EXHIBIT 10.39
[LETTERHEAD OF WILLIAMS-SONOMA, INC.]
January 9, 2003
Dale W. Hilpert
3 Nina Court
Mill Valley, CA 94941
By Fax and Federal Express
Re: Separation Agreement
Dear Dale:
This letter (the "Agreement") summarizes the terms of your separation
from employment at Williams-Sonoma, Inc. ("WSI").
1. This Agreement will be effective upon its execution by both you and WSI
(the "Effective Date"). By executing this Agreement, you agree to, and
hereby do, voluntarily resign as an officer and a director of WSI, and any
subsidiary or affiliate of WSI. This Agreement supersedes any employment
contract that has existed between WSI and you, specifically including the
agreement made as of February 5, 2001 (the "2001 Employment Agreement"), and
that contract, or any other such contract, is hereby canceled.
2. Your employment with WSI terminated on January 8, 2003. In exchange
for the promises given by you to WSI as described in this Agreement:
a) WSI will accelerate to the Effective Date the vesting of the 800,000
unvested stock options (reflecting the stock split with the record
date of April 29, 2002) that were granted in connection with the
2001 Employment Agreement; and
b) WSI will cause to be vested at the Effective Date the 500,000 shares
of Restricted Stock granted to you in connection with the 2001
Employment Agreement; and
c) WSI will pay you a lump sum, consistent with the terms of the 2001
Employment Agreement and the WSI Incentive Bonus Plan, reflecting
a percentage of your base salary (and as though you were employed
for the entire 2002 fiscal year), as approved by the Compensation
Committee of the WSI Board of Directors, and in accordance with the
Bonus Plan approved by the Compensation Committee in April 2002.
This amount will be paid as soon as practicable after the close of
the WSI fiscal year and the meeting of the Compensation Committee.
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Upon your separation, you will be eligible to continue medical coverage
pursuant to COBRA.
From and after January 8, 2003, you will not be entitled to any further
payments or benefits of any kind, other than as stated in this Agreement.
Notwithstanding anything to the contrary in this Agreement, in the event
of a breach by you of any of the terms or conditions in this Agreement, or
of a breach or violation of any of the terms or conditions of the agreement
referred to in paragraph 5 below, all payments due under this Agreement
will immediately cease, and WSI will have no further obligation to you
under this Agreement.
3. You acknowledge that at termination you will be paid $14,615.39, less
applicable withholdings which represents your final pay. You also
acknowledge that at termination you will be paid an amount $59,375.01,
less applicable withholdings, which represents accrued but unused vacation
time and floating holidays. You will also be reimbursed for business
expenses already incurred and approved. You agree that prior to the
execution of this Agreement, you were not entitled to receive any further
monetary payments from WSI, and that the only payments or benefits that
you are entitled to receive from WSI in the future are those specified in
paragraph 2 of this Agreement.
4. You understand that you must exercise all stock options pursuant to the
provisions in the applicable plans and notices. The vested portion of
such stock options may only be exercised during the period of 90 days
following January 8, 2003. Failure to exercise any vested options during
that period will result in the forfeiture of those options.
5. At all times from and after the Effective Date, you agree to continue to
be bound by WSI's Corporate Ethics Policy and Agreement, a copy of which is
attached.
6. At no time after the Effective Date will you disclose any Confidential
Information gained during or as a result of your employment by WSI or
service on the Board of Directors of WSI. Confidential Information means
any information that is, or should reasonably be understood to be,
confidential or proprietary to WSI. Confidential Information includes but
is not limited to all information, whether in written, oral, electronic,
magnetic, photographic or any other form, that relates to WSI's: past,
present and future businesses, products, product specifications, designs,
drawings, concepts, samples, intellectual property, inventions, know-how,
sources, costs, pricing, technologies, customers, vendors, other business
relationships, business ideas and methods, distribution methods,
inventories, manufacturing processes, computer programs and systems,
employees, hiring practices, operations, marketing strategies and other
technical, business and financial information. Confidential Information
also includes the identity, capabilities and capacity of vendors and of
former vendors or others that were considered but rejected.
7. You agree that you will not disparage WSI or any officer, director,
shareholder or employee of WSI or otherwise make any statement that could
injure the personal or
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business reputation of any of them, nor will you take any action that is
inconsistent with the best interests of WSI. You also agree not to make
any statement regarding your departure from WSI that is inconsistent with
the press release issued by WSI on January 9, 2003. In addition to the
foregoing, you agree, upon one or more requests from WSI, to deliver to
it all documents and materials, of whatever nature, relating to WSI, its
products and/or its services, including reports, files, memoranda,
records, software, credit cards, door and file keys, computers, computer
access codes, disks and instructional manuals and other physical or
personal property which you received, prepared or helped prepare in
connection with your employment with WSI or service on the Board of
Directors of WSI. You further agree that you will not keep any copies or
excerpts of any of the above items.
8. Except for claims arising out of the promises contained here, any and
all Claims (as defined below), which you may have against WSI (as defined
below) arising out of your employment with WSI or the termination of that
employment, are fully and completely settled, and all liability or
potential liability arising out of any such Claim is hereby released.
"Claims," as used in this paragraph 8 and in paragraph 9 shall include but
not be limited to those based upon or arising out of any alleged violation
of your civil rights, wrongful discharge, breach of contract, tort, common
law, statutory and constitutional claims, or any state, local or federal
statute including those prohibiting race, sex, sexual orientation, national
origin, disability, or perceived disability discrimination. "WSI," as used
in this paragraph 8 and in Paragraph 9, shall include, in addition to
Williams-Sonoma, Inc., any predecessor, successor, parent, subsidiary or
affiliate of Williams-Sonoma, Inc. or any officer, director, employee,
shareholder or affiliate of it.
9. You acknowledge that it is your intention to fully and finally resolve
and release any and all Claims, known or unknown, which may exist against
WSI and recognize that you may later discover facts in addition to or
different from those which you now know or believe to be true. In
furtherance of this intention, and to finally resolve all matters between
yourself and WSI, you agree to waive and relinquish any and all rights and
benefits afforded by Section 1542 of the Civil Code of the State of
California which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.
10. In addition to the release set forth in paragraphs 8 and 9 above, you
voluntarily and knowingly waive all rights or claims arising under the
Federal Age Discrimination in Employment Act. This waiver is given only
in exchange for consideration in addition to anything of value to which
you are entitled. This waiver does not waive rights or claims that may
arise after the date of execution of this Agreement. You acknowledge that
(a) this paragraph is written in a manner calculated to be understood by
you, (b) by reviewing this paragraph you have been advised in writing
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to consult with an attorney before executing this Agreement, (c) you are
being given a period of twenty-one days within which to consider this
paragraph, and (d) to the extent you execute this Agreement, including this
paragraph, before the expiration of the twenty-one day period, you do so
knowingly and voluntarily. You will have the right to cancel and revoke
this Agreement during a period of seven days following your execution of
it. In order to cancel and revoke this Agreement, you must deliver to WSI,
prior to the expiration of the seven-day period, a written notice of
cancellation and revocation.
11. You understand and agree that to the fullest extent permitted by law,
you are precluded from filing or pursuing any legal claim of any kind
against WSI at any time in the future, in any federal, state or municipal
court, administrative agency or other tribunal, arising out of any of the
claims that you have waived by virtue of executing this Agreement. You
agree not to file or pursue any such legal claims.
12. You agree that you will not, for a period of twelve months from the
Effective Date, directly or indirectly recruit, solicit or induce, or
attempt to induce, any employee, consultant or vendor of WSI to terminate
employment or any other relationship with WSI. You agree that you will
not at any time use Confidential Information to recruit, solicit, retain
or hire any of WSI's employees, consultants or vendors.
13. You agree that except as may be required by law, neither you nor any
member of your family will disclose to any individual or entity (other
than your legal, tax or financial advisors) the terms of this Agreement.
In the event that such disclosure is made, any outstanding obligations of
WSI under this Agreement will immediately terminate.
14. You agree to cooperate with WSI in connection with any currently pending
or future litigation, including, without limitation, by making yourself
reasonably available to testify in any action as reasonably requested
by WSI.
15. You acknowledge that money damages are an inadequate remedy for any
breach by you of any of the provisions of paragraphs 5, 6, 7 or 12 of this
Agreement, and therefore WSI shall be entitled to injunctive relief for any
such breach.
16. The provisions of this Agreement are severable. If any provision is held
to be invalid or unenforceable, it will not affect the validity or the
enforceability of any other provision.
17. Each of the parties has received, or had the opportunity to receive,
independent legal advice from legal counsel of such party's choice with
respect to the advisability of making the settlement provided for in this
Agreement and with respect to the advisability of executing this Agreement.
18. This Agreement is governed by California law without regard to conflict
of law principles.
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19. Any controversy, dispute, or claim between the parties to this Agreement,
including any claim arising out of, in connection with, or in relation to
the formation, interpretation, performance or breach of this Agreement
shall be settled exclusively by arbitration, before a single arbitrator,
in accordance with the rules of the American Arbitration Association.
20. This Agreement fully sets forth the terms of your separation of
employment from WSI and supersedes any prior discussions or agreements
whether verbal or written with regard to that subject. Please indicate
your agreement to such terms by signing the extra copy of it and returning
it to me.
Sincerely,
/s/ Howard Lester
Howard Lester
Chairman, Board of Directors
Williams-Sonoma, Inc.
ACCEPTED AND AGREED TO:
/s/ Dale W. Hilpert
_______________________
Dale W. Hilpert
01/13/03
_______________________
Date
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