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EXHIBIT 10.11
AMENDED AND RESTATED EXECUTIVE DEFERRAL PLAN
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WILLIAMS-SONOMA, INC.
EXECUTIVE DEFERRAL PLAN
Williams-Sonoma, Inc. (the "Company") hereby adopts this Second Amendment
and Restatement of the Williams-Sonoma, Inc. Executive Deferral Plan effective
as of January 1, 1999, with reference to the following facts:
A. Effective as of July 1, 1995, the Company adopted the Williams-Sonoma,
Inc. Executive Deferral Plan (the "Plan") to provide supplemental retirement
income benefits for a select group of management and highly compensated
employees.
B. Effective as of January 1, 1998, the Company amended and restated the
Plan in its entirety.
C. The Company wishes again to amend and restate the Plan in its entirety
to enhance certain benefits provided to Participants and to clarify certain
provisions of the Plan.
NOW, THEREFORE, the Plan is hereby amended and restated in its entirety,
effective as of January 1, 1999, as follows:
ARTICLE I
TITLE AND DEFINITIONS
I.1 TITLE.
This Plan shall be known as the Williams-Sonoma, Inc. Executive Deferral
Plan.
I.2 DEFINITIONS.
Whenever the following words and phrases are used in this Plan, with the
first letter capitalized, they shall have the meanings specified below.
"Beneficiary" or "Beneficiaries" shall mean the person or persons
designated under Article VII.
"Board of Directors" or "Board" shall mean the Board of Directors of the
Company.
"Bonus" shall mean any incentive compensation payable to a Participant in
addition to the Participant's Salary.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" shall mean the Committee appointed by the Board to administer
the Plan in accordance with Article VII.
"Company" shall mean Williams-Sonoma, Inc., any successor corporation and
each corporation which is a member of a controlled group of corporations (within
the meaning of Section 414(b) of the Code) of which Williams-Sonoma, Inc. is a
member.
"Compensation" shall mean the Salary and Bonus that the Participant
receives for services rendered to the Company.
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"Deferral Account" shall mean the bookkeeping account maintained by the
Committee for each Participant under Article IV, which shall be the sum of the
Participant's Plan Year Subaccounts.
"Disability" shall mean a period of disability during which a Participant
qualifies for benefits under the Company's group long term disability plan or,
if a Participant does not participate in such a plan, a period of disability
during which the Participant would have qualified for benefits under such a plan
had the Participant been a participant in such a plan, as determined in the sole
discretion of the Committee. If the Company does not sponsor such a plan,
Disability shall be determined by the Committee in its sole discretion.
"Distributable Amount" shall mean the amount credited to a Participant's
Plan Year Subaccount as of the date of distribution or withdrawal under Section
6.5.
"Eligible Employee" shall mean each member of a group of select management
or highly compensated employees of the Company who is selected by the Committee
to participate in the Plan.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Fund" or "Funds" shall mean one or more of the mutual funds or investment
vehicles selected by the Committee pursuant to Section 3.2(a).
"Initial Election Period" for an Eligible Employee shall mean the 30-day
period following the date on which the Committee notifies an employee that he or
she has been selected as an Eligible Employee.
"Participant" shall mean any Eligible Employee who elects to defer
Compensation in accordance with Section 3.l.
"Payment Eligibility Date" shall mean (a) for the Plan Year Subaccount for
Plan Years before 1999, the date (which shall be the first day of a calendar
quarter) specified by the Participant on a form provided by the Committee prior
to July 30, 1995 or, if later, within 30 days of the date on which such person
became a Participant, and (b) for each Plan Year Subaccount for the 1999 Plan
Year and later Plan Years, the date (which shall be the first day of a calendar
year at least three years after the first day of the Plan Year for which the
Plan Year Subaccount is maintained) specified by the Participant on a form
prescribed by the Committee when the Participant makes a valid election to defer
Salary for the Plan Year for which the Plan Year Subaccount is maintained. If
the Participant specifies no Payment Eligibility Date for a Plan Year
Subaccount, the Payment Eligibility Date shall be the first day of the calendar
quarter following the Participant's death, Disability, Retirement, or
Termination of Employment.
"Plan" shall mean the Williams-Sonoma, Inc. Executive Deferral Plan set
forth herein.
"Plan Year" shall mean the 12 consecutive month period beginning January
1, and ending December 31, except that the first Plan Year shall be a short year
beginning July 1, 1995 and ending December 31, 1995.
"Plan Year Subaccount" shall mean the bookkeeping account maintained by
the Committee for each Participant under Article IV to reflect, for each Plan
Year, the deferrals of Salary made by such Participant for such Plan Year, the
deferrals of Bonuses made by such Participant for the fiscal year of the Company
which includes the last day of such Plan Year, deemed earnings credited thereon,
and withdrawals and distributions debited thereto. The Committee shall maintain
a single Plan Year Subaccount for all Plan Years before 1999.
"Retirement" shall mean a Participant's Termination of Employment on or
after his or her attainment of both age 55 and five Years of Service for any
reason other than a leave of absence approved
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by the Committee, death, or Disability. For purposes of determining whether a
Participant has "Retired," "Years of Service" shall mean the total number of
full years in which a Participant has been continuously employed by the Company.
For purposes of this definition, a year of employment shall be a 365 day period
(or 366 day period in the case of a leap year) that, for the first year of
employment, commences on the employee's date of hire and that, for any
subsequent year, commences on an anniversary of that hiring date. The Committee
may, in its sole discretion, credit a Participant with any partial year of
employment. Periods during which an Eligible Employee is on a paid leave of
absence or suffers from a Disability shall be deemed to be periods of continuous
employment.
"Retirement Payment Eligibility Date" shall mean the date (which shall be
the first day of a calendar year) a number of years after the Participant's
Retirement or Disability, which such number shall be specified by the
Participant on a form provided by the Committee within the Initial Election
Period, or, if the Participant does not file the form within the Initial
Election Period, at least one year before the Participant's Retirement or
Disability. If the Participant does not validly specify a Retirement Payment
Eligibility Date, the Retirement Payment Eligibility Date shall be the first day
of the calendar quarter following the Participant's Retirement or Disability.
"Salary" shall mean the Participant's base pay.
"Termination of Employment" shall mean the ceasing of a Participant's
employment with the Company for any reason other than a leave of absence
approved by the Committee, death, or Disability. A Participant shall not be
considered to have had a Termination of Employment by virtue of a change in
employment from one corporation which is a member of the controlled group of
corporations (within the meaning of Section 414(b) of the Code) constituting the
Company to another such member. However, if the corporation which employs a
Participant ceases to be a member of the controlled group of corporations
constituting the Company as a result of a sale or other corporate
reorganization, such sale or other corporate reorganization shall be treated as
the Participant's Termination of Employment unless, immediately following such
sale or reorganization and without any break in employment, the Participant
remains employed by another member of the controlled group of corporations
constituting the Company, or the former member of the controlled group which
employs the Participant assumes liability for the benefits of the Participant
under this Plan.
ARTICLE II
PARTICIPATION
II.1 PARTICIPATION.
An Eligible Employee shall become a Participant in the Plan by electing to
defer all or a portion of his or her Compensation in accordance with Section
3.1. The Committee, in its discretion, may require an Eligible Employee, as a
condition to becoming a Participant, to complete an application for the life
insurance benefit described in Section 6.3(a), and to comply with various
medical underwriting requirements of the insurance company.
II.2 CONTINUING PARTICIPATION.
An Eligible Employee who becomes a Participant shall continue to be a
Participant until all of his benefits are distributed under this Plan. The
Committee may determine at any time, in its sole discretion, that a Participant
is no longer an Eligible Employee. Such a Participant shall continue to be a
Participant in this Plan until all of his benefits are distributed under this
Plan, but, from and after the first day of the first Plan Year beginning after
such determination, such Participant shall not be entitled to make any further
deferrals of Compensation under Article III.
ARTICLE III
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DEFERRAL ELECTIONS
III.1 ELECTIONS TO DEFER COMPENSATION.
(a) Initial Election Period. Each Eligible Employee may elect to defer
Compensation by filing with the Committee an election that conforms to the
requirements of this Section 3.1, on a form provided by the Committee, no later
than the last day of his or her Initial Election Period.
(b) General Rule. Subject to the limitations set forth in paragraphs (c)
and (d) below, the amount of Compensation which an Eligible Employee may elect
to defer is as follows:
(1) Any whole percentage of Salary up to 100%; and/or
(2) Any whole percentage or dollar amount of Bonus up to 100%.
(c) Maximum Deferrals. A Participant shall not be entitled to defer an
amount of his Salary or Bonus for any Plan Year to the extent that the amount of
the Salary or Bonus remaining undeferred for that Plan Year is less than the
amount of payroll taxes which the Company will owe on his Compensation and all
other compensation he receives from the Company in that Plan Year. An election
to defer Salary or Bonus shall not be effective to the extent it exceeds the
maximum amount set forth in this Section 3.1(b).
(d) Minimum Deferrals. For each Plan Year for which a Participant elects
to defer any portion of his Salary, the minimum percentage of Salary which may
be deferred under paragraph (b)(1) of this Section 3.1 is 5%. This 5% minimum
deferral for any Plan Year shall be reduced to a lesser percentage (but not
below zero percent) if the Participant deferred any portion of his or her Bonus
paid with respect to the fiscal year of the Company which included the last day
of the preceding Plan Year (the "Prior Year Bonus"). The amount of such
reduction shall be the number of percentage points determined by (1) dividing
the amount of the Prior Year Bonus by the amount of the Participant's annual
Salary at the beginning of the Plan Year for which the minimum deferral is being
computed, and (2) multiplying by 10. For example, if a Participant receives a
Salary of $200,000 for the Plan Year for which the minimum deferral is being
computed, and deferred $20,000 of his Prior Year Bonus, the minimum deferral
will be reduced by (1) $20,000 divided by $200,000, or .10, multiplied by (2)
10, to arrive at a reduction in the maximum percentage of 1.0%. The maximum
deferral percentage will therefore be 5% minus 1%, or 4%.
(e) Effect of Initial Election. An election to defer Compensation made
during an Initial Election Period shall be effective with respect to Salary
earned during the first pay period beginning after the end of the Initial
Election Period and with respect to the Bonus payable for services rendered
during the Company's fiscal year which includes the last day of the Plan Year in
which the election is made.
(f) Duration of Salary Deferral Election. Any Salary deferral election
made under paragraph (a) or paragraph (h) of this Section 3.1 shall be
irrevocable with respect to the Plan Year for which it is made, and shall remain
in effect, notwithstanding any change in the Participant's Salary, until changed
or terminated in accordance with the terms of this paragraph (f); provided,
however, that such election shall terminate under Section 2.2 for any Plan Year
for which the Participant is not an Eligible Employee, or pursuant to Section
3.1(i). Subject to the maximum deferral requirement of Section 3.1(c) and the
minimum deferral requirement of Section 3.1(d), a Participant may increase,
decrease or terminate his or her Salary deferral election, effective for Salary
earned during pay periods beginning after any January 1, by filing a new
election, in accordance with the terms of this Section 3.1, with the Committee
during the preceding December.
(g) Duration of Bonus Deferral Election. Any Bonus deferral election made
under paragraph (a) or paragraph (h) of this Section 3.1 shall be irrevocable
and shall apply only to the Bonus
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payable with respect to services performed during the Company's fiscal year
which includes the last day of the Plan Year for which the election is made. For
each subsequent fiscal year, an Eligible Employee may make a new election,
subject to the limitations set forth in this Section 3.1, to defer a percentage
of his or her Bonus payable with respect to services performed during such
subsequent fiscal year. Such election shall be on forms provided by the
Committee and shall be made during the month of September of the Plan Year which
ends within such fiscal year.
(h) Elections other than Elections during the Initial Election Period.
Subject to the limitations of paragraphs (c) and (d) above, any Eligible
Employee who fails to elect to defer compensation during his or her Initial
Election Period may subsequently become a Participant, and any Eligible Employee
who has terminated a prior Salary deferral election may elect to again defer
Salary, by filing an election, on a form provided by the Committee, to defer
Compensation as described in paragraph (b) above. An election to defer Salary
must be filed during the month of December and will be effective for Salary
earned during pay periods beginning after the following January 1. An election
to defer the Bonus must be filed during the month of September and will be
effective for the Bonus paid with respect to services performed during the
Company's fiscal year which includes such month of September.
(i) At any time during a Plan Year, a Participant may elect, by written
notice to the Committee on a form prescribed by the Committee, to suspend
deferrals of Salary for the remainder of the Plan Year.
III.2 INVESTMENT ELECTIONS.
(a) The Committee shall select the Funds whose performance will measure
the amounts to be credited to the Deferral Accounts of Participants under
paragraph (c) of Article IV. The selection of funds shall be for bookkeeping
purposes only, and the Company shall not be obligated actually to invest any
money in the Funds, or to acquire or maintain any actual investment. The
Committee may, in its discretion, change its selection of the Funds at any time.
If a Participant has elected pursuant to Section 3.2(b) to invest all or a
portion of his Plan Year Subaccount in a Fund which the Committee decides to
discontinue, his Plan Year Subaccount shall be invested after such
discontinuance in the continuing Fund which the Committee determines, in its
discretion, most nearly resembles the discontinued Fund.
(b) The Committee shall provide each Participant with a list of the Funds
available for hypothetical investment, and the Participant shall designate, when
the Participant makes deferral elections under Section 3.1, on a form provided
by the Committee, one or more of such Funds in which each of his or her Plan
Year Subaccounts will be deemed to be invested. The Participant may make a
separate designation for each of his or her Plan Year Subaccounts. In making the
designation pursuant to this Section 3.2(b), the Participant may specify that
all or any whole percentage of at least 10% of his or her Plan Year Subaccount
balance be deemed to be invested in one or more of Funds.
(c) On or prior to the twentieth day of any calendar month (or later day
prescribed by the Committee, but not later than the last day of the calendar
month), a Participant may change the designation of the Funds in which the
balances of any of his Plan Year Subaccounts will be deemed to be invested. Such
change may be made with respect to any whole percentage of at least 10% of a
Plan Year Subaccount balance. Such change shall be made by filing with the
Committee an election on a form provided by the Committee. Such change shall be
effective as of the first day of the following calendar month.
ARTICLE IV
DEFERRAL ACCOUNT
The Committee shall establish and maintain the Plan Year Subaccounts and
the Deferral Account (which shall be the sum of all Plan Year Subaccounts) for
each Participant under the Plan, which
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shall be merely bookkeeping accounts and which need not represent any actual
assets. Each Plan Year Subaccount of each Participant shall be further divided
into separate subaccounts ("Fund Subaccounts"), each of which corresponds to a
Fund elected by the Participant pursuant to Section 3.2(b). Each Plan Year
Subaccount of each Participant shall be credited as follows:
(a) Within five business days after deferred Salary has been withheld from
a Participant's paycheck, the Committee shall credit each of the Participant's
Fund Subaccounts with amounts equal to the deferred Salary in accordance with
the Participant's election under Section 3.2(b); that is, the portion of the
Participant's deferred Salary that the Participant has elected to be deemed to
be invested in a certain Fund shall be credited to the Fund Subaccount
corresponding to that Fund.
(b) Within five business days after the payment of a Bonus, the Committee
shall credit the Participant's Fund Subaccounts with amounts equal to the
portion of the Bonus which the Participant has deferred in accordance with the
Participant's election under Section 3.2(b); that is, the portion of the
Participant's deferred Bonus that the Participant has elected to be deemed to be
invested in a certain Fund shall be credited to the Fund Subaccount
corresponding to that Fund.
(c) At least once in each calendar month, each Fund Subaccount of a
Participant's Plan Year Subaccount shall be credited with deemed earnings on the
Fund corresponding to that Fund Subaccount. The Committee shall determine the
exact times and method for crediting such deemed earnings; provided, however,
that the exact times for crediting such deemed earnings shall be uniform among
all Participants and the exact method for crediting such deemed earnings as of
any time shall be uniform among all Participants.
(d) Any distribution, installment or withdrawal from a Participant's Plan
Year Subaccount shall be charged to the Plan Year Subaccount as soon as
practicable after such distribution, installment or withdrawal is made. The
amount of a distribution, installment, or withdrawal charged to a Participant's
Plan Year Subaccount shall be charged to the Fund Subaccounts in such Plan Year
Subaccount in the proportions of the relative balances of such Fund Subaccounts
as of the date such distribution, installment or withdrawal is charged to the
Plan Year Subaccount.
ARTICLE V
VESTING
Subject to the provisions of Sections 6.1(e), 6.5, 6.7, 11.1, 11.2 and
11.6, a Participant's Deferral Account shall be 100% vested at all times.
ARTICLE VI
DISTRIBUTIONS
VI.1 DISTRIBUTION ON RETIREMENT OR DISABILITY.
(a) Unless a Participant makes a valid election under Section 6.1(b) and
except as provided in Section 6.1(c), a Participant who becomes Disabled or who
Retires shall receive the balance in his or her Deferral Account in the form of
quarterly installments over 15 years beginning on his or her Retirement Payment
Eligibility Date.
(b) Notwithstanding the foregoing, a Participant may elect, pursuant to
this Section 6.1(b), to have the balance in his or her Deferral Account paid in
one of the following optional forms on his or her Retirement Payment Eligibility
Date:
(1) a cash lump sum payable on the Participant's Retirement Payment
Eligibility Date, or
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(2) quarterly installments over five, 10 or 20 years beginning on
the Participant's Retirement Payment Eligibility Date.
An election under this Section 6.1(b) shall be valid only if it is made in
writing in a form prescribed by the Committee either (i) during the Initial
Election Period, or (ii) at least one year before the Participant's Retirement
Payment Eligibility Date.
(c) Notwithstanding the provisions of Sections 6.1(a) and (b), (i) if the
total balance of a Participant's Deferral Account as of his or her Retirement
Payment Eligibility Date is $25,000 or less, such balance in such Deferral
Account shall automatically be distributed in the form of a cash lump sum as
soon as practicable following the Retirement Payment Eligibility Date.
(d) If a Participant's benefits are paid in installments, the
Participant's Deferral Account shall continue to be credited with deemed
earnings pursuant to paragraph (c) of Article IV until all amounts credited to
his or her Deferral Account have been distributed. Such installments shall be as
nearly equal as possible consistent with the requirement of the preceding
sentence.
(e) If a Participant has begun to receive distributions under this Section
6.1 in the form of installments, the Participant may elect to receive
installments over a shorter period of time than the period originally in effect
under Section 6.1(a) or elected under Section 6.1(b), subject to the following
conditions:
(i) such shorter period of time over which the installments shall be
paid shall be five, 10 or 15 years from the Retirement Payment Eligibility Date;
(ii) the election to receive installments over a shorter period of
time shall be made by filing a form prescribed by the Committee with the
Committee at least 15 days before an installment would otherwise be payable;
(iii) ten percent of the balance of the Deferral Account as of the
date the Participant makes the election by filing the form referred to in
Section 6.1(e)(ii) shall be permanently forfeited and the Company shall have no
obligation to the Participant or his Beneficiary with respect to such forfeited
amount;
(iv) the amount distributed in installments over the shorter period
elected by the Participant under this Section 6.1(e) shall be 90% of the balance
of the Deferral Account as of the date the Participant makes the election by
filing the form referred to in Section 6.1(e)(ii).
6.2 SITUATIONS OTHER THAN RETIREMENT, DISABILITY OR DEATH.
The balance of the Deferral Account of a Participant whose Termination of
Employment occurs for any reason other than Retirement, Disability or death
shall be paid to the Participant in the form of a cash lump sum as soon as
practicable following the Participant's Termination of Employment. If a
Participant has not had a Termination of Employment as of the Payment
Eligibility Date for any Plan Year Subaccount, the balance of such Plan Year
Subaccount shall be paid to the Participant in the form of a cash lump sum on
the Payment Eligibility Date.
6.3 EXTENSION OF PAYMENT ELIGIBILITY DATE AND RETIREMENT PAYMENT ELIGIBILITY
DATE.
A Participant may elect to extend any Payment Eligibility Date or the
Retirement Payment Eligibility Date by filing a written election with the
Committee on a form prescribed by the Committee at least one year before such
Payment Eligibility Date or Retirement Payment Eligibility Date; provided,
however, that such extended Payment Eligibility Date or Retirement Payment
Eligibility Date shall be at least two years after the Payment Eligibility Date
or Retirement Payment Eligibility Date in effect before
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such extension. A Payment Eligibility Date or Retirement Payment Eligibility
Date which has been so extended may be further extended by filing another
election in the manner and at the time specified in this Section 6.3.
6.4 DEATH.
(a) If a Participant dies while employed by the Company, the following
benefits shall be provided: That portion of the death benefit of any life
insurance policy purchased by the Company to insure the life of the Participant
(the "Policy") which is equal to two times the Participant's annual Salary at
the time the Participant dies shall be paid to Participant's beneficiary under
the Policy by the insurance company which issued the Policy. Any such Policy
shall be subject to the conditions set forth in a "Split-Dollar Life Insurance
Agreement" between the Participant and the Company, pursuant to which the
Participant may designate a beneficiary with respect to the portion of the
Policy proceeds described in the preceding sentence in the event the Participant
dies prior to terminating employment with the Company. The Participant shall
have the right to designate and change such beneficiary (which need not be his
Beneficiary as determined under Article VIII) at any time on a form provided by
and filed with the insurance company, and the life insurance proceeds designated
in this Section 6.4(a) shall be paid to such beneficiary. The benefit payable
pursuant to this Section 6.4(a) shall be paid only if a Policy has been issued
on the Participant's life and is in force at the time of the Participant's death
and any such payment shall be subject to all conditions and exceptions set forth
in the Policy. A Participant who is entitled to a death benefit pursuant to this
Section 6.4(a) shall not be entitled to any other Company-paid group term life
insurance benefits from the Company under this Plan or any other Policy provided
by the Company. Notwithstanding any provision of this Plan or any other document
to the contrary, the Company shall not have any obligation to pay the
Participant or his Beneficiary any amounts described in this Section 6.4(a). Any
such amounts shall be payable solely from the proceeds of the Policy, and if no
Policy is in force, no payment shall be made. Furthermore, the Company is not
obligated to maintain any Policy; and no death benefit shall be payable under
this Section 6.4(a) if the Company has been notified by the Committee to
discontinue the Policy for the Participant. In addition, no Policy shall be
allocated to any Deferral Account.
(b) If a Participant dies before the beginning of installment payments
under Sections 6.1(a) or (b), the balance of his or her Deferral Account shall
be paid to the Participant's Beneficiary in a cash lump sum as soon as
practicable after the first day of the calendar quarter following the calendar
quarter in which the Participant dies. If a Participant dies after the beginning
of installment payments under Sections 6.1(a) or (b) but before receiving all of
such installments, his beneficiary shall receive a cash lump sum payment as soon
as practicable following the last day of the calendar month in which he dies
equal to the remaining balance of his Deferral Account as of such last day.
6.5 WITHDRAWALS.
A Participant shall be permitted to elect to withdraw amounts from his
Deferral Account as soon as practicable after the first day of any calendar
quarter, whether before or after his Termination of Employment or Payment
Eligibility Date, subject to the following restrictions:
(b) The election to take a withdrawal shall be made by filing a form
provided by and filed with the Committee prior to the end of any calendar month.
(c) The amount of the withdrawal shall equal 90% of the balance of the
Deferral Account as of the end of the calendar month in which the withdrawal
election is made.
(d) The amount described in subsection (b) above shall be paid in a single
cash lump sum as soon as practicable after the end of the calendar month in
which the withdrawal election is made.
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(e) If a Participant receives a withdrawal, the remaining 10% of the
balance (including the withdrawn amount) in his Deferral Account as of the date
of the withdrawal shall be permanently forfeited and the Company shall have no
obligation to the Participant or his Beneficiary with respect to such forfeited
amount.
(f) If a Participant receives a withdrawal, the following rules will apply
for the balance of the Plan Year in which the withdrawal election is made and
for the following Plan Year: (i) the Participant will be ineligible to
Participate in the Plan, and (ii) neither the Participant (nor his Beneficiary
or Beneficiaries) shall be entitled to death benefits under Section 6.4.
(g) A Participant will be limited to a maximum of two withdrawals during
all of his periods of Plan Participation.
6.6 DISTRIBUTION ON AN UNFORESEEABLE EMERGENCY.
The Committee may, pursuant to rules adopted by it and applied in a
uniform manner, accelerate the date of distribution of a Participant's Deferral
Account because of an "Unforeseeable Emergency" at any time; provided, however,
that any determination to accelerate the distribution of the Deferral Account of
any member of the Committee shall be made by the Board. Any acceleration shall
be limited to the amount necessary to meet the Unforeseeable Emergency. Subject
to the foregoing, payment of any amount with respect to which a Participant has
filed a request under this Section 6.6 shall be made as soon as practicable
after approval of such request by the Committee. "Unforeseeable Emergency" shall
mean an unforeseeable, severe financial condition resulting from (a) a sudden
and unexpected illness or accident of the Participant or his dependent (as
defined in Section 152(a) of the Code); (b) loss of the Participant's property
due to casualty; or (c) other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
Participant, but which may not be relieved through other available resources of
the Participant (including reimbursement or compensation by insurance,
liquidation of the Participant's assets, to the extent the liquidation of the
assets would not itself cause severe financial hardship, or by the cessation of
deferrals under the Plan), as determined by the Committee in accordance with
uniform rules adopted by it.
6.7 INABILITY TO LOCATE PARTICIPANT.
If the Committee is unable to locate a Participant or his or her
Beneficiary on any date on which a distribution is to be made from such
Participant's Deferral Account, the Company shall retain the distribution which
was to be made on such date until such time as the Committee can locate the
Participant or Beneficiary; provided, however, that the Company may deduct from
such retained distributions all taxes which are required to be withheld by the
Company. No additional earnings shall be credited pursuant to paragraph (c) of
Article IV on any distribution retained pursuant to this Section 6.7. If the
Committee is unable to locate a Participant or Beneficiary within five years
following a date on which a distribution is to be made from such Participant's
Deferral Account, the amount of such distribution shall be forfeited. In seeking
to locate a Participant or Beneficiary, the Committee may take any reasonable
action, but shall not be required to take any action other than communicating by
registered mail to the address or addresses last provided to the Committee by
the Participant or Beneficiary.
ARTICLE VII
ADMINISTRATION
7.1 COMMITTEE.
A Committee, consisting of not less than one person, shall be appointed by
and serve at the pleasure of the Board of Directors. The number of members
comprising the Committee shall be determined by the Board, which may from time
to time vary the number of members. A member of the
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Committee may resign by delivering a written notice of resignation to the Board.
The Board may remove any member by resolution at any time. Vacancies in the
membership of the Committee shall be filled by the Board.
7.2 COMMITTEE ACTION.
The Committee shall act at meetings by affirmative vote of a majority of
the members of the Committee. Any action permitted to be taken at a meeting may
be taken without a meeting if, prior or subsequent to such action, a written
consent to the action is signed by all members of the Committee, and such
written consent is filed with the minutes of the proceedings of the Committee. A
member of the Committee shall not vote or act upon any matter which relates
solely to himself or herself as a Participant. The Chairman or any other member
or members of the Committee designated by the Chairman may execute any
certificate or other written direction on behalf of the Committee.
7.3 POWERS AND DUTIES OF THE COMMITTEE.
The Committee shall enforce the Plan in accordance with its terms, shall
be charged with the general administration of the Plan and shall have full
discretion, power, and authority necessary to accomplish its purposes,
including, but not by way of limitation, the following:
(a) To construe and interpret the terms and provisions of this Plan;
(b) To compute and certify to the amount and kind of benefits
payable to Participants and their Beneficiaries;
(c) To maintain all records that may be necessary for the
administration of the Plan;
(d) To provide for disclosure of all information and the filing or
provision of all reports and statements to Participants, Beneficiaries or
governmental agencies as shall be required by law;
(e) To make and publish such rules for the regulation of the Plan
and procedures for the administration of the Plan as are not inconsistent with
the terms hereof;
(f) To appoint a plan administrator or any other agent, and to
delegate to them such powers and duties in connection with the administration of
the Plan as the Committee may from time to time prescribe; and
(g) To determine who are Eligible Employees, subject to the
limitations described in the Plan.
7.4 CONSTRUCTION AND INTERPRETATION.
The Committee shall have full discretion to construe and interpret the
terms and provisions of this Plan, which interpretation or construction shall be
final and binding on all parties, including but not limited to the Company and
any Participant or Beneficiary. The Committee shall administer such terms and
provisions in a uniform and nondiscriminatory manner and in full accordance with
any and all laws applicable to the Plan; provided, however, the Committee shall
have the discretion to determine whether an otherwise Eligible Employee is
selected to participate in the Plan.
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7.5 INFORMATION.
To enable the Committee to perform its functions, the Companies shall
supply full and timely information to the Committee on all matters relating to
the Compensation of all Participants, their death or other cause of termination,
and such other pertinent facts as the Committee may require.
7.6 COMPENSATION AND EXPENSES.
The members of the Committee shall serve without compensation for their
services hereunder. The Committee is authorized at the expense of
Williams-Sonoma, Inc. to employ such legal counsel, accountants, and other
advisers as it may deem advisable to assist in the performance of its duties
hereunder. Expenses and fees in connection with the administration of the Plan
shall be paid by Williams-Sonoma, Inc.
7.7 INDEMNITY.
To the fullest extent permitted by applicable law, Williams-Sonoma, Inc.
shall indemnify, hold harmless, and defend the Committee and each member
thereof, the Board of Directors, and any delegate of the Committee who is an
employee of a Company against any and all expenses, liabilities and claims,
including legal fees as they are incurred to defend against such liabilities and
claims arising out of their discharge in good faith of responsibilities under or
incident to the Plan, other than expenses and liabilities arising out of willful
misconduct. This indemnity shall not preclude such further indemnities as may be
available under insurance purchased by the Company or provided by the Company
under any bylaw, agreement or otherwise.
7.8 PARTICIPANT STATEMENTS.
Under procedures established by the Committee, a Participant shall receive
a statement with respect to such Participant's Deferral Account on a periodic
basis at least once with respect to each Plan Year.
ARTICLE VIII
BENEFICIARY DESIGNATION
8.1 BENEFICIARY.
Each Participant shall have the right, at any time, to designate his or
her Beneficiary(ies) (both primary as well as contingent) to receive any
benefits payable under the Plan to a beneficiary upon the death of a
Participant. The Beneficiary designated under this Plan may be the same as or
different from the Beneficiary designation under any other plan of the Company
in which the Participant participates.
8.2 BENEFICIARY DESIGNATION; CHANGE; SPOUSAL CONSENT.
A Participant shall designate his or her Beneficiary by completing and
signing the Beneficiary Designation Form, and returning it to the Committee or
its designated agent. A Participant shall have the right to change a Beneficiary
by completing, signing and otherwise complying with the terms of the Beneficiary
Designation Form and the Committee's rules and procedures, as in effect from
time to time. If the Participant names someone other than his or her spouse as a
Beneficiary, a spousal consent, in the form designated by the Committee, must be
signed by that Participant's spouse and returned to the Committee. Upon the
acceptance by the Committee of a new Beneficiary Designation Form, all
Beneficiary designations previously filed shall be cancelled. The Committee
shall be entitled to rely on the last Beneficiary Designation Form filed by the
Participant and accepted by the Committee prior to his or her death.
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8.3 ACKNOWLEDGMENT.
No designation or change in designation of a Beneficiary shall be
effective until received, accepted and acknowledged in writing by the Committee
or its designated agent.
8.4 NO BENEFICIARY DESIGNATION.
If a Participant fails to designate a Beneficiary as provided in Sections
8.1, 8.2 and 8.3 above or, if all designated Beneficiaries predecease the
Participant or die prior to complete distribution of the Participant's benefits,
then the Participant's spouse shall be the designated Beneficiary. If the
Participant has no surviving spouse, the benefits remaining under the Plan shall
be paid to the duly appointed and currently acting personal representative of
the Participant's estate (which shall include either the Participant's probate
estate or living trust) shall be the Beneficiary. In any case where there is no
such personal representative of the Participant's estate duly appointed and
acting in that capacity within 90 days after the Participant's death (or such
extended period as the Committee determines is reasonably necessary to allow
such personal representative to be appointed, but not to exceed 180 days after
the Participant's death), then Beneficiary shall mean the person or persons who
can verify by affidavit or court order to the satisfaction of the Committee that
they are legally entitled to receive the benefits under this Plan.
8.5 DOUBT AS TO BENEFICIARY.
If the Committee has any doubt as to the proper Beneficiary to receive
payments pursuant to this Plan, the Committee shall have the right, exercisable
in its discretion, to cause the Company to withhold such payments until this
matter is resolved to the Committee's satisfaction.
8.6 DISCHARGE OF OBLIGATIONS.
The payment of benefits under the Plan to a Beneficiary shall fully and
completely discharge the Company and the Committee from all further obligations
under this Plan with respect to the Participant, and that Participant's rights
under the Plan shall terminate upon such full payment of benefits.
8.7 DEATH OF SPOUSE OR DISSOLUTION OF MARRIAGE.
A Participant's Beneficiary designation shall be deemed automatically
revoked if the Participant names a spouse as Beneficiary and the marriage is
later dissolved. Without limiting the generality of the preceding sentence, the
interest in benefits of a spouse of a Participant who has predeceased the
Participant or whose marriage has been dissolved shall automatically pass to the
Participant, and shall not be transferrable by such spouse in any manner,
including but not limited to such spouse's will, nor shall such interest pass
under the laws of intestate succession.
ARTICLE IX
CLAIMS PROCEDURE
9.1 PRESENTATION OF CLAIM.
Any Participant or Beneficiary of a deceased Participant (such Participant
or Beneficiary being referred to below as a "Claimant") may deliver to the
Committee a written claim for a determination with respect to the amounts
distributable to such Claimant from the Plan. If such a claim relates to the
contents of a notice received by the Claimant, the claim must be made within 60
days after such notice was received by the Claimant. The claim must state with
particularity the determination desired by the Claimant. All other claims must
be made within 180 days of the date on which the event that caused the claim to
arise occurred. The claim must state with particularity the determination
desired by the Claimant.
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9.2 NOTIFICATION OF DECISION.
The Committee shall consider a Claimant's claim within a reasonable time,
and shall notify the Claimant in writing:
(i) that the Claimant's requested determination has been made, and
that the claim has been allowed in full; or
(ii) that the Committee has reached a conclusion contrary, in whole
or in part, to the Claimant's requested determination, and such notice must set
forth in a manner calculated to be understood by the Claimant:
(1) the specific reason(s) for the denial of the claim, or any
part of it;
(2) specific reference(s) to pertinent provisions of the Plan
upon which such denial was based;
(3) a description of any additional material or information
necessary for the Claimant to perfect the claim, and an explanation of why such
material or information is necessary; and
(4) an explanation of the claim review procedure set forth in
Section 9.3 below.
9.3 REVIEW OF A DENIED CLAIM.
Within 60 days after receiving a notice from the Committee that a claim
has been denied, in whole or in part, a Claimant (or the Claimant's duly
authorized representative) may file with the Committee a written request for a
review of the denial of the claim. Thereafter, but not later than 30 days after
the review procedure began, the Claimant (or the Claimant's duly authorized
representative):
(a) may review pertinent documents;
(b) may submit written comments or other documents; and/or
(c) may request a hearing, which the Committee, in its sole
discretion, may grant.
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9.4 DECISION ON REVIEW.
The Committee shall render its decision on review promptly, and not later
than 60 days after the filing of a written request for review of the denial,
unless a hearing is held or other special circumstances require additional time,
in which case the Committee's decision must be rendered within 120 days after
such date. Such decision must be written in a manner calculated to be understood
by the Claimant, and it must contain:
(d) specific reasons for the decision;
(e) specific reference(s) to the pertinent Plan provisions upon
which the decision was based; and
(f) such other matters as the Committee deems relevant.
9.5 ARBITRATION.
A Claimant's compliance with the foregoing provisions of this Article 9 is
a mandatory prerequisite to a Claimant's right to commence any arbitration
proceeding with respect to any claim for benefits under this Plan.
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ARTICLE X
ARBITRATION
Arbitration shall be the exclusive remedy for resolving any dispute or
controversy between the Company and any employee, Participant or Beneficiary,
including, but not limited to, any dispute regarding an employee's status as a
Participant, a Participant's employment or the termination of a Participant's
employment or any dispute regarding the application, interpretation or validity
of this Plan not otherwise resolved through the claims procedure set forth in
Article 9. Such arbitration shall be conducted in accordance with the then most
applicable rules of the American Arbitration Association. The arbitrator shall
be empowered to grant only such relief as would be available in a court of law.
In the event of any conflict between this Agreement and the rules of the
American Arbitration Association, the provisions of this Agreement shall be
determinative. If the parties are unable to agree upon an arbitrator, they shall
select a single arbitrator from a list designated by the office of the American
Arbitration Association having responsibility for the city in which the
Participant or Beneficiary last resided while employed by the Employer of seven
arbitrators, all of whom shall be retired judges who are actively involved in
hearing private cases or members of the National Academy of Arbitrators. If the
parties are unable to agree upon an arbitrator from such list, they shall each
strike names alternatively from the list, with the first to strike being
determined by lot. After each party has used three strikes, the remaining name
on the list shall be the arbitrator. The fees and expenses of the arbitrator
shall initially be borne equally by the parties; provided, however, that each
party shall initially be responsible for the fees and expenses of its own
representatives and witnesses. If the parties cannot agree upon a location for
the arbitration, the arbitrator shall determine the location. Judgment may be
entered on the award of the arbitrator in any court having jurisdiction. The
prevailing party in the arbitration proceeding, as determined by the arbitrator,
and in any enforcement or other court proceedings, shall be entitled to the
extent provided by law to reimbursement from the other party for all of the
prevailing party's costs (including but not limited to the arbitrator's
compensation), expenses and reasonable attorney's fees.
ARTICLE XI
MISCELLANEOUS
11.1 UNSECURED GENERAL CREDITOR.
Participants and their Beneficiaries, heirs, successors, and assigns shall
have no legal or equitable rights, claims, or interests in any specific property
or assets of any Company. No assets of the Company shall be held under any
trust, or held in any way as collateral security for the fulfilling of the
obligations of the Company under this Plan. This Plan shall not cause the
Company's assets to be pledged or restricted. The Company's obligation under the
Plan shall be merely that of an unfunded and unsecured promise of that Company
to pay money in the future, and the rights of the Participants and Beneficiaries
shall be no greater than those of unsecured general creditors of the Company.
The Company may, but need not, acquire investments corresponding to the Funds,
and it is not under any obligation to maintain any investment it may make. Any
such investments, if made, shall be in the name of the Company, and shall be its
sole property in which no Participant shall have any interest. The Plan is
intended to be an unfunded plan for purposes of Title I of ERISA.
11.2 RESTRICTION AGAINST ASSIGNMENT.
The Company shall pay all amounts payable hereunder only to the person or
persons designated by the Plan and not to or for any other person. No part of a
Participant's Deferral Account shall be liable for the debts, contracts, or
engagements of any Participant, his or her Beneficiary, or successors in
interest, nor shall a Participant's Deferral Account be subject to execution by
levy, attachment, or garnishment or by any other legal or equitable proceeding,
nor shall any such person have any right to alienate, anticipate, transfer,
commute, pledge, encumber, or assign any benefits or payments hereunder in any
manner whatsoever, except with regard to debts, contracts and engagements owed
to the Company. Any purported alienation, anticipation, transfer, commutation,
pledge, encumbrance, or assignment shall be
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void and of no effect, except with regard to debts, contracts and engagements
owed to the Company. If any Participant, Beneficiary or successor in interest is
adjudicated bankrupt, and the Participant's rights to distribution or payment
under the Plan are subject to involuntary transfer or assignment in any such
proceeding, the Committee may in its discretion cancel such distribution or
payment (or any part thereof) to or for the benefit of such Participant,
Beneficiary or successor in interest.
11.3 WITHHOLDING.
There shall be deducted from each payment to a Participant or Beneficiary
made under the Plan all taxes which are required to be withheld by the Company
from such payment. If any taxes, including employment taxes with respect to the
Deferral Account, are required to be withheld prior to the time of payment, the
Company may withhold such amounts from other compensation paid to the
Participant.
11.4 AMENDMENT, MODIFICATION, SUSPENSION OR TERMINATION.
The Board of Directors may amend, modify, suspend or terminate the Plan in
whole or in part, except that no amendment, modification, suspension or
termination shall have any retroactive effect to reduce any amounts allocated to
a Participant's Deferral Account on the date of such termination. On the
termination of this Plan, the Board may cause the Deferral Accounts of
Participants to be immediately paid out in cash lump sum payments, or to be paid
at any other time or in any other manner the Board may determine, but not later
than the times such Deferral Accounts would otherwise be paid to Participants or
Beneficiaries.
11.5 GOVERNING LAW.
This Plan shall be construed, governed and administered in accordance with
the laws of the State of California, to the extent not preempted by ERISA.
11.6 RECEIPT AND RELEASE.
Any payment to a Participant or the Participant's Beneficiary in
accordance with the provisions of the Plan shall, to the extent thereof, be in
full satisfaction of all claims against the Committee and the Company. The
Committee may require such Participant or Beneficiary, as a condition precedent
to such payment, to execute a receipt and release to such effect.
11.7 PAYMENTS ON BEHALF OF PERSONS UNDER INCAPACITY.
In the event that any amount becomes payable under the Plan to a person
who, in the sole judgment of the Committee, is considered by reason of physical
or mental condition to be unable to give a valid receipt therefor, the Committee
may direct that such payment be made to any person found by the Committee, in
its sole judgment, to have assumed the care of such person. Any payment made
pursuant to such determination shall constitute a full release and discharge of
the Committee and the Company.
11.8 NO EMPLOYMENT RIGHTS.
Participation in this Plan shall not confer upon any person any right to
be employed by the Company nor any other right not expressly provided hereunder.
11.9 HEADINGS NOT PART OF AGREEMENT.
Headings and subheadings in this Plan are inserted for convenience of
reference only and are not to be considered in the construction of the
provisions hereof.
11.10 ERISA.
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This Plan constitutes a pension benefit plan within the meaning of Section
3(2) of ERISA, which is unfunded and maintained for the purpose of providing
deferred compensation for a select group of management or highly compensation
employees. This Plan constitutes the "Summary Plan Description" required under
ERISA, as well as the governing document of the Plan. The Committee is the
Administrator of the Plan, within the meaning of Section 3(16) of ERISA, and the
Named Fiduciary thereof, within the meaning of Section 402 of ERISA, is the
Committee.
11.11 VALIDITY.
In case any provision of this Plan shall be illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining parts
hereof, but this Plan shall be construed and enforced as if such illegal and
invalid provision had never been inserted herein.
11.12 DISTRIBUTION IN THE EVENT OF TAXATION.
If, for any reason, all or any portion of a Participant's benefit under
this Plan becomes taxable to the Participant prior to receipt, a Participant may
petition the Committee for a distribution of that portion of his or her benefit
that has become taxable. Upon the grant of such a petition, which the Committee
may grant or refrain from granting in its sole discretion, the Company shall
distribute to the Participant immediately available funds in an amount equal to
the taxable portion of his or her benefit (which amount shall not exceed the
balance in such Participant's Deferral Account as of the last day of the
calendar month before such distribution). If the petition is granted, the tax
liability distribution shall be made within ninety (90) days of the date when
the Participant's petition is granted.
IN WITNESS WHEREOF, Williams-Sonoma, Inc. has caused this document to be
executed on this 23rd day of November, 1998, to be effective as of January 1,
1999.
WILLIAMS-SONOMA, INC.
By: /s/ Dennis A. Chantland
-------------------------------------
Dennis A. Chantland
Executive Vice President
Chief Administrative Officer
Secretary
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