDS Research and the Rock and Roll Hall of Fame Foundation and Museum. Mr. Mottola’s extensive experience as a senior executive and director of a major branded consumer company provides us with business and leadership insight.

Barry Sternlicht was appointed to our board of directors on November 1, 2012. Mr. Sternlicht has been the Chairman and Chief Executive Officer of Starwood Capital Group since its formation in 1991. He has been the Chairman of the Board of Directors and the Chief Executive Officer of Starwood Property Trust, Inc., an NYSE-listed company, since its formation in 2009. Mr. Sternlicht also serves as the Chairman of the Board of Trustees of Starwood Waypoint Residential Trust, an NYSE-listed company. From 1995 through early 2005, he was the Chairman and Chief Executive Officer of Starwood Hotels & Resorts Worldwide, Inc., an NYSE-listed company he founded in 1995. Mr. Sternlicht is the Chairman of the Board of Baccarat S.A., an NYSE Euronext Paris-listed crystal manufacturer. He also serves on the Boards of Directors of The Estée Lauder Companies and Tri Pointe Homes. Mr. Sternlicht is a Trustee of Brown University. He servesmanufacturer, as Chairman of the Board of The Robin Hood Foundation and iswell as on the boards of directors of several private companies. From August 2012 to February 2014, Mr. Chu served on the Pension Real Estate Association (PREA)board of directors of Bloomin’ Brands, Inc., a Nasdaq-listed restaurant business. Additionally, from December 2010 to June 2012, Mr. Chu served on the Real Estate Roundtable, the Dreamland Filmboard of directors of Noodles & Performing Arts Center,Company, which became a Nasdaq-listed company in June 2013. Prior to forming Catterton Partners, Mr. Chu held a variety of senior management positions with The First Pacific company and the Executive Advisory Board of Americans for the Arts Organization. Mr. Sternlichtits various subsidiaries. First Pacific is a member ofHong Kong publicly listed investment and management Company where he was employed from 1983 to 1989. Prior to First Pacific, he was Assistant Treasurer at Allied Bank International from 1980 to 1983. Mr. Chu was selected to our board because he possesses particular knowledge and experience both in the World Presidents Organization. Mr. Sternlicht received his B.A. from Brown University. He later earned his M.B.A. from Harvard Business School. Mr. Sternlicht’s extensive experience as a chief executive officerUnited States and director of a private investment firm and other publicly traded entities provides the board with leadership and financial expertise.globally in supporting high-growth consumer businesses.

THE BOARD RECOMMENDS A VOTE “FOR” ELECTION OF

EACH OF THE THREE NOMINATED DIRECTORS.

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PROPOSAL 2

ADVISORY VOTE ON FREQUENCY OF VOTE ON EXECUTIVE COMPENSATION

UnderThe Dodd-Frank Wall Street Reform and Consumer Protection Act added Section 14A to the Jumpstart Our Business StartupsSecurities Exchange Act of 2012 (the “JOBS Act”), newly public emerging growth companies are allowed to gradually “phase-in” certain disclosure and other requirements for as many as five years, including with respect to conducting an advisory vote on executive compensation (i.e., a “say-on-pay” vote). While1934, which requires that we are currently exempt from conducting a “say-on-pay” vote, we are required to provide our stockholders with the opportunity to vote to approve, on a nonbinding, advisory basis, the compensation of our named executives officers as disclosed in this proxy statement in accordance with the compensation disclosure rules of the Securities and Exchange Commission.

Compensation Program and Philosophy

As described in greater detail under the heading “Compensation Discussion and Analysis,” our compensation programs are designed to attract and retain the best talent, use the Company’s equity to encourage an ownership mentality among our named executive officers and align the long-term financial interest of our executives with those of our Company and our investors. To achieve these objectives, our executive compensation program has three principal components: an annual base salary, a performance based annual cash incentive and a long-term equity incentive compensation. Our Compensation Committee believes that the goals of our executive compensation program are appropriate and that the program is properly structured to achieve those goals.

Required Vote for This Proposal

The affirmative vote of a majority of the shares present or represented and entitled to vote either in person or by proxy is required to approve this Proposal 2.

This vote is advisory, which means that the vote on executive compensation is not binding on the Company, our Board of Directors or the Compensation Committee of the Board of Directors. The vote on this resolution is not intended to address any specific element of compensation, but rather relates to the overall compensation of our named executive officers, as described in this proxy statement in accordance with the compensation disclosure rules of the Securities and Exchange Commission.

Accordingly, we ask our stockholders to vote on the following resolution at the Annual Meeting:

“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 2015 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the Summary Compensation Table and the other related tables and disclosure.”

We have determined that our stockholders should cast an advisory vote on how often we should include a say-on-pay vote (i.e., a “say-on-frequency” vote) inthe compensation of our proxy materials for futurenamed executive officers on an annual stockholder meetings (or special shareholder meetings for whichbasis. Unless this policy changes, the Company must include executive compensation information in the proxy statement for that meeting). The Dodd-Frank Act of 2010 requires that we hold a say-on-frequency vote at least once every six years.

Under this proposal, our stockholders may cast a non-bindingnext advisory vote on whether they would prefer that we conduct a say-on-pay vote every year, every two years or every three years.

We believe that say-on-pay vote should be conducted every three years, for the reasons stated below.

A three-year vote cycle for say-on-pay will provide stockholders with the necessary time to evaluate the effectivenesscompensation of our named executive compensation program in relation to our long-term performance and business results and avoid over-emphasis on short-term variations in compensation and on our performance and business results. A three-year cycle will also give our board of directors and our compensation committee an appropriate time frame to thoughtfully consider and evaluate the results of the most recent advisory vote on executive compensation, to discuss the implications of that vote, and to implement any desired changes.

Vote Required

This proposal on the frequency of future advisory say-on-pay votes is advisory only and will not be binding on the Company. In voting on this proposal, youofficers will be able to indicate your preference regardingat the frequency2016 annual meeting of future say-on-pay votes by specifying a choice of one year, two years or three years. If you do not have a preference regarding the frequency of future say-on-pay votes, you should abstain from voting on the proposal. Stockholders are not voting to approve or disapprove the recommendation of our board of directors. A plurality of the votes cast will determine the stockholders’ preferred frequency for holding an advisory vote on executive compensation. This means that the alternative for holding an advisory vote every year, every two years, or every three years receiving the greatest number of votes will be the preferred frequency of the stockholders. Broker non-votes and abstentions are not counted for purposes of this proposal.

THE BOARD RECOMMENDS A VOTE “FOR HOLDING AN ADVISORY VOTE ON” THE APPROVAL OF THE COMPENSATION PAID TOOF OUR NAMED EXECUTIVE OFFICERS, EVERY THREE YEARS.AS DISCLOSED IN THIS PROXY STATEMENT.

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PROPOSAL 3

RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The audit committee has appointed PwC as the Company’s principal independent registered public accounting firm to perform the audit of the Company’s consolidated financial statements for fiscal 2014.2015. The audit committee has decided to submit its selection of independent audit firm to stockholders for ratification. In the event that this appointment of PwC is not ratified by a majority of votes cast, whether in person or by proxy, the audit committee will review its future selection of PwC as the Company’s independent registered public accounting firm.

The audit committee first approved PwC as our independent auditors in fiscal 2008.

Representatives of PwC are expected to attend the Annual Meeting, will have an opportunity to make a statement if they desire to do so and are expected to be available to respond to questions.

Principal Accountant Fees and Services

We regularly review the services and fees from our independent registered public accounting firm, PwC. These services and fees are also reviewed with the audit committee annually. In accordance with standard policy, PwC periodically rotates the individuals who are responsible for the Company’s audit.

In addition to performing the audit of the Company’s consolidated financial statements, PwC provided various other services during fiscal 20132014 and fiscal 2012.2013. The Company’s audit committee has determined that PwC’s provision of these services, which are described below, does not impair PwC’s independence from the Company. The aggregate fees billed for fiscal 20132014 and fiscal 20122013 for each of the following categories of services are as follows:

The categories in the above table have the definitions assigned under Item 9 of Schedule 14A promulgated under the Exchange Act, and these categories include in particular the following components:

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm

The audit committee’s policy is to pre-approve all audit and permissible non-audit services provided by the independent registered public accounting firm. These services may include audit services, audit-related services,

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tax services and other services. The independent registered public accounting firm and management are required to periodically report to the audit committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval, and the fees for the services performed to date.

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All of the services relating to the fees described in the table above were approved by the audit committee in accordance with the audit committee’s pre-approval policy.

THE BOARD RECOMMENDS THAT YOU VOTE “FOR” RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL 2014.2015.

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REPORT OF THE AUDIT COMMITTEE

The information contained in the following report of the Company’s audit committee is not considered to be “soliciting material,” “filed” or incorporated by reference in any past or future filing by the Company under the Exchange Act or the Securities Act of 1933 unless and only to the extent that the Company specifically incorporates it by reference.

The Audit Committee hereby reports as follows:

1. The Audit Committee has reviewed and discussed the audited financial statements for the year ended February 1, 2014January 31, 2015 with the Company’s management and PricewaterhouseCoopers LLP, the Company’s independent registered public accounting firm (“PwC”).

2. The Audit Committee has also discussed with PwC the matters required to be discussed by Auditing Standard No. 16, “Communications with Audit Committees,” as adopted by the Public Company Accounting Oversight Board (United States).

3. The Audit Committee also has received and reviewed the written disclosures and the letter from PwC required by applicable requirements of the Public Company Accounting Oversight Board regarding PwC’s communications with the Audit Committee concerning independence, and has discussed with PwC its independence from the Company.

4. Based on the reviews and discussions referred to above, the Audit Committee recommended to our board of directors that the financial statements referred to above be included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2014January 31, 2015 for filing with the SEC.

Respectfully submitted by the members of the Audit Committee of the board of directors for the fiscal year ended February 1, 2014.January 31, 2015.

Mark Demilio                     Katie Mitic                     Thomas Mottola

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MANAGEMENT

Below is a list of the names and ages, as of May 5, 2014,1, 2015, of the following persons and a description of the business experience of each of them.

Executive Officers

Gary Friedman is Chairman of the Board and Chief Executive Officer of the Company. From July 2013 to January 2014, Mr. Friedman served as Co-Chief Executive Officer with Mr. Alberini, and from October 2012 to July 2013, Mr. Friedman served as Chairman Emeritus, Creator and Curator on an advisory basis. Mr. Friedman served as our Chairman and Co-Chief Executive Officer from June 2010 to October 2012 and as our Chief Executive Officer from March 2001 to June 2010. He served on our board of directors from March 2001 to October 2012. Prior to joining us, from 1988 to 2001, Mr. Friedman worked for Williams-Sonoma, Inc., a specialty retailer of products for the home, where he served in various capacities, including as President and Chief Operating Officer from May 2000 to March 2001, as Chief Merchandising Officer and President of Retail Stores from 1995 to 2000 and as Executive Vice President and President of the Williams-Sonoma and Pottery Barn brands from 1993 to 1995. Prior to joining Williams-Sonoma, Mr. Friedman spent eleven years with Gap, Inc., a specialty retailer, in various management positions. Mr. Friedman was selected to our board of directors because he possesses particular knowledge and experience in retail and merchandising, home furnishing merchandise and branded consumer goods, sales and distribution and leadership of complex organizations.

Karen Boone joined us as our Chief Financial Officer in June 2012 and currently serves as our Chief Financial and Administrative Officer. From December 1996 to June 2012, Ms. Boone worked for Deloitte & Touche LLP, an accounting and consulting firm, where since 2010 she most recently served as an audit partner. Before becoming an audit partner in 2010, she served as a senior manager in Deloitte’s audit practice from 2005 to 2010 and as a manager from 2002 to 2005. Her entire career at Deloitte was spent specializing in service to retail and consumer products companies.

Ken Dunaj has served as our Chief Operating Officer since May 2006. From August 2005 to May 2006, Mr. Dunaj served as Senior Vice President, Global Logistics, for Williams-Sonoma, Inc., a specialty retailer of products for the home. From September 2000 to August 2005, Mr. Dunaj held various other positions at Williams-Sonoma, including Vice President, Distribution. Prior to joining Williams-Sonoma, Mr. Dunaj held various positions at Toys “R” Us, Inc., Genesis Direct, Inc., Reebok International Ltd. and NIKE, Inc.

Directors

We believe our board of directors should be composed of individuals with sophistication and experience in many substantive areas that impact our business. We believe experience, qualifications, or skills in the following areas are most important: retail merchandising; marketing and advertising; furniture and consumer goods; sales

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and distribution; accounting, finance, and capital structure; strategic planning and leadership of complex organizations; legal/regulatory and government affairs; people management; and board practices of other major corporations. We believe that all our current board members possess the professional and personal qualifications necessary for board service, and have highlighted particularly noteworthy attributes for each board member in the individual biographies below, or above in the case of our Chief Executive Officer.

Carlos Alberini has served as a director since June 2012. Mr. Alberini served as our Co-Chief Executive Officer from June 2010 through October 2012 and from July 2013 through January 2014, and he served as our sole Chief Executive Officer from October 2012 through July 2013. Mr. Alberini has served as the Chairman and Chief Executive Officer of Lucky Brand since February 2014. Mr. Alberini was President and Chief Operating Officer of Guess?, Inc., an NYSE-listed specialty retailer of apparel and accessories, from December 2000 to June 2010. From May 2006 to July 2006, Mr. Alberini served as Interim Chief Financial Officer of Guess. Mr. Alberini served as a member of the board of directors of Guess from December 2000 to September 2011. From October 1996 to December 2000, Mr. Alberini served as Senior Vice President and Chief Financial Officer of Footstar, Inc., a retailer of footwear. From May 1995 to October 1996, Mr. Alberini served as Vice President of Finance and Acting Chief Financial Officer of the Melville Corporation, a retail holding corporation. From 1987 to 1995, Mr. Alberini was with The Bon-Ton Stores, Inc., an operator of department stores, in various capacities, including Corporate Controller, Senior Vice President, Chief Financial Officer and Treasurer. Prior to that, Mr. Alberini served in various positions at PricewaterhouseCoopers LLP, an audit firm. Mr. Alberini was selected to our board of directors because he possesses particular knowledge and experience in retail and merchandising, branded consumer goods, accounting, financing and capital finance, board practices of other large retail companies and leadership of complex organizations.

Eri Chaya was appointed to our board of directors on November 1, 2012. Ms. Chaya has served as our Chief Creative Officer since April 2008. Before becoming our Chief Creative Officer, Ms. Chaya was our Vice President of Creative, beginning in July 2006. From February 2004 to June 2006, Ms. Chaya was a creative director at Goodby, Silverstein and Partners, an international advertising agency. From May 2000 to February 2004, Ms. Chaya was a creative director at Banana Republic, a clothing retailer. Ms. Chaya was selected to our board of directors because she possesses particular knowledge and experience in product development, marketing, advertising and design.

Ken Dunaj joined us as Chief Operating Officer in May of 2006 with responsibility for product sourcing and quality, inventory management, fulfillment and delivery, customer service, supply chain systems and infrastructure. Prior to joining the Company, he served in various leadership roles at Williams-Sonoma, Inc. from September 2000 to May 2006, including Senior Vice President, Global Logistics as well as Vice President, Distribution. Prior to Williams-Sonoma, Mr. Dunaj held various logistics and supply chain positions at Toys “R” Us, Inc., Genesis Direct, Inc., Reebok International Ltd. and NIKE, Inc.

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Directors

We believe our board of directors should be composed of individuals with sophistication and experience in many substantive areas that impact our business. We believe experience, qualifications, or skills in the following areas are most important: retail merchandising; marketing and advertising; furniture and consumer goods; sales and distribution; accounting, finance, and capital structure; strategic planning and leadership of complex organizations; legal/regulatory and government affairs; people management; and board practices of other major corporations. We believe that all our current board members possess the professional and personal qualifications necessary for board service, and have highlighted particularly noteworthy attributes for each board member in the individual biographies below, or above in the case of our Chief Executive Officer.

Carlos Alberini has served as a director since June 2012. Mr. Alberini served as our Co-Chief Executive Officer from June 2010 through October 2012 and from July 2013 through January 2014, and he served as our sole Chief Executive Officer from October 2012 through July 2013. Mr. Alberini has served as the Chairman and Chief Executive Officer of Lucky Brand since February 2014. Mr. Alberini was President and Chief Operating Officer of Guess?, Inc., an NYSE-listed specialty retailer of apparel and accessories, from December 2000 to June 2010. From May 2006 to July 2006, Mr. Alberini served as Interim Chief Financial Officer of Guess. Mr. Alberini served as a member of the board of directors of Guess from December 2000 to September 2011. From October 1996 to December 2000, Mr. Alberini served as Senior Vice President and Chief Financial Officer of Footstar, Inc., a retailer of footwear. From May 1995 to October 1996, Mr. Alberini served as Vice President of Finance and Acting Chief Financial Officer of the Melville Corporation, a retail holding corporation. From 1987 to 1995, Mr. Alberini was with The Bon-Ton Stores, Inc., an operator of department stores, in various capacities, including Corporate Controller, Senior Vice President, Chief Financial Officer and Treasurer. Prior to that, Mr. Alberini served in various positions at PricewaterhouseCoopers LLP, an audit firm. Mr. Alberini was selected to our board of directors because he possesses particular knowledge and experience in retail and merchandising, branded consumer goods, accounting, financing and capital finance, board practices of other large retail companies and leadership of complex organizations.

J. Michael Chuwas appointed to our board of directors in June 2008. Mr. Chu serves as a Managing Partner of Catterton Partners, a private equity firm he co-founded in 1989. Mr. Chu serves on the board of directors of Baccarat S.A., an NYSE Euronext Paris-listed crystal manufacturer, as well as on the boards of directors of several private companies. From August 2012 to February 2014, Mr. Chu served on the board of directors of Bloomin’ Brands, Inc., a Nasdaq-listed restaurant business. Additionally, from December 2010 to June 2012, Mr. Chu served on the board of directors of Noodles & Company, which became a Nasdaq-listed company in June 2013. Prior to forming Catterton Partners, Mr. Chu held a variety of senior management positions with The First Pacific Company and its various subsidiaries, including as Vice President and Corporate Treasurer of First Pacific in Hong Kong, and as Chief Financial Officer and Chief Operating Officer of various operating companies owned or controlled by First Pacific in both the United States and Europe.subsidiaries. First Pacific is a Hong Kong publicly listed investment and management company where he was employed from 1983 to 1989. Prior to First Pacific, he was Assistant Treasurer at Allied Bank International from 1980 to 1983. Mr. Chu was selected to our board because he possesses particular knowledge and experience both in the United States and globally in supporting high-growth consumer businesses.

Mark Demilio has served as a member of our board of directors since September 2009. Mr. Demilio has been a member of the board of directors of Cosi, Inc., a Nasdaq-listed national restaurant chain, since April 2004 and currently serves on its audit committee and as Chairman of its compensation committee. HeSince March 2014, he has served as Chairman of the board of directors of Cosi, having also served in that role from March 2010 to December 2011, and again from June 2013 to March 2014, and served ashe was the interim Chief Executive Officer of Cosi from September 2011 to December 2011. From April 2004 until he was named Chairman of the board of directors of Cosi,March 2010, Mr. Demilio served as Chairman of Cosi’s audit committee, and from August 2008 until March 2010, he served as Chairman of its nominating and governance committee. Since February 2014, Mr. Demilio has served as a member of the board of

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directors and Chairman of the audit committee of The Paslin Company, a private company that designs, assembles and integrates robotic assembly lines for the automotive industry. From December 2000 until his retirement in October 2008, Mr. Demilio served as the Chief Financial Officer of Magellan Health Services, Inc., a Nasdaq-listed managed specialty healthcare company that managed the delivery of behavioral healthcare treatment services, specialty pharmaceuticals and radiology services.

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Mr. Demilio has also been the General Counsel for Magellan Health Service, the Chief Financial Officer and General Counsel of Youth Services International, Inc., an attorney specializing in corporate and securities law with the law firms of Miles & Stockbridge and Piper & Marbury, a financial analyst for CareFirst BlueCross BlueShield of Maryland and a certified public accountant with Arthur Andersen LLP. Mr. Demilio was selected to our board of directors because he possesses particular knowledge and experience in accounting, finance and capital structure, strategic planning and leadership of complex organizations and board practices of other major corporations.

Katie Mitic was appointed to our board of directors on October 28, 2013. Ms. Mitic is the Founder and Chief Executive Officer of Sitch, Inc., previously called Three Koi Labs, a mobile services start-up company formed in August 2012. From August 2010 to August 2012, Ms. Mitic served as Director of Platform & Mobile Marketing for Facebook, Inc., a social networking service. From June 2009 to July 2010, Ms. Mitic served as Senior Vice President, Product Marketing of Palm, Inc., a smartphone manufacturer. From May 2008 to June 2009, Ms. Mitic was an Executive-in-Residence at Elevation Partners, a private equity firm focused on the media and entertainment industries. From December 2006 to February 2008, Ms. Mitic served as Chief Operating Officer of Skyrider Inc., a developer of online peer-to-peer networking solutions. She also serves on the board of directors of Special Olympics International, and on the board of directors, compensation committee and nominating and governance committee of eBay, Inc., a Nasdaq-listed global commerce and payments company. Ms. Mitic holds a B.A. degree in Economics from Stanford University and an M.B.A. degree from Harvard Business School. Ms. Mitic was selected to our board of directors because of her extensive experience as a leader and entrepreneur obtained from her experience with major global consumer-facing technology companies.

Thomas Mottola was appointed to our board of directors on November 1, 2012. In 2003, Mr. Mottola founded The Mottola Company, a company specializing in multimedia, entertainment, communications, branding, licensing and consulting, and has been its Chairman and Chief Executive Officer since that time. From 1993 to 2003, Mr. Mottola served as Chairman and Chief Executive Officer of Sony Music Entertainment, Inc., a global recording music company. Prior to becoming Chief Executive Officer of Sony, he served as its President from 1988 to 1993. He has served on the board of directors of ONE World Enterprises since 2010. Mr. Mottola is widely known for signing and developing the careers of major recording artists, including Celine Dion, Mariah Carey, Beyoncé, Jennifer Lopez, Ricky Martin, Gloria Estefan, Shakira, the Dixie Chicks, Marc Anthony, Barbra Streisand, Bruce Springsteen, Billy Joel and Harry Connick Jr., among many others. Mr. Mottola has served on the boards of the National Center for Missing and Exploited Children, the Police Athletic League, T.J. Martell Foundation for Cancer, Leukemia and AIDS Research and the Rock and Roll Hall of Fame Foundation and Museum. Mr. Mottola’s extensive experience as a senior executive and director of a major branded consumer company provides us with business and leadership insight.

Ali Rowghani was appointed to our board of directors on January 22, 2015. Mr. Rowghani has served in executive leadership positions at innovative growth companies, including Twitter, Inc. and Pixar Animation Studios, Inc. At Twitter, Mr. Rowghani was hired as the Company’s first Chief Financial Officer in March 2010, and later served as Chief Operating Officer, with responsibility for business development, platform, media, product, and business analytics, from December 2012 to June 2014. Prior to Twitter, from June 2002 to February 2010, Mr. Rowghani served in various leadership roles at Pixar, including Chief Financial Officer and Senior Vice President, Strategic Planning, reporting to Pixar founder and President, Ed Catmull. Mr. Rowghani is currently a part time partner at YCombinator, providing consultation to early-stage growth companies, and serves on the Board of Directors of The San Francisco Symphony. Mr. Rowghani holds a B.A. in International Relations and an M.B.A. from Stanford University. Mr. Rowghani’s operational and financial leadership, coupled with his expertise in scaling innovative, high-growth companies, provides the board with valuable operational and financial expertise.

Leonard Schlesinger was appointed to our board of directors on April 22, 2014. Dr. Schlesinger has served as the Baker Foundation Professor of Business Administration at Harvard Business School, a role he returned to in July 2013 after having served as the President of Babson College from July 2008 until July 2013 and having held various positions at public and private companies. From 1999 to 2007, Dr. Schlesinger held various

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executive positions at Limited Brands, Inc. (now L Brands, Inc.), an NYSE-listed company, including Vice Chairman of the board of directors and Chief Operating Officer. While at Limited Brands, he was responsible for the operational and financial functions across the enterprise including Express, Limited Stores, Victoria’s Secret Beauty, Bath and Body Works, C.O. Bigelow, Henri Bendel and the White Barn Candle Company. Dr. Schlesinger also previously served as Executive Vice President and Chief Operating Officer at Au Bon Pain Co., Inc. and as a director of numerous public and private retail, consumer products and technology companies. He has served as lead independent director of the board and a member of the board of directorsnominating and governance committee of Demandware, Inc., an NYSE-listed cloud-based digital commerce solutions company, since September 2013. Dr. Schlesinger has also held leadership roles at leading MBA and executive education programs and other academic institutions, including twenty years at Harvard

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Business School where he served as the George Fisher Baker Jr. Professor of Business Administration. Dr. Schlesinger holds a Doctor of Business Administration from Harvard Business School, an MBA from Columbia University and a Bachelor of Arts in American Civilization from Brown University. Dr. Schlesinger’s extensive experience at numerous private and public retail companies provides the board with valuable operational, financial and business expertise.

Barry Sternlicht was appointed to our board of directors on November 1, 2012. Mr. Sternlicht has been the Chairman and Chief Executive Officer of Starwood Capital Group since its formation in 1991. He has been the Chairman of the Board of Directors and the Chief Executive Officer of Starwood Property Trust, Inc., anNYSE-listed company, since its formation in 2009. Mr. Sternlicht also serves as the Chairman of the Board of Trustees of Starwood Waypoint Residential Trust, an NYSE-listed company. From 1995 through early 2005, he was the Chairman and Chief Executive Officer of Starwood Hotels & Resorts Worldwide, Inc., an NYSE-listed company he founded in 1995. Mr. Sternlicht is the Chairman of the Board of Baccarat, S.A., an NYSE Euronext Paris-listed crystal manufacturer. He also serves on the Board of Directors of The Estée Lauder Companies and Tri Pointe Homes. Mr. Sternlicht is a Trustee of Brown University. He serves as Chairman of the Board of The Robin Hood Foundation and is on the boards of the Pension Real Estate Association (PREA), the Real Estate Roundtable, the Dreamland Film & Performing Arts Center, and the Executive Advisory Board of Americans for the Arts Organization. Mr. Sternlicht is a member of the World Presidents Organization. Mr. Sternlicht received his B.A. from Brown University. He later earned his M.B.A. from Harvard Business School. Mr. Sternlicht’s extensive experience as a chief executive officer and director of a private investment firm and other publicly traded entities provides the board with leadership and financial expertise.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information as of May 5, 2014,1, 2015, regarding the beneficial ownership of our common stock:

Beneficial ownership for the purposes of the following table is determined in accordance with the rules and regulations of the SEC. These rules generally provide that a person is the beneficial owner of securities if such person has or shares the power to vote or direct the voting thereof, or to dispose or direct the disposition thereof or has the right to acquire such powers within 60 days. Common stock subject to options that are currently exercisable or exercisable or that vest within 60 days of May 5, 20141, 2015 are deemed to be outstanding and beneficially owned by the person holding such options. These shares, however, are not deemed outstanding for the purposes of computing the percentage ownership of any other person. Percentage of beneficial ownership is based on 39,373,42539,954,426 shares of common stock outstanding as of May 5, 2014.1, 2015. Except as disclosed in the footnotes to this table and subject to applicable community property laws, we believe that each stockholder identified in the table possesses sole voting and investment power over all shares of common stock shown as beneficially owned by the stockholder. Unless otherwise indicated in the table or footnotes below, the address for each beneficial owner is c/o Restoration Hardware Holdings, Inc., 15 Koch Road, Suite J,K, Corte Madera, CA 94925.

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Section 16(a) Beneficial Ownership Reporting Compliance

Section 16 of the Exchange Act requires the Company’s directors, executive officers and any persons who own more than 10% of the Company’s common stock, to file initial reports of ownership and reports of changes in ownership with the SEC. Such persons are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms that they file.

Except as set forth herein, basedBased solely on its review of the copies of such forms furnished to the Company and written representations from the directors and executive officers, the Company believes that all Section 16(a) filing requirements were met in a timely manner in fiscal 2013. On September 13, 2013, Forms 4 for Mr. Demilio, Mr. Mottola and Mr. Sternlicht were inadvertently filed two days late with respect to transactions that occurred on September 9, 2013.2014.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

The Company believesWe believe that compensation paid to theour named executive officers should be closely aligned withtailored to achieve the performancekey goals of the Company on both a short-term and long-term basis, and linked to specific, measurable results intended to create value for stockholders. Consistent with linking pay with performance, in fiscal 2013:

Introductionyear ended January 31, 2015 (“fiscal 2014”) and how their fiscal 2014 compensation aligns with our executive compensation philosophy.

The following discussion and analysis of compensation arrangements ofFor fiscal 2014, our named executive officers identified below for fiscal 2013 should be read together with the compensation tables and related disclosures set forth below.

We refer to the following individuals as our “named executive officers” for fiscal 2013:were:

Executive Summary

RH delivered record financial results in fiscal 2014 as well as continued to execute on the key value driving strategies that we believe will drive continued long-term growth and stockholder value creation. In fiscal 2014, the Company, among other things:

The achievements and progress we made in fiscal 2014 give us further confidence in our ability to achieve our long-term goal of $4 billion to $5 billion in North American sales, mid-teens operating margins, and significant free cash flow generation.

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The Company believes that compensation paid to our named executive officers should be closely aligned with the performance of the Company on both a short-term and long-term basis, and linked to specific, measurable results intended to create value for stockholders. Our executive compensation programs are aligned with our stockholders’ interests, measured primarily as achievement of earnings before taxes, and stock price appreciation—metrics in which we excelled during fiscal 2014.

Due to the unique nature of our Company and the insufficiency of direct industry competitors, we do not benchmark our executive compensation practices against a specific group of peer companies, but rather consider a number of different information sources, including data from proxy statements, survey data for general industry and a broad set of retail/wholesale industry companies of comparable size, in assessing the reasonableness of our compensation platform. For purposes of evaluating base salaries, short-term incentive opportunities, and long-term incentive opportunities, we consider market practices in a wide variety of companies, both within and outside of our industry, including sustained high-performance organizations and companies that are geographically relevant. These various resources provide us with a reliable market check with respect to the competitiveness of our compensation platform.

Against this backdrop of Company performance, we funded our fiscal 2014 leadership incentive program at 106%, reflecting the strong results in revenue and operating earnings growth. Equity awards were made in a combination of stock options, to align our executives’ financial interests with those of our stockholders, and restricted stock units, to promote an ownership mentality and the retention of our high-performing employees. Because our Chairman and Chief Executive Officer received a multi-year stock option award in fiscal 2013, in connection with his re-appointment as our then co-chief executive officer, he did not receive an equity award in fiscal 2014.

Although RH does not view itself as a typical retail organization, and intends to maintain compensation programs that promote our unique culture, strategy, and objectives, the board of directors’ and the compensation committee’s overarching goal is to deliver on our pay for performance philosophy by offering compensation strategies that incent strong results, attract and retain a premier team, and are supported by our stockholders.

Overview of Compensation Program and Philosophy

Our executive compensation program is specifically designed to:

This compensation philosophy guides the compensation committee in assessing the compensation to be paid to our named executive officers. The compensation committee endeavors to ensure that the total compensation paid to the named executive officers is fair, competitive and consistent with our compensation philosophy. This compensation philosophy also guides the compensation committee as to the proper allocation among current cash compensation in the form of annual base salary, short-term compensation in the form of performance-based

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annual cash incentives, and long-term compensation in the form of equity incentive compensation. We evaluate both the performance and compensation of our named executive officers to ensure that the executive compensation program we implement achieves these goals.

Compensation Committee Review of Compensation

Our board of directors has established a compensation committee that is generally responsible for the oversight, implementation and administration of all of our executive compensation plans and programs.

In connection with executive compensation, the role of the compensation committee is to, among other things:

Overview

To set a competitive, reasonable and appropriate level of compensation, committee endeavors to ensure that the total compensation paid to named executive officers is fair, reasonable, competitiveboard of directors and consistent with our compensation philosophy. This compensation philosophy also guides the compensation committee consider relevant factors, as applicable, to the proper allocation between current cash compensation decision being made in any given year. The board of directors’ and the formcompensation committee’s approach to evaluating these factors is subjective and not formulaic and may place more or less weight on a particular factor when determining a particular executive officer’s compensation. Factors that are considered can include (i) the individual’s performance and contributions to financial objectives, (ii) equity awards previously granted to the executive, including the amounts of annual base salary, short-termsuch awards that remain unvested and therefore continue to incentivize future performance, (iii) individual leadership, expectations, expertise, skill, and knowledge, (iv) analyses of competitive market compensation practices and labor market conditions, (v) input from senior management, including our Chief Executive Officer and (vi) input from an independent compensation consultant.

Role of Management in the form of performance-based annual cash incentives and long-term compensation in the form of long-term equity-based compensation.Determining Executive Compensation

In determining the particular elements oftotal compensation for fiscal 2013,each executive officer, the board of directors and the compensation committee took into considerationconsider the specific recommendations of our Chief Executive Officer (other than with

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respect to his own personal compensation) and may consider relevant input from other senior members of management. The Chief Executive Officer plays a numbersignificant role in the compensation-setting process for the other named executive officers by:

Role of Senior Management in Compensation Decisions

Our Chief Executive Officer annually reviews the compensation paid to each named executive officer other than our Chief Executive Officer, we have on an annual basis reviewed with our Chief Executive Officer the compensation paid to each such other named executive officer duringofficers over the pastfiscal year and the Chief Executive Officer has submittedthrough presentations to the compensation committee, either as a committee or together with the board of directors as a whole, and provides his recommendations regarding the compensation to be paid to such persons during the next year. Following a review of such recommendations, the board of directors or the compensation committee, took suchafter reviewing the other factors and inputs as discussed above, takes action regarding such compensation recommendations as it deemed appropriate, including either approving compensation in an amountdeems appropriate. The board of directors and the compensation committee deemed reasonable or submittingalso consider input from our Chief Executive Officer and our Chief Financial and Administrative Officer when setting financial objectives for our performance-based incentive program.

Analyses of Competitive Market Practices

We do not engage in a formal benchmarking process in setting compensation. Instead, we consider an array of available data and information in order to assess the competitiveness and relevance of our compensation program and philosophy, including market information concerning local and national market practices that are determined to be relevant to the Company. For example, the board of directors for approval its recommendation regardingand the compensation committee look at the compensation practices of and other information concerning innovative growth companies and companies with which we compete in Northern California for some of our executive talent needs. The result of this analysis is a “market check” concerning the elements of compensation and practices that are determined to be paidrelevant in setting compensation for our executive officers.

The compensation committee has periodically engaged compensation consultants to such namedassist the committee in assessing current compensation market conditions. No compensation consultant specifically assisted the compensation committee or board of directors in determining fiscal 2014 executive officers. The Chief Executive Officer plays a significant role in the compensation-setting process for the other named executive officers by:compensation.

Executive Compensation Components

In determining our named executive officers’ compensation program, the compensation committee considers how each component motivates performance and promotes retention and sound long-term decision-making.

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The principal components of our compensation program for the named executive officers are:are delineated below. In determining our named executive officers’ overall compensation program, the compensation committee and the board of directors, as applicable, each considers how a particular component motivates performance, and promotes retention and sound long-term decision-making.

We discuss each of these components in more detail below.

Annual Base Salary

We provide our named executive officers with an annual base salary to compensate them for services rendered during the fiscal year. The base salary for each of the named executive officers is guided by thea variety of factors which may include market information regarding salary levels for comparable positions in the industry,that are deemed relevant for comparison purposes, as well as such individual’s work experience, personal performance, responsibilities and other considerations including internal alignment considerations.alignment. The relative weight given to each factor is not specifically quantified and varies with each individual at the discretion of the compensation committee’s discretion.committee and/or the board of directors.

Each named executive officer’s base salary is typically reviewed annually and is adjusted from time to time on the basis of (i) the compensation committee’s evaluation of the executive officer’s personal performance for the year, (ii) the recommendations of our Chief Executive Officer (other than with respect to the Chief Executive Officer’s base salary), (iii) the Company’s performance for the year, and (iii)(iv) the competitive marketplace for executives in comparable positions.

The performance and profitability of our Company also may be a factor in determining the base salariespositions, including market information regarding salary levels for the named executive officers, as well as increases in the base salariespositions that are deemed relevant for the executive officers. In addition, increasescomparison purposes. Increases in base salariessalary for an executive officer have been approved in the past by the compensation committee and/or board of directors as a result of an individual’s performance or due in part to increases in the executive officer’s responsibilities. Further, in certain cases

For fiscal 2014, the compensation committee has approved, as partbase salaries of anour named executive officer’s initial employment arrangement with us, a pre-determined increase in the executive officer’sofficers were adjusted from $495,000 to $650,000 for Ms. Boone, from $530,000 to $750,000 for Ms. Chaya, and from $575,000 to $750,000 for Mr. Dunaj. Mr. Friedman’s base salary in a later year.was not increased for fiscal 2014. Although the Company’s performance has continued to be strong, Mr. Friedman’s base salary was not increased for fiscal 2014 based primarily on Mr. Friedman’s request that his salary not be increased.

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Performance-Based Annual Cash Incentives

We have adopted a Managementthe Leadership Incentive Program, or “MIP,“LIP,” which is a cash based-incentive compensation program designed to motivate and reward annual performance for eligible employees, including our named executive officers. The compensation committee considers annually whether MIPLIP bonus targets should be established for the year and, if so, approves the group of employees eligible to participate in the MIPLIP for that year. The MIPLIP includes various incentive levels based on the participant’s position. Cash bonuses under the MIPLIP have the effect of linking a significant portion of the named executive officers’ total cash compensation to our overall performance.

The MIPLIP bonus for our named executive officers is based on the achievement of financial objectives, rather than individual performance, in order to focus the entire senior management team on the attainment of such

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enterprise-wide financial objectives. Each named executive officer is provided a target bonus amount which is equal to a percentage of such officer’s annual base salary. The target bonus amount is based on the Company meeting the 100%target achievement level for the relevant financial objectives. The compensation committee and/or the board of directors establishes the target achievement level at which 100% of such participant’s target bonus will be paid (the “100% Achievement Level”), the minimum threshold achievement level at which 20% of the participant’s target bonus will be paid (the 20% Achievement Level”) and the achievement level at which 200% of the participant’s target bonus will be paid (the 200% Achievement Level”). The exact amount of the bonus payable under the MIPLIP is based on the level of achievement of such financial objectives, with the bonus amount increasing for each named executive officer as a percentage of such officer’s base salary to the extent the achievement of such financial objectives for the fiscal year exceeds the 100% achievement level,Achievement Level, and with the bonus amount decreasing as a percentage of base salary to the extent the achievement of such financial objectives for the fiscal year is below the 100% achievement levelAchievement Level (but above the minimum achievement level)20% Achievement Level). The compensation committee also may adopt separate minimum or maximum payout amounts for certain individuals under the MIP. NoLIP. The LIP is structured so that no bonuses are paid under the MIPLIP unless we meet the threshold of at least a 20% achievement level.Achievement Level.

The compensation committee, either as a committee or with the board of directors as a whole, sets the financial objectives each year under the MIPLIP and the payment and amount of any bonus is dependent upon whether we achieve the minimum financial objectives under the MIP.LIP. The compensation committee, either as a committee or with the board of directors as a whole, generally establishes financial objectives for ourthe Company that it believes can be reasonably achieved with strong performance over the fiscal year. The compensation committee historically has set the target performance levels based upon our achievement of specified company results with respect to adjusted EBITDA, subject to the compensation committee’s oversight and modification of those levels. Minimum levels are set below the target level. In making the determination of minimum and target levels, the compensation committee and/or the board of directors may consider the specific circumstances facing our Company during the year and our strategic plan for the year. Although there is currentlywas no maximum payout amount under the MIP,LIP for fiscal 2014, the compensation committee retainsand the board of directors have wide discretion to both interpret the MIP’sLIP’s performance objectives in light of relevant factors both internal and external to the Company, and to limitadjust the amount paid under the MIP. LIP accordingly.

Prior to fiscal 2014, the compensation committee and board of directors set target performance levels based primarily upon Company achievement of specified results with respect to adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA). In fiscal 2014, the performance metric for funding bonuses was changed to adjusted income before taxes. We define adjusted income before taxes (“Adjusted Income”) as consolidated income before taxes, adjusted for the impact of certain non-recurring and other items that we do not consider representative of our ongoing operating performance.

The compensation committee and the board of directors also retainsretain discretion to adjust performance objectives after adoption of the MIP.such objectives. The compensation committee and the board of directors further retainsretain the right to exclude extraordinary charges or other special circumstances in determining whether our performance objectives were met during any particular fiscal year. The compensation committee exercisesand the board of directors exercise such discretion based on its business judgment and the experience and familiarity of its members withtaking into account both recurring and extraordinary factors affecting performance of companies in our industry of a similar scale to ours.the Company as well as other relevant factors. Accordingly, for purposes of determining whether certain MIPLIP goals have been met, the compensation committee and the board of

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directors may determine to exclude from the calculation isolated items that the compensation committee doesthey do not believe are indicative of future Company performance or other items that the compensation committee doesthey do not believe should impact the amount of the bonuses paid to employees under the MIP.LIP. The compensation committee may consult with ourthe board of directors, or seek ratification from our board of directorsas deemed necessary, with respect to material issues concerning the administration of the LIP including interpretations of the terms of the MIP.

We define EBITDA as consolidated net income (loss) before depreciation and amortization, interest expense and provision for income taxes. In accordance with the terms of the MIP, our adjusted EBITDA reflects further adjustments to EBITDA to eliminate the impact of certain items, including non-cash or other items that we do not consider representative of our ongoing operating performance, as discussed in more detail in the section entitled “Selected Historical Consolidated Financial and Operating Data” contained in our Annual Report on Form 10-K for the fiscal year ended February 1, 2014.

As indicated above, Mr. Friedman became a Co-Chief Executive Officer effective July 2, 2013. In accordance with his employment agreement, Mr. Friedman’s bonus opportunity for fiscal 2013 was based on (i) his base salary approved in July 2013, (ii) the same bonus criteria and milestones that have been established with respect to Mr. Alberini, our former Co-Chief Executive Officer, and (iii) a full year bonus opportunity without any pro-ration for a partial year of service inasmuch as Mr. Friedman has been providing services to the Company prior to his appointment as a Co-Chief Executive Officer.

For fiscal 2013, the target bonus amount under the MIP for Mr. Friedman and Mr. Alberini was 100% of annual base salary, and the maximum bonus that Mr. Friedman and Mr. Alberini could have received under the MIP for fiscal 2013 was 125% of annual base salary. The target bonus amount under the MIP for fiscal 2013 for Ms. Boone and Mr. Dunaj was 50% of annual base salary, and the compensation committee determined that the

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maximum bonus that Mr. Dunaj could have received under the MIP was 100% of annual base salary and that Ms. Boone’s MIP bonus amount for fiscal 2013 was not subject to a maximum amount.LIP.

The following table sets forth the bonuses payable under the MIPLIP in fiscal 20132014 to Mr. Friedman, Ms. Boone, Ms. Chaya and Mr. Dunaj at the 0% achievement level,20% Achievement Level, the 20% achievement level100% Achievement Level and the 200% achievement level:Achievement Level: