Proxy Statement Pursuant to Section 14(a) ~~OF THE SECURITIES EXCHANGE ACT OF~~of the Securities

[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12 ~~Williams-Sonoma, Inc. - -------------------------------------------------------------------------------- (Name~~

(Name of Registrant as Specified Inin Its Charter) ~~- -------------------------------------------------------------------------------- (Name~~

(1) Title of each class of securities to which transaction applies: ~~---------------------------------------------------------------------~~

(2) Aggregate number of securities to which transaction applies: ~~---------------------------------------------------------------------~~

(4) Proposed maximum aggregate value of transaction: ~~---------------------------------------------------------------------~~

(5) Total fee paid: ~~---------------------------------------------------------------------~~

(1) Amount Previously Paid: ~~---------------------------------------------------------------------~~

(2) Form, Schedule or Registration Statement No.: ~~---------------------------------------------------------------------~~

(3) Filing Party: ~~---------------------------------------------------------------------~~

(4) Date Filed: ~~---------------------------------------------------------------------~~ 2 LOGO --------------------------------------------------------- W I L L I A M S - S O N O M A ---------------------------------------------------------

NOTICE OF 2003 ANNUAL MEETING OF SHAREHOLDERS ~~TO THE SHAREHOLDERS: The Annual Meeting of Shareholders of Williams-Sonoma, Inc., a California corporation (the "Company"), will be held at the Company's offices,~~

San Francisco, California 94109 Wednesday, May 26, 1999 commencing at 10:00 a.m. (Pacific Daylight Time) for the following purposes: (1) To elect ten directors to serve until the next annual meeting of shareholders or until their respective successors shall be elected and qualified. (2) To act on a proposal to approve an amendment to Article IV of the Company's Articles of Incorporation. (3) To ratify the selection of Deloitte & Touche LLP as independent accountants for the fiscal year ending January 30, 2000. (4) To transact such other business as may properly come before the meeting or any adjournment or postponement thereof. The Board of Directors has fixed the close of business on March 30, 1999, as the record date for the determination of shareholders entitled to notice of and to vote at the meeting or any adjournment or postponement thereof. A list of such shareholders will be available for inspection at the Annual Meeting by any shareholder and, for 10 days prior to the Annual Meeting, at the Company's offices at the address specified above. Financial and other information concerning the Company is contained in the enclosed Annual Report for the fiscal year ended January 31, 1999. By Order of the Board of Directors, Dennis A. Chantland, Secretary San Francisco, California April 16, 1999 WHETHER YOU PLAN TO ATTEND THE MEETING OR NOT, PLEASE DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT AS PROMPTLY AS POSSIBLE IN THE ENCLOSED STAMPED ENVELOPE. IF YOU ATTEND THE MEETING, YOU MAY ORALLY REVOKE THE PROXY AND VOTE IN PERSON EVEN THOUGH YOU HAVE RETURNED YOUR PROXY. 3 WILLIAMS-SONOMA, INC. 3250 VAN NESS AVENUE SAN FRANCISCO, CALIFORNIA 94109 ------------------------------ PROXY STATEMENT ------------------------------

PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS ~~TO BE HELD ON WEDNESDAY, MAY 26, 1999 This proxy statement (the "Proxy Statement")~~

Our Board submits this Proxy Statement and the enclosed proxy ~~are furnished in connection with the solicitation of proxies by the Board of Directors of Williams-Sonoma, Inc., a California corporation (the "Company"),~~card for use at the Annual Meeting of Shareholders, ~~of the Company (the "Annual Meeting"),~~ to be held on Wednesday, May ~~26, 1999,~~28, 2003, and for any ~~adjournments~~adjournment or ~~postponements~~postponement thereof. ~~The~~Our Annual Report to ~~the shareholders of the Company~~Shareholders for the fiscal year ended ~~January 31, 1999,~~February 2, 2003, including ~~the~~our financial statements of ~~and other information concerning, the Company~~fiscal 2002, is also enclosed. The Company anticipates that this Proxy Statement and accompanying form of proxy will first be mailed or given to its shareholders on or about April 16, 1999. A proxy may be revoked by filing with

What is the ~~Secretary~~purpose of the ~~Company a written~~Annual Meeting?


	•	The election of the full board of directors;

	•	The amendment of our Restated Articles of Incorporation, as amended, to restate the provisions governing the company’s authority to indemnify its directors, officers, employees and other agents;

	•	The ratification of the selection of Deloitte & Touche LLP as independent auditors for the fiscal year ending February 1, 2004; and

	•	Such other business as may properly come before the meeting or any adjournment or postponement thereof, including shareholder proposals.

Only shareholders of record at the close of business on March 31, 2003, are entitled to receive notice of ~~revocation or a duly executed proxy bearing a later date, or by attending~~and to vote at the Annual ~~Meeting~~Meeting. This is known as the record date. Each holder of our common stock will be entitled to one vote for each share of our common stock owned as of the record date. As of the record date, there wereXXXXXX shares of our common stock outstanding and ~~voting in person. Attendance~~entitled to vote, held of record byXXX shareholders.

You may vote in person at the Annual Meeting ~~does not itself revoke an otherwise valid proxy; however, any shareholder who attends such meeting may orally revoke his~~or by mailing in the enclosed proxy atcard in the enclosed envelope before the Annual ~~Meeting and vote in person.~~Meeting.

If a ~~shareholder specifies a choice on any matter to be acted upon by means of the accompanying~~signed proxy ~~and the proxy is properly executed and received prior to the Annual Meeting, the proxy will be voted in accordance with the specifications made. If an executed proxy~~card is returned without any ~~specifications as to~~indication on how its shares should be voted, votes will be cast ~~for~~FOR the election ~~of each~~ of the directors named in this Proxy ~~Statement, in favor of~~Statement; FOR the described amendment to ~~the~~our Restated Articles of Incorporation, as amended; and ~~in favor of~~FOR the ratification of the selection of Deloitte & Touche LLP as our independent auditors for the ~~Company's independent accountants. In addition,~~fiscal year ending February 1, 2004.

A majority of our shareholders as of the record date must be present in person or by proxy at the Annual Meeting to transact business. This is known as a quorum. Your shares that are voted in person or by signed proxy card, including abstentions and broker non-votes, will be included in the calculation of the number of shares considered to be present for purposes of determining whether there is a quorum at the Annual Meeting.

The term broker non-vote refers to shares that are held by brokers that are present in person or represented by a proxy at the Annual Meeting but that are not voted because the brokers were prohibited from exercising discretionary authority to vote the shares.

You have cumulative voting rights only with respect to the election of directors. Cumulative voting rights entitle you to cast as many votes as are equal to the number of shares owned by you as of the record date multiplied by the number of directors to be elected. Your cumulative votes may be cast for one director nominee or distributed among two or more director nominees. To engage in ~~their sole discretion upon~~cumulative voting, one or more shareholders of record as of the record date, must nominate a director nominee or nominees before voting begins and must give notice at the Annual Meeting of the intention to cumulate votes before voting begins. If any shareholder gives such notice, then every shareholder entitled to vote may cumulate votes for nominees.

The nine director nominees receiving the highest number of votes at the Annual Meeting will be elected as directors. This is called a plurality. Your proxy will be voted FOR each of the director nominees unless a signed proxy card is marked “withhold authority” as to a particular nominee or nominees for director. Shares not voted, either by marking “abstain” on your proxy card or otherwise, will have no impact on the election of directors.

How many votes are needed to approve the proposals, other ~~business as~~than the election of directors?

Proposal No. 2 (Amendment of our Articles of Incorporation) requires the affirmative vote of a majority of our outstanding shares of common stock. Proposal No. 3 (Ratification of Auditors) requires the affirmative vote of a majority of the votes cast at the Annual Meeting. A signed proxy card marked “abstain” with respect to a proposal will not be voted on that proposal.

No, we did not receive notice, before March 1, 2003, of any shareholder proposals for this year’s Annual Meeting.

You may ~~properly come before~~revoke your proxy prior to the ~~meeting~~close of voting at the Annual Meeting by either 1) sending written notice of revocation to our Secretary; 2) sending a signed proxy card bearing a later date to our Secretary; or 3) by attending the Annual Meeting, revoking your proxy and ~~any adjournments~~ voting in person.

It means that you have multiple accounts with brokers and/or ~~postponements thereof. All~~our transfer agent. You should vote all of these shares. If you are interested in consolidating your accounts, you may contact your broker or our transfer agent, Wells Fargo Shareowner Services, at 800-468-9716.

Who pays the expenses incurred in connection with the solicitation of proxies?

We pay all of the expenses ~~involved~~incurred in preparing, assembling and mailing this Proxy Statement and the material enclosed will be paid by the Company. Copies of solicitation material will be furnished to brokers and others holding common stock of the Company to forward to their principals, and the Company will reimburse them for reasonable expenses in doing so. The Company expects that some of its officers or employees (none of whom will receive special compensation) will solicit proxies personally and by telephone or other means. In addition, the Company hasmaterials enclosed. We retained ~~the services of~~ Skinner & Company to assist in the solicitation of proxies at an estimated cost of ~~$3,500. VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS Only shareholders~~$5,000. Some of ~~record~~our officers or employees may solicit proxies personally and by telephone or other means. None of those officers or employees will receive special compensation for such services.

During fiscal 2002, our Board held a total of eight meetings and did not act by unanimous written consent. Each incumbent director, except James A. McMahan, Heather Reisman and Richard T. Robertson, attended at ~~the close~~least 75% of ~~business on March 30, 1999 will be entitled~~our Board meetings.

What would happen if a nominee is unwilling or unable to notice of and to vote at the Annual Meeting. At the close of business on March 30, 1999, there were 55,808,325 outstanding shares of the Company's common stock (the "Common Stock"), the only class of stock outstanding, held of record by 551 shareholders. The closing sales price for the Common Stock on March 30, 1999, as reported by the New York Stock Exchange (NYSE), was $28.19 per share. 4 Each share of Common Stock is entitled to one vote, except that shareholders may cumulate their votes for the election of directors. Under California law, no shareholder may cumulate votes unless the candidate's name has been placed in nominationserve prior to the voting and at least one shareholder at the meeting has given notice of the intention to cumulate votes prior to the voting. If such notice is given, every shareholder present, in person or by proxy, at the meeting may cumulate votes. The accompanying proxy grants authority to the proxyholders to cumulate votes and allocate them in the proxyholders' discretion to one or more nominees, if the proxyholders believe that such action will maximize the number of nominees who will be elected. The proxyholders do not, at this time, intend to give such notice nor to cumulate the votes they may hold pursuant to the proxies solicited in this Proxy Statement unless the required notice by a shareholder is given at the meeting, in which instance such proxyholders intend to vote cumulatively all the proxies held by them in favor of some or all of the nominees for office set forth in this Proxy Statement. If cumulative voting is utilized at the Annual Meeting, each shareholder voting at the election of directors may cumulate their votes and cast a number of votes equal to the number of directors to be elected multiplied by the number of shares held. All such votes may be cast for a single candidate or may be distributed among any or all of the candidates. The following table sets forth information as to the beneficial ownership of the Common Stock, as of March 26, 1999, by (a) persons known to the Company to be beneficial owners of more than 5% of the Common Stock, (b) executive officers named in the "Summary Compensation Table" below, and (c) executive officers and directors as a group. Unless otherwise noted, the persons listed below have sole voting and investment power.
~~NUMBER OF SHARES PERCENT OF NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED CLASS(1) ------------------------------------ ------------------ -----------~~ W. Howard Lester................................. 5,187,093(2) 9.2% c/o Williams-Sonoma, Inc. 3250 Van Ness Avenue San Francisco, CA 94109 James A. McMahan................................. 5,675,200(3) 10.2% 2237 Colby Avenue Los Angeles, CA 90064 Patrick J. Connolly.............................. 502,272(4) * Gary G. Friedman................................. 831,824(5) 1.5% Dennis A. Chantland.............................. 62,515(6) * Richard Hunter................................... 468(7) * Putnam Investment Management, Inc and Putnam Investments, Inc........................ 5,677,134(8) 10.2% One Post Office Square Boston, MA 02109 AMVESCAP, PLC and group members.................. 3,235,800(9) 5.8% 11 Devonshire Square London EC2M 4YR, England All Executive Officers and Directors as a Group (12 persons)................................... 13,225,977(10) 23.0%
- --------------- * Less than 1%. (1) Assumes exercise of stock options beneficially owned by the named individual or entity into shares of the Company's common stock. Based on 55,808,325 shares outstanding as of March 30, 1999. 2 5 (2) Includes 162,000 and 404,500 shares subject to nonqualified stock options granted under the Company's 1976 Stock Option Plan (the "1976 Plan") and the 1993 Stock Option Plan (the "1993 Plan"), respectively, which are currently exercisable or exercisable within 60 days. Includes 15,303 shares in the Company's Associate Stock Incentive plan (the "Stock Incentive Plan") that are allocable to Mr. Lester and fully vested. Does not include 3,486 and 1,081,546 shares owned by Mr. Lester's wife and by trusts established by Mr. Lester for the benefit of his children, respectively, in which shares Mr. Lester disclaims any beneficial interest. (3) Includes 13,500 and 51,000 shares subject to nonqualified stock options granted under the 1976 Plan and the 1993 Plan, respectively, which are currently exercisable or exercisable within 60 days. (4) Includes 47,250 shares subject to nonqualified stock options granted under the 1993 Plan which are currently exercisable or exercisable within 60 days. Also includes 10,992 shares in the Stock Incentive Plan that are allocable to Mr. Connolly and fully vested. Does not include 5,238 shares owned by a trust established for the benefit of Mr. Connolly's children, in which shares Mr. Connolly disclaims any beneficial interest. (5) Includes 45,000 and 672,000 shares subject to nonqualified stock options granted under the 1976 Plan and the 1993 Plan, respectively, which are currently exercisable or exercisable within 60 days. Also includes 13,574 shares in the Stock Incentive Plan that are allocable to Mr. Friedman and fully vested. (6) Includes 62,000 shares subject to nonqualified stock options granted under the 1993 Plan which are currently exercisable within 60 days. Includes 515 shares in the Stock Incentive Plan that are allocable to Mr. Chantland and fully vested. (7) Includes 468 shares in the Stock Incentive Plan that are allocable to Mr. Hunter and fully vested. (8) The information above and in this footnote is based on share information taken from the Schedule 13G of Putnam Investment Management, Inc. and Putnam Investments, Inc. filed February 11, 1999. Putnam Management, Inc. a registered investment adviser, and Putnam, Inc., its parent company, have shared dispositive power (but no voting power) over 5,677,134 shares of Common Stock. (9) The information above and in this footnote is based on Schedule 13G filed February 5, 1998 on behalf of a group by AMVESCAP PLC, a parent holding company. In addition to AMVESCAP PLC, other group members include AVZ, Inc., AIM Management Group, Inc., AMVESCAP Group Services, Inc., INVESCO, Inc., INVESCO North American Holdings, Inc., INVESCO Capital Management, Inc., INVESCO Funds Group, Inc., INVESCO Management & Research, Inc. and INVESCO Realty Advisers, Inc. Each member of such group has shared voting and dispositive power over 3,235,800 shares of Common Stock. AVZ, Inc., AIM Management Group, Inc., AMVESCAP Group Services, Inc., INVESCO, Inc. and INVESCO North American Holdings, Inc. are all holding companies. INVESCO Capital Management, Inc., INVESCO Funds Group, Inc., INVESCO Management & Research, Inc. and INVESCO Realty Advisers, Inc. are all investment advisers. (10) Includes 247,500 and 1,424,246 shares subject to nonqualified stock options granted under the 1976 Plan and 1993 Plan, respectively, which are currently exercisable or exercisable within 60 days. Also includes 41,977 shares in the Stock Incentive Plan that are allocable to the executive officers and fully vested. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Pursuant to Section 16(a) of the Securities Exchange Act of 1934 and the rules promulgated thereunder, directors and certain officers of the Company and persons who beneficially own more than 10% of a registered class of the Company's equity securities are required to file with the Securities and Exchange Commission and 3 6 furnish to the Company reports of ownership and changes in ownership of all classes of the Company's equity securities. Based solely on its review of the copies of such reports received by it during or with respect to the fiscal year ended January 31, 1999, and/or written representations from such reporting persons, the Company believes that, except as described below, all reports required to be filed by such reporting persons during or with respect to the fiscal year ended January 31, 1999 were filed on a timely basis, except that Form 3 reporting John Bronson's appointment as an executive officer of the Company was inadvertently filed late. PROPOSAL 1 ELECTION OF DIRECTORS At the Annual Meeting, ten directors are to be elected to serve until the next annual meeting of shareholders or until the election and qualification of their successors. The Company's Bylaws provide for not less than six nor more than eleven directors, the exact number of directors following this annual meeting of shareholders having been fixed by theMeeting?

Our Board of Directors at ten. Under California law, the ten nominees receiving the highest number of affirmative votes of the shares entitled to vote shall be elected directors. Abstentions and broker non-votes will have no effect on the outcome of the vote. Unless otherwise instructed, the proxyholders will vote the proxies received by them for the ten nominees named below. If any of the listed nominees is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for such person or persons as the proxyholders may designate. The Board of Directors has no reason to believe that any of the nominees will be ~~unable~~unwilling or ~~decline~~unable to serve as a director. 4 7 However, should it occur, the nominations committee would nominate someone to stand for election and your proxies will be voted for such person or persons designated by the proxy holders.

Directors do not receive any cash compensation for their service on our Board or Board committees. As their exclusive compensation relating to Board and Board committee service, directors are awarded stock options. Specifically, we grant each director an option to purchase 13,500 shares of our common stock upon the director’s initial election to our Board, and an option to purchase an additional 10,500 shares of our common stock each time the director is re-elected to our Board. The exercise price of these options is not less than 100% of the fair market value of our stock on the date of the option grant or not less than 110% for an incentive stock option granted to a shareholder with greater than 10% of the voting power of all of our stock.

Are there any family or other special relationships among the members of our Board?

No, there are no family 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 following table sets forth information, as of March ~~26, 1999,~~31, 2003, with respect to each ~~person nominated for election as a~~ director ~~which has been furnished to the Company by the nominees.~~nominee. All nominees currently serving on our Board were elected directors at the ~~Annual Meeting of Shareholders~~annual shareholders’ meeting held on May ~~27, 1998.~~ 29, 2002. Each director nominee furnished the biographical information set forth below.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF ALL OF THE DIRECTORS LISTED ABOVE.

What are the committees of ~~stock options beneficially owned by~~our Board?

Our Board has the ~~named individual or entity~~following committees, with ~~shares of~~ the ~~Company's common stock. Based on 55,808,325 shares outstanding~~following members as of March ~~30, 1999. (2) Includes 1,125 shares~~31, 2003:

Did all of the committee members attend at least 75% of the meetings in fiscal 2002?

Each committee member attended at least 75% of their respective committee meetings, except that Ms. Reisman attended four of the six Audit Committee meetings and Mr. Robertson attended one of the two Compensation Committee meetings.

All of our Audit Committee members are independent. All of our Compensation Committee members are independent. Other than Mr. Lester, all of our Nominations and Corporate Governance Committee members are independent.

Will the Nominations and Corporate Governance Committee consider nominees recommended by shareholders?

Yes, the Nominations and Corporate Governance Committee will consider nominees recommended by shareholders provided such nominees are submitted pursuant to the procedures and timelines described in the ~~Stock Incentive Plan that are allocable~~“Shareholder Proposals” section of this Proxy Statement.

Are there any disclosures relating to ~~Mr. Williams~~Compensation Committee Interlocks and fully vested. (3) Includes 162,000 and 404,500 shares subject to nonqualified stock options granted under the 1976 Plan and the 1993 Plan, respectively, which are currently exercisable or exercisable within 60 days. Includes 15,303 shares in the Stock Incentive Plan that are allocable to Mr. Lester and fully vested. Does not 5 ~~8 include 3,486 and 1,081,546 shares owned by Mr. Lester's wife and by trusts established by Mr. Lester for the benefit~~insider participation?

During fiscal 2002, none of his children, respectively, in which shares Mr. Lester disclaims any beneficial interest. (4) Includes 14,998 shares subject to nonqualified stock options granted under the 1993 Plan, respectively, which are currently exercisable or exercisable within 60 days. (5) Includes 13,500 and 51,000 shares subject to nonqualified stock options granted under the 1976 Plan and the 1993 Plan, respectively, which are currently exercisable or exercisable within 60 days. (6) Includes 47,250 shares subject to nonqualified stock options granted under the 1993 Plan which are currently exercisable or exercisable within 60 days. Also includes 10,992 shares in the Stock Incentive Plan that are allocable to Mr. Connolly and fully vested. Does not include 5,238 shares owned byour executive officers served as a trust established for the benefit of Mr. Connolly's children, in which shares Mr. Connolly disclaims any beneficial interest. (7) Includes 45,000 and 672,000 shares subject to nonqualified stock options granted under the 1976 Plan and the 1993 Plan, respectively, which are currently exercisable or exercisable within 60 days. Also includes 13,574 shares in the Stock Incentive Plan that are allocable to Mr. Friedman and fully vested. (8) Includes 55,500 shares subject to nonqualified stock options granted under the 1993 Plan which are currently exercisable or exercisable within 60 days. COMPENSATION OF DIRECTORS The Company's directors do not receive any cash compensation for services provided as membersmember of the ~~Board.~~Board of Directors ~~(other than employee directors) are awarded nonqualified stock options annually under~~or Compensation Committee of any entity that has one or more executive officers serving as a member of our Board of Directors or Compensation Committee.

A proposal to amend the ~~1993 Plan. Eligible directors are each awarded an option to purchase 13,500 shares~~second paragraph of ~~Common Stock upon their initial election to the Board and an option to purchase 10,500 shares~~Article V of Common Stock each time they are re-elected to the Board. The exercise price of these options is fixed at the fair market value of the Common Stock on the date of the relevant annual meeting. INDEMNIFICATION Under the Company'sour Restated Articles of Incorporation, as amended. This paragraph, or indemnification provision, provides certain authority to us to indemnify our directors, officers, employees and other agents under California law. The indemnification provision currently reads as follows:

“The Company is authorized to provide indemnification of agents (as defined in Section 317 of the Corporations Code) for breach of duty to the Company and its shareholders through bylaw provisions or through agreements with agents, or both, in excess of the indemnification otherwise permitted by Section 317 of the Corporations Code, subject to the limits on such excess indemnification set forth in Section 204 of the Corporations Code.”

If approved, the indemnification provision would be amended and restated in its entirety to read as follows:


	“The Company is authorized to indemnify the directors, officers, employees and other agents (as defined in Section 317 of the Corporations Code) of the Company to the fullest extent permissible under California law.”

To indemnify a person means to hold them harmless from liability. When we agree to indemnify our directors, officers, employees and other agents, we agree to hold them harmless from liability in any civil, criminal, administrative, investigative or similar proceeding relating to their service on behalf of us. As a general matter, this means paying the reasonable legal fees of these people and certain settlements, judgments and fines that they may become subject to in connection with such a proceeding. Such indemnification is ~~not liable~~subject, however, to limitations under California law and other applicable law.

How is the ~~Company or its shareholders for monetary damages for~~proposed new indemnification provision different than our current indemnification provision?

The current indemnification provision may be deemed to limit our authority to indemnify our directors, officers, employees and other agents to situations involving an alleged breach of ~~fiduciary duty as~~duty. However, under California law, a ~~director. However, the Articles of Incorporation~~company may indemnify such people against claims that do not ~~eliminate a director's liability for~~involve an alleged breach of duty. The proposed new indemnification provision is intended to clarify and ensure that we have the ~~duty of loyalty, acts or omissions not in good faith, certain payments not permitted~~fullest authority to indemnify such people under ~~the~~ California ~~Corporations Code or transactions in which the director derives an improper personal benefit. The Articles of Incorporation also provide that the Company has~~law, including the authority to indemnify them against claims not involving an alleged breach of duty.

Do the indemnification provisions require us to indemnify its directors, officers, employees ~~and agents beyond~~or other agents?

No. Neither the ~~circumstances permitted under Section 317 of~~current indemnification provision nor the ~~California Corporations Code. BOARD MEETINGS AND COMMITTEES During the fiscal year ended January 31, 1999 ("fiscal 1998"),~~proposed new indemnification provision requires us to indemnify any person. A determination as to whether to provide indemnification must be made by the Board of Directors, the shareholders, or as otherwise permitted or mandated by California law. The purpose of the ~~Company held~~new indemnification provision is to ensure that we have the fullest authority, and thus the maximum flexibility, to provide such indemnification under California law.

Our Bylaws require us to indemnify and hold harmless any director or officer, or anyone serving at a ~~total~~director or officer’s bequest in any capacity with another entity, to the fullest extent authorized under California law. We also carry directors and officers liability insurance that provides coverage for our directors, officers and other persons. We do not currently have any indemnification agreements in effect with any of ~~seven meetings~~our directors, officers or employees.

Our objective is to ensure that we have the authority to provide the maximum possible indemnification to our directors, officers, employees and ~~acted~~other agents permitted under California law by ~~unanimous written consent on six occasions. The Board~~clarifying and ensuring that our Articles of ~~Directors has four standing Committees: Audit, Compensation, Investment~~Incorporation provide such authority. We believe that amending the indemnification provision will provide greater certainty as to our indemnification authority, allow more flexibility in structuring indemnification arrangements and ~~Nominating~~ultimately help us attract and ~~Corporate Governance. During fiscal 1998,~~retain the ~~Audit Committee~~highest quality directors, officers, employees and agents.

To approve this proposal, a majority of the ~~Board~~outstanding shares of ~~Directors (the "Audit Committee") held two meetings. The Audit Committee~~our common stock must vote FOR this proposal. Abstentions and broker non-votes will be counted to determine if there is ~~currently comprised~~a quorum but will not be counted as a vote for or against this proposal. As a result, abstentions and broker non-votes will have the same effect as a vote against this proposal.

If approved, the amendment will become effective upon our filing an amendment to our Articles of ~~Messrs. Bessin (Chairman), McMahan and Berry. The Audit Committee is primarily responsible for reviewing~~Incorporation, or a restated version of our Articles of Incorporation that reflects this amendment, with the ~~services performed by~~California Secretary of State soon after the ~~Company's independent accountants and evaluating the Company's accounting principles and its system of internal accounting controls. 6~~ 9 During the last fiscal year, the Compensation Committee of the Board of Directors (the "Compensation Committee") held six meetings and acted by unanimous written consent on one occasion. The Compensation Committee is currently comprised of Messrs. McMahan (Chairman), Bellamy, Martin and Ms. Emerson. The Compensation Committee is primarily responsible for officers' compensation matters and for administering the Company's stock option plans. The Investment Committee is currently comprised of Messrs. Berry (Chairman), McMahan and Bessin. The Investment Committee was established during fiscal 1998 and has not held a meeting . The Investment Committee is primarily responsible for setting policy regarding investments of the Company's excess cash. The Nominating and Corporate Governance Committee is comprised of Mr. Bellamy (Chairman), Mr. Lester and Ronald M. Loeb, former outside counsel to the Company. The Nominating and Corporate Governance Committee was established during fiscal 1998 and has not held a meeting. The Nominating and Corporate Governance Committee is primarily responsible for determining the qualifications of and selected director nominees and for setting policies regarding the corporate governance responsibilities of the Board and management. No director attended fewer than 75% of all meetings of the Board of Directors and the committees upon which such director served during the fiscal year ended January 31, 1999, except directors Adrian Bellamy and John Martin. Annual Meeting.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” APPROVAL OF THIS AMENDMENT TO OUR RESTATED ARTICLES OF INCORPORATION, AS AMENDED.

A proposal to ratify the appointment of Deloitte & Touche LLP (“Deloitte”) as our independent auditors for fiscal 2003. The Audit Committee selected Deloitte as our independent auditors for fiscal 2003, subject to ratification by our shareholders.

Deloitte audited our financial statements for the last twenty-three years. Based in part upon information provided by Deloitte, the Audit Committee determined that Deloitte is independent under applicable independence standards. Deloitte’s representative will be present at the Annual Meeting and will have the opportunity to make a statement if he or she desires to do so. He or she also will be available to respond to appropriate questions.

Deloitte’s audit services for fiscal 2002 included examination of our consolidated financial statements, review of our consolidated quarterly reports, and audit services related to periodic filings made with the Securities and Exchange Commission. Deloitte also discussed certain matters with our Audit Committee as more fully described in the Audit Committee report below.

To approve this proposal, a majority of the shares of common stock voting at the Annual Meeting, either in person or by mail, must vote FOR this proposal. Abstentions and broker non-votes can have the effect of preventing approval of this proposal. Abstentions and broker non-votes will be counted to determine if there is a quorum but will not be counted as a vote for or against this proposal. Therefore, the number of affirmative votes cast for this proposal could be a majority of the votes actually cast but not a majority of the required quorum and the proposal would not be approved.

If shareholders vote against this proposal, we will consider interviewing other independent auditors. There can be no assurance, however, that we will choose to appoint other independent auditors even if this proposal is not passed.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE ~~"FOR" EACH~~“FOR” RATIFICATION OF THE ABOVE-NAMED NOMINEES. CERTAIN TRANSACTIONS The Company leases two distribution centers in Memphis, Tennessee from two partnerships whose partners include an executive officer/director and a director of the Company. See "Executive Compensation -- Compensation Committee Interlocks and Insider Participation." APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY’S INDEPENDENT AUDITORS FOR FISCAL 2003.

This table provides certain information about our executive officers. The executive officers ~~of the Company~~ are elected by ~~the~~our Board ~~of Directors~~ and serve at the pleasure of ~~the Board. Certain information concerning such executive officers is set forth below:~~ our Board, subject to rights, if any, under employment contracts.

This table sets forth the annual and long-term compensation ~~of the Company's~~earned by (i) our Chief Executive Officer and ~~its~~former Chief Executive Officer who served in that position until January 9, 2003; and (ii) the four other most highly compensated executive officers ~~who served as executive~~during fiscal 2002; (collectively, the “Named Executive Officers”). None of these officers held stock appreciation rights during the ~~fiscal year ended January 31, 1999 and whose total annual salaries and bonuses exceeded $100,000 during such fiscal year.~~ years represented in the tables.

LONG TERM COMPENSATION ANNUAL AWARDS COMPENSATION(2) --------------------- ------------------------ SECURITIES UNDERLYING ALL OTHER NAME AND PRINCIPAL POSITION YEAR(1) SALARY($) BONUS($)(9) OPTIONS(#)

	(1)	Rows specified “2002”, “2001” and “2000” represent fiscal years ended February 2, 2003, February 3, 2002 and January 28, 2001, respectively.

	(2)	While the Named Executive Officers enjoy certain perquisites, except as otherwise indicated below, the aggregate value of such perquisites for the fiscal years shown did not exceed or equal the lesser of $50,000 or 10% of each such officer’s salary and bonus for the applicable fiscal year.

	(3) ~~COMPENSATION($) --------------------------- ------- --------- ------------ --------------------- ---------------~~ ~~W. Howard Lester............................ 1998 681,362 0 100,000 5,789(4)~~	Figures have been adjusted to reflect stock splits.

	(4)	Comprised of $65,945 for use of our airplane for personal business.

	(5)	Comprised of (i) premiums in the amount of $954 paid by us for term life insurance in excess of $50,000 and (ii) our matching contribution of $10,769 under our Associate Stock Incentive Plan, which amounts are subject to vesting.

	(6)	Comprised of (i) an option to purchase 1,000,000 shares of our common stock granted upon Mr. Mueller’s appointment as our Chief Executive Officer ~~1997 628,978 150,000 240,000 7,445 Chairman~~ and Director 1996 498,077 100,000 60,000 7,638 Dennis A. Chantland......................... 1998 419,725 0 230,000 2,696(5) Executive Vice President, 1997 386,892 200,000 230,000 4,038 Chief Administrative Officer(ii) an option to purchase 21,000 shares of our common stock as Mr. Mueller’s compensation as an external director during fiscal 2002.

	(7)	Comprised of premiums in the amount of $80 paid by us for term life insurance in excess of $50,000.

	(8)	Comprised of (i) premiums in the amount of $954 paid by us for term life insurance in excess of $50,000; (ii) our matching contribution of $9,846 under our Associate Stock Incentive Plan, which amounts are subject to vesting; and Secretary 1996 342,244 75,000 50,000 4,930 Patrick J. Connolly......................... 1998 315,696 75,000 100,000 3,274(6) Executive Vice President 1997 286,772 200,000 30,000 2,498(iii) a $6,000 car allowance paid by us.

	(9)	Comprised of (i) premiums in the amount of $954 paid by us for term life insurance in excess of $50,000; (ii) our matching contribution of $5,908 under our Associate Stock Incentive Plan, which amounts are subject to vesting; and ~~General Manager -- Catalog~~(iii) a $6,000 car allowance paid by us.


(10)	Comprised of (i) premiums in the amount of $954 paid by us for term life insurance in excess of $50,000; (ii) our matching contribution of $9,538 under our Associate Stock Incentive Plan, which amounts are subject to vesting; and Director 1996 229,080 75,000 30,000 7,478 Gary G. Friedman............................ 1998 465,539 0 230,000 3,214(7) Chief Merchandising Officer, 1997 455,253 100,000 180,000 1,109 President -- Retail Division(iii) a $6,000 car allowance paid by us.

(11)	Comprised of (i) premiums in the amount of $954 paid by us for term life insurance in excess of $50,000; and Director 1996 399,580 75,000 40,000 1,226 Richard C. Hunter........................... 1998 236,847 0 20,000 815(8) Senior Vice President, 1997 303,037 70,000 22,000 1,527 International Operations and Development 1996 41,237 0 100,000 167 (ii) a $6,000 car allowance paid by us.

- --------------- (1) Rows specified "1998," "1997" and "1996" represent fiscal years ended January 31, 1999, February 1, 1998 and February 2, 1997 respectively. (2) While the named executive officers enjoy certain perquisites, the aggregate value of such perquisites for the fiscal years shown did not exceed the lesser of $50,000 or 10% of such officer's salary and bonus for the applicable year. (3) Figures have been adjusted to reflect the 2-for-1 stock split

Option Grants in May 1998 (the "Stock Split"). (4) Comprised of premiums paid by the Company for term life insurance and benefits received under the Company's executive supplemental medical plan of $4,914 and $875, respectively. (5) Comprised of premiums paid by the Company for term life insurance and benefits received under the Company's executive supplemental medical plan of $1,338 and $1,358, respectively. (6) Comprised of premiums paid by the Company for term life insurance and benefits received under the Company's executive supplemental medical plan of $2,016 and $1,258, respectively. (7) Comprised of premiums paid by the Company for term life insurance and benefits received under the Company's executive supplemental medical plan of $714 and $2,500, respectively. (8) Comprised of premiums paid by the Company for term life insurance and benefits received under the Company's executive supplemental medical plan of $805 and $10, respectively. (9) Amounts represent bonuses earned during each fiscal year. 8 ~~11 OPTION GRANTS IN LAST FISCAL YEAR The following~~Fiscal 2002

This table sets forth ~~the~~certain information ~~noted for~~regarding all ~~grants of~~ stock ~~options~~option grants made to the ~~Chief~~Named Executive ~~Officer and each of the other executive officers named~~Officers during fiscal 2002.


(1)	The 5% and 10% assumed rates of appreciation are required by the Securities and Exchange Commission and do not represent our estimate or projection of the future of our stock price.

Aggregate Option Exercises in the ~~Summary Compensation Table during the fiscal year ended January 31, 1999:~~
INDIVIDUAL GRANTS --------------------------------------------------------- POTENTIAL REALIZABLE VALUE NUMBER OF PERCENTAGE OF AT ASSUMED ANNUAL RATES SECURITIES TOTAL OPTIONS OF STOCK PRICE APPRECIATION UNDERLYING GRANTED TO EXERCISE OR FOR OPTION TERM OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION ---------------------------- NAME GRANTED(#)(1) FISCAL YEAR(%) ($/SH)(1) DATE 5%($) 10%($) ---- ------------- -------------- ----------- ---------- ------------ ------------ W. Howard Lester............. 100,000 7.5 27.56 3/10/08 1,733,234 4,392,354 Dennis A. Chantland.......... 80,000 6.0 27.56 3/10/08 1,386,587 3,513,883 150,000 11.2 21.56 9/7/08 2,034,081 5,154,761 Patrick J. Connolly.......... 50,000 3.8 27.56 3/10/08 866,617 2,196,177 50,000 3.8 21.56 9/7/08 678,027 1,718,254 Gary G. Friedman............. 80,000 6.0 27.56 3/10/08 1,386,587 3,513,883 150,000 11.2 21.56 9/7/08 2,034,081 5,154,761 Richard C. Hunter............ 20,000 1.5 27.56 3/10/08 346,647 878,471
~~- --------------- (1) All of these options, except for certain options granted to Messrs. Chantland~~Last Fiscal Year and Friedman were repriced to $19.31 in October 1998 as noted in the Report on Repricing of Options/SAR's. Figures have been adjusted to reflect stock splits. AGGREGATE OPTION EXERCISES IN THE LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUE The followingFiscal Year-End Option Value

This table sets forth information with respect to the Named Executive Officers’ exercise of stock options during ~~the~~ fiscal ~~year ended January 31, 1999~~2002 and the fiscal year-end value of unexercised options held at the end of fiscal 2002.


(1)	Figures have been adjusted to reflect stock splits.

(2)	Represents the difference between the closing market price of our common stock on January 31, 2003 ($23.67 per share) and the exercise price of the options.

What are the terms of the employment, termination of employment and change-in-control agreements with our Named Executive Officers?

We entered into an employment agreement with Ms. Laura J. Alber, effective as of March 19, 2001, relating to her employment as the Executive Vice President of Pottery Barn. The initial term of the agreement expires March 19, 2004, with automatic extension for additional one-year terms, until the agreement is terminated by Ms. Alber or by us. We committed in the agreement to pay Ms. Alber an annual base salary of not less than $400,000. If we terminate Ms. Alber’s employment without “cause” (as defined in the agreement), or if she terminates her employment with us for “good reason” (as defined in the agreement) she would be entitled to receive continuation of her base salary and health insurance coverage for up to three years, so long as she does not breach certain post-termination obligations as described in the agreement. Ms. Alber was elected President, Pottery Barn Brands effective February 11, 2002.

We entered into an agreement with Mr. James E. Boike, our Executive Vice President, Chief Operating Officer, effective as of May 8, 2001, pursuant to which we agreed to pay to Mr. Boike a “guaranteed spread” on certain unvested stock options owned by Mr. Boike. The guaranteed spreads are subject to a cap, and the

We entered into a separation agreement with Mr. Dale W. Hilpert, our former Chief Executive Officer, pursuant to which Mr. Hilpert left our company as of January 9, 2003. Pursuant to the agreement, we accelerated the vesting of Mr. Hilpert’s unvested stock options and released our repurchase right on Mr. Hilpert’s restricted shares of our common stock. We also agreed to pay Mr. Hilpert a bonus based on our performance in 2002. Our Compensation Committee, using a pre-determined formula linked to our performance in 2002, set Mr. Hilpert’s bonus at $XXX.

The following reports by our Compensation Committee and our Audit Committee covering fiscal 2002 shall not be deemed to be (i) “soliciting material”; (ii) to be “filed” with the Securities and Exchange Commission; (iii) subject to Regulations 14A or 14C of the Securities Exchange Act; or (iv) subject to the liabilities of Section 18 of the Securities Exchange Act. The reports shall not be deemed incorporated by reference into any other company filing under the Securities Exchange Act or the Securities Act.

We are responsible for setting the company’s policy on executive compensation. We determine the compensation paid to the company’s executive officers, including the Chief Executive Officer, and ~~each of the other executive officers named in the Summary Compensation Table:~~

~~- --------------- (1) Figures have been adjusted~~provide assistance and recommendations with respect to reflect Stock Splits (2) Represents the difference between the closing market price of the Company's common stock on January 29, 1999 ($34.69 per share) and the exercise price of the options. 9 ~~12 REPORT ON REPRICING OF OPTIONS Options held by Named Officers were repriced in the fiscal year ended January 31, 1999 as set forth below(1).~~

- --------------- (1) The Board of Directors and Compensation Committee view options as essential to the effort to attract and retain key employees. In order to ensure that the options fulfilled their purpose, in October 1998, the Board and Committee determined to lower the exercise price for all outstanding options granted on or after June 27, 1997 to $19.31 EXECUTIVE EMPLOYMENT AGREEMENTS The Company does not have employment agreements with any of its executive officers. BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION The Compensation Committee is responsible for setting executive compensation ~~policy and determining the compensation paid to executive officers of the Company. The Compensation Committee is currently~~plans. We are comprised of the directors named below ~~all~~and none of ~~whom are~~us has ever served as an officer of the company. Each member of our Compensation Committee is independent under the rules of The New York Stock Exchange as currently in effect and is a non-employee ~~Directors. The Company's~~director under Section 16(b) of the Securities Exchange Act of 1934.

We believe that executive officers and other key employees should have a significant stake in the company’s stock performance and that compensation programs should link executive compensation to shareholder value. For this reason, our executive officer compensation programs are designed to enable the ~~Company~~company to attract, retain, motivate and reward highly qualified ~~executives~~executive officers while maintaining strong and direct links between executive pay, individual performance, the ~~Company's~~company’s financial performance and shareholder returns. ~~The Compensation Committee believes~~

Do we compare the company’s compensation practices to those of other companies?

Yes. We believe that ~~officers and other key employees should have a significant stake in~~ the ~~Company's stock price performance under programs which link executive~~ compensation to shareholder return. Notably, the Chief Executive Officer, Mr. Lester, beneficially owns 5,187,093 shares (including options which are currently exercisable or exercisable within 60 days) representing 9.2%practices of the shares of Common Stock as of March 26, 1999. Mr. Lester (together with the undersigned Mr. McMahan) purchased the Company from its founder Charles E. Williams in 1979. The Company first offered stock to the public in 1983. The Company competes with a number ofmany different companies ~~both~~ within ~~and outside~~ the retail industry are relevant to establishing the company’s compensation programs and executive compensation for ~~talented executives. Accordingly,~~each year. Specifically, we strive to ensure that the ~~Committee considers both~~company’s compensation programs and executive compensation are competitive, taking into account: (i) pay practices atof 8 retailers of comparable size ~~who~~which are part of the Center for Research in Security Prices ~~("CRSP")~~ Index for NASDAQ Retail Trade Stocks, one of the indices used in the ~~Performance Graph, as well as~~performance graph below; and (ii) pay practices at other companies considered comparable in each year, based on ~~the~~ industry, revenues and other ~~factors (together,~~factors. We refer to these companies collectively as “comparable companies.” For fiscal 2002, we used 27 specialty retail companies as the ~~"Compara- 10~~ ~~13 ble Companies") when assessing~~comparable companies. In addition, the ~~competitiveness of the Company's compensation programs. The Committee~~company utilizes an independent executive compensation ~~advisor~~consultant hired by management for the purpose of meeting with us to provide information on ~~competitive~~the competitiveness of the company’s compensation ~~levels. The Committee considers~~programs.

We consider three major elements in ~~its~~our compensation program: (i) base ~~salaries,~~salary, (ii) annual ~~cash~~ incentive opportunities and (iii) long-term ~~incentives via stock options. Base~~incentives.

We expect and confirm that the ~~median levels~~company’s executive officers’ base salaries fall within the third quartile (i.e., the top 50th to 75th percentile) of ~~the Comparable Companies,~~comparable companies, adjusting, as appropriate, to reflect differences in each particular executive officer’s responsibilities, experience and ~~actual salaries are adjusted for~~ individual ~~performance and~~ contributions to the ~~Company's~~company’s success. ~~In May 1997,~~We review and set the ~~Committee~~company’s executive officers’ base salaries, including those of the Named Executive Officers, on an annual basis. This review occurred in February 2002 to confirm appropriate base salaries for fiscal 2002. For all new executives who joined the company after the February 2002 review, we reviewed ~~the~~and approved base salaries ~~of its~~in connection with their hire date.

The company promotes outstanding performance by rewarding executive officers ~~including~~for achieving specific performance objectives with an annual cash bonus. The company pays bonuses only when the ~~named~~company exceeds a minimum corporate earnings objective as established by us in the first quarter of each fiscal year. Bonuses to executive ~~officers.~~ officers are based on a pre-determined formula linked to the company’s performance. The executive officers’ base salaries and the bonus target together place annual cash compensation within the third quartile of comparable companies.

Key performance criteria for evaluating executive officers include business and financial objectives, people and organizational goals, and other relevant factors as determined by us with input from the company’s senior management. These criteria change from year to year. In the first quarter of each fiscal year, we review a performance report that summarizes management’s view regarding whether, and to what extent, the key performance criteria were attained. The performance report also discusses any other significant but unforeseen factors that may have positively or negatively affected the company’s performance.

We verify the company’s actual earnings for each performance period, review management’s recommendation for the resulting aggregate bonus awards and approve the aggregate amount. We also review and approve the individual recommendations for our executive officers, and the company’s Chief Executive Officer approves the recommendations for all other eligible employees below the executive officer level.

Based on the ~~Company's~~company’s performance in fiscal ~~year 1997, base salary increases~~2002 and certain brand specific metrics, incentive bonuses were ~~granted~~paid to the ~~following executives effective April 13, 1998.~~

Named Executive Officers, as follows:

The ~~second~~third component of the ~~Company's~~company’s executive compensation program isconsists of annual stock option grants. We continue to believe that stock option grants are important for motivating executive officers (and other employees) to increase shareholder value over the ~~Profit Incentive Plan, which rewards participants for extraordinary results based on~~long term. Although we did not grant any stock options to any named executive officers (other than to Mr. Mueller upon his appointment as the ~~annual financial performance of the Company. Based on the Company's performance~~company’s Chief Executive Officer) in fiscal ~~year 1997, the following bonus awards were~~2002, we concluded that stock options may be granted to ~~the~~ executive ~~officers. These bonuses include a special one-time bonus of $100,000 each~~officers in fiscal 2003. We believe that stock option grants to ~~Messrs. Friedman, Chantland and Connolly in recognition of their extraordinary efforts during fiscal year 1997.~~

Stock ownership and the link to shareholder value is an integral part of the Company's executive compensation program. Accordingly, the number of stock options granted to the Chief Executive Officer and other executive officers reflect competitive practices ~~for Comparable Companies~~at comparable companies and the company’s assessment of ~~their~~ individual contributions. In 1998, Mr. Lester was granted options to purchase 100,000 shares, Mr. Chantland was granted options to purchase 230,000 shares, Mr. Friedman was granted options to purchase 230,000 shares, Mr. Connolly was granted options to purchase 100,000 shares and

Under the ~~other executive officer was granted an~~company’s existing stock option ~~for 20,000 shares in recognition~~plans, the exercise price of ~~their contributions during 1997 and to further link a significant portion of their compensation to shareholder returns. All~~all stock options ~~were granted with an exercise price equal to~~is not less than 100% of the fair market value of ~~one share of Common Stock~~the stock on the date of the ~~grant. The Committee believes~~option grant or not less than 110% for an incentive stock option granted to a shareholder with greater than 10% of the voting power of all company stock. Options granted pursuant to the company’s stock option plans generally vest in five equal annual installments. It is the company’s policy not to reprice stock options in the event that the ~~key officers~~fair market value of the ~~Company have provided excellent services and been diligent in their commitment to the Company. Although the Company's~~common stock price did not necessarily reflect the quality of their efforts, the Committee believes that stock ownership by such officers provides an important incentive for their continued efforts and diligence. In order to ensure that options fulfilled their purpose of helping the Company attract and retain key employees, in October 1998 the Board of Directors and the Committee determined to lowerfalls below the exercise price ~~for all~~ of the ~~Company's outstanding~~ stock options ~~granted between June 27, 1997~~ and ~~October 7, 1998 (except~~to not engage in a stock option exchange program.

Edward A. Mueller was hired as Chief Executive Officer effective January 13, 2003. We determined Mr. Mueller’s compensation package based, in part, on a review of the compensation paid to chief executive officers of comparable companies, the compensation packages we have historically paid to our chief executive officer and our general compensation philosophy as described above. Mr. Mueller’s package for 2002 includes salary of $975,000, a potential bonus, and the grant of a stock option to purchase 1,000,000 shares of our common stock under the Williams-Sonoma, Inc. 2001 Stock Option Plan. The bonus portion of Mr. Mueller’s compensation is based on a formula linked to the company’s earnings performance and Mr. Mueller’s individual performance.

Dale W. Hilpert served as Chief Executive Officer from April 2, 2001, through January 9, 2003. Mr. Hilpert earned an annual salary of $950,000 in fiscal 2002. Mr. Hilpert’s salary was based, in part, on a review of the compensation paid to chief executive officers of comparable companies, the compensation packages we have historically paid to our chief executive officer and our general compensation philosophy as described above. In accordance with the terms of Mr. Hilpert’s separation agreement with the company, the company (i) accelerated the vesting of 800,000 unvested stock options held by ~~Messrs. Chantland 11~~ 14Mr. Hilpert; (ii) released its repurchase right on 500,000 restricted shares of company common stock held by Mr. Hilpert; and ~~Friedman) with an exercise price greater than $19.31~~(iii) agreed to ~~$19.31,~~pay Mr. Hilpert his full bonus for the ~~Company's closing price~~year. Using a pre-determined formula linked to the company’s performance in fiscal 2002, we set Mr. Hilpert’s potential fiscal 2002 bonus at $XXX.

How does the ~~time the action was taken. The Omnibus Budget and Reconciliation Act of 1993 amended Section 162(m) of the~~Compensation Committee address Internal Revenue Code ~~and~~Section 162(m)?

Internal Revenue Code Section 162(m) could, depending on future compensation levels, ~~result in limits on~~limit the ~~Company's~~company’s ability to deduct compensation in excess of $1,000,000 paid to certain executive officers. Exceptions to this deductibility limit may be made for various forms of ~~performance-based~~“performance-based” compensation. Based on ~~1998~~2002 compensation levels, no such limits on the deductibility of compensation ~~applied~~were applicable for any ~~officer of the Company. The Company has~~officer. We have not adopted a policy specifically prohibiting compensation at a level that would limit deductions. While ~~the Compensation Committee~~we cannot predict how the deductibility limit may impact ~~the Company's~~our compensation program in future years, ~~the Compensation Committee intends~~we intend to maintain an approach to executive compensation ~~which~~that strongly links pay to performance. ~~The~~Based on this approach ~~should preserve~~and with the intent of preserving the deductibility of ~~the Company's~~ executive compensation, ~~while maintaining highly motivational compensation programs which support~~in 2001, we recommended, and the ~~Company business objectives~~Board and ~~strategies~~shareholders approved, the Williams-Sonoma, Inc. 2001 Stock Option Plan and ~~reinforce~~ the ~~creation~~Williams-Sonoma, Inc. 2001 Incentive Bonus Plan.

The Compensation Committee, comprised of ~~shareholder value. Respectfully submitted, James A. McMahan~~ Adrian D.P. Bellamy, ~~Janet Emerson John E. Martin Members~~Chairman of the ~~Compensation~~ Committee, 12 15 and Richard T. Robertson, prepared this report.

PERFORMANCE GRAPH ~~COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS OF THE COMPANY,~~

This graph compares the cumulative total shareholder return for our common stock with those for the CRSP Index for the New York Stock Exchange and the CRSP Index for the NASDAQ Retail Trade Stocks, our peer index group. Our peer group includes over 150 companies. The cumulative total return listed below assumed an initial investment of $100 and reinvestment of dividends. The graph shows historical stock price performance (including reinvestment of dividends) and is not necessarily indicative of future performance.

WILLIAMS-SONOMA, INC. NYSE STOCK MARKET NASDAQ RETAIL TRADE --------------------- ----------------- ------------------- '1/30/94' 100.00 100.00 100.00 '1/29/95' 137.40 99.90 89.70 '1/28/96' 89.40 133.50 98.70 '2/2/97' 182.50 168.30 123.60 '2/1/98' 245.60 213.10 144.20 '1/31/99' 400.20 258.20 176.20

	A.	The lines represent monthly index levels derived from compounded daily returns that include all dividends.

~~NOTES: A. The lines represent monthly index levels derived from compounded daily returns that include all dividends.~~


	B.	The indexes are reweighted daily, using the market capitalization on the previous trading day.

	C.	If the monthly interval, based on the fiscal year-end, is not a trading day, the preceding trading day is used.


*	Center for Research in Security Prices, The University of Chicago, Graduate School of Business.

During the ~~monthly interval, based~~entire fiscal 2002, Heather M. Reisman and Michael R. Lynch served on the Audit Committee. Edward A. Mueller served as Chairman of the Audit Committee from February 4, 2002 until his election as our Chief Executive Officer beginning January 13, 2003. Each member of the Audit Committee is (or was during his membership) independent under the rules of The New York Stock Exchange as currently in effect. Mr. Lynch was appointed Chairman of the Audit Committee, until the appointment of a successor chairman, as of February 10, 2003. Adrian D.P. Bellamy was appointed to the Audit Committee as of February 11, 2003.

Our role is detailed in the Audit Committee Charter, which was amended and restated by our Board of Directors on April 2, 2003, and is attached to this Proxy Statement as Exhibit A. Specifically, we:


	•	Serve as an independent and objective party to monitor the company’s financial reporting process and internal control system;

	•	Review and appraise the company’s independent auditors and internal audit department; and

	•	Provide an open avenue of communication among the independent auditors, financial and senior management, the internal audit department, and the Board.


	•	Monitor the integrity of the company’s financial reports and other company financial information;

	•	Appoint and/or replace the independent auditors, pre-approve all audit and non-audit services of the independent auditors and assess their qualifications and independence;

	•	Review the performance of the company’s internal audit function, the company’s auditing, accounting and financial reporting procedures and independent auditors;

	•	Monitor the company’s compliance with legal and regulatory requirements; and

	•	Retain independent legal, accounting or other advisors, when necessary and appropriate.


	•	Reviewed and discussed the company’s audited financial statements with management;

	•	Reviewed and discussed the company’s periodic filings on Forms 10-K and 10-Q with management;

	•	Reviewed and discussed all company earnings press releases, sales releases and guidance releases with management;

	•	Met with Deloitte & Touche LLP, our independent auditors, with and without management present, to discuss the overall quality of the internal and external audit process and the financial reporting process; and

	•	Confirmed Deloitte’s independence from the company and management based on the following: (i) no member of Deloitte’s audit team is or has been employed by the company in a financial reporting oversight role, and (ii) our review of audit and non-audit fees and the written disclosures and letter from Deloitte as required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committee), as modified and supplemented.

During fiscal 2002, we discussed the following, among other things, with Deloitte:


	•	Deloitte’s responsibilities and matters relating to their independence;

	•	Any significant issues arising during the audit and any other matters relating to the conduct of the audit of the company’s financial statements; and

	•	Matters required to be discussed pursuant to Statement on Auditing Standards No. 61 (Communications with Audit Committees), including the quality of the company’s accounting principles, the soundness of significant judgments and the clarity of disclosures in the company’s financial statements.

What is our policy regarding pre-approval of audit and non-audit services performed by Deloitte?

All services, whether audit or non-audit services, performed by Deloitte must be pre-approved by us or a designated member of our committee, whose decisions must be reported to us at our next meeting. Pre-approval must be obtained before Deloitte performs the services but cannot be obtained more than a year before performance begins. Approval can be for general classes of permitted services such as “annual audit services” or “tax consulting services.” A written engagement letter, including a description of the permitted services, the dates of the engagement and the fees for such services, must be approved in accordance with these procedures before performance begins.

Yes, we reviewed and discussed the fees paid to Deloitte during fiscal 2002 for audit and non-audit related services, which are described in detail below. We determined that the provision of non-audit services are compatible with Deloitte’s independence.

Yes and we recommended to the Board that the company’s audited financial statements be included in the company’s Annual Report on Form 10-K for fiscal 2002 for filing with the Securities and Exchange Commission.

This report was prepared by members of the Audit Committee, during fiscal 2002, Michael R. Lynch, Heather M. Reisman and Edward A. Mueller (who served until he resigned from the Audit Committee upon his appointment as the company’s Chief Executive Officer beginning January 13, 2003).

During fiscal 2002, Deloitte did not perform any prohibited non-audit services for the company, including financial and systems design and implementation.

Deloitte billed approximately (i) $448,000 during fiscal 2002 and (ii) $329,000 during fiscal 2001, for professional services to audit our consolidated financial statements included in our Annual Report on Form 10-K and to review the company’s condensed, consolidated financial statements included in our Quarterly Reports on Forms 10-Q.

Deloitte billed approximately (i) $212,000 during fiscal 2002 and (ii) $71,500 during fiscal 2001, for audit related services.

Deloitte billed approximately (i) $19,000 during fiscal 2002 and $73,600 during fiscal 2001, for tax compliance services; (ii) $0 during fiscal 2002 and fiscal 2001, for tax preparation services; (iii) $100,000 during fiscal 2002 and $438,000 during fiscal 2001, for tax consulting services; and (iv) $28,000 during fiscal 2002 and $0 during fiscal 2001, for tax software license fees.

Deloitte billed approximately (i) $0 during fiscal 2002 and (ii) $201,400 during fiscal 2001, for non-audit services. In addition, Deloitte Consulting, a ~~trading day,~~subsidiary of Deloitte and Touche LLP, billed approximately $341,000 for fiscal 2001.

During fiscal 2002, we employed Kirk Lester as a financial analyst. Mr. Kirk Lester is the ~~preceding trading day is used. D. The index level~~son of our Chairman Mr. W. Howard Lester. Mr. Kirk Lester earned $XX, and received standard employee benefits, for ~~all series was set to $100.00 on 1/28/94. * Center~~his services during the year.

Our operating leases include an operating lease entered into in July 1983 for ~~Research in Security Prices, The University of Chicago, Graduate School of Business. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The Company's warehouse and~~a distribution ~~center is located~~facility in Memphis, Tennessee. The ~~warehouse and distribution center consists of three separate facilities -- one for mail order operations, one for retail store 13~~ 16 operations and a third facility which processes non-conveyable merchandise-the first two of which are leased from two partnerships whose partners include directors, an executive officer, and significant shareholders of the Company. The third facility is leased from a third party. Mail Order Facility In July 1984, the Company entered into an agreement to lease a 243,000 square foot distribution center from a partnership. The lessor is a general partnership (“Partnership 1”) comprised of W. Howard Lester, Chairman ~~Chief Executive Officer~~of the Board and a significant shareholder of ~~the Company,~~ours, and James A. McMahan, a director and significant shareholder of ~~the Company~~ours. Partnership 1 does not have operations separate from leasing of this distribution facility to us and ~~member of the Compensation and Audit Committees. The partnership~~does not have lease agreements with any unrelated third parties.

Partnership 1 financed the construction of this distribution facility through the sale of ~~$6,300,000~~a total of $9,200,000 of Industrial Development Bonds in 1983 and 1985. Annual principal ~~amount of industrial development bonds due June 2008.~~payments and monthly interest payments are required through maturity in December 2010. The ~~lease had an initial, non-cancelable term of ten years expiring on June 30, 1994, with two optional five-year renewals~~Partnership 1 Industrial Development Bonds are collateralized by the ~~Company. In December 1985,~~distribution facility and the ~~partnership financed~~individual partners guarantee the ~~construction~~bond repayments. As of ~~an additional 190,000 square feet~~February 2, 2003, $3,214,000 was outstanding under the Partnership 1 Industrial Development Bonds.

The operating lease for this distribution facility requires us to pay annual rent of space through the sale of $2,900,000 principal amount of industrial development bonds due 2010. The Company's lease with the partnership was amended to include additional rent plus interest on the new bonds for the same lease term as the original lease. In December 1993, the Company exercised the two five-year renewal options and is now obligated to lease the space until June 30, 2004. Effective July 1, 1994, the fixed basic monthly rent is $51,500. Rental payments consist of basic monthly rent,$618,000 plus interest on the bonds ~~(a floating~~calculated at a variable rate ~~equal to 55% of the prime rate of a designated bank)~~determined monthly (2.5% in February 2, 2003), applicable taxes, insurance and maintenance expenses. ~~In connection with~~Although the ~~December 1993 transaction, both~~current term of the ~~partnership and~~lease expires in August 2004, we are obligated to renew the ~~Company provided to~~operating lease until these bonds are fully repaid.

We have an ~~unaffiliated bank an indemnity against certain environmental liabilities. Retail Store Facility In~~operating lease entered into in August 1990 ~~the Company entered into a separate agreement to lease a second~~for another distribution ~~center, consisting of approximately 307,000 square feet, adjacent to the existing distribution center~~facility in Memphis, Tennessee. The lessor is a general partnership ~~that includes Messrs.~~(“Partnership 2”) comprised of W. Howard Lester, James A. McMahan and ~~McMahan. The partnership~~two unrelated parties. Partnership 2 does not have operations separate from leasing this distribution facility to us and does not have lease agreements with any unrelated third parties.

Partnership 2 financed the construction of ~~the~~this distribution ~~center~~facility and related addition through the sale of ~~$10,550,000 (bearing~~a total of $24,000,000 of Industrial Development Bonds in 1990 and 1994. Quarterly interest ~~of 10.36%)~~and annual principal amount of industrial development bonds due in August 2015. In September 1994, this lease was amended to include an approximately 306,000 square-foot expansion of the facility. The expansion was completed in October 1995. The lessor financed the construction of the expansionpayments are required through ~~a $500,000 capital contribution from its partners and the sale of $9,825,000 (bearing interest of 9.01%) principal amount of industrial development bonds due~~maturity in August 2015. The ~~amended~~Partnership 2 Industrial Development Bonds are collateralized by the distribution facility and require us to maintain certain financial covenants. As of February 2, 2003, $16,157,000 was outstanding under the Partnership 2 Industrial Development Bonds.

The operating lease ~~has an initial, non-cancelable term~~for this distribution facility requires us to pay annual rent of 15 years beginning August 1991 and ending in July 2006, with three optional five-year renewals. Rentals (including interest on the bonds, sinking fund payments, and fees) for the primary term are payable at an average rate of $711,000 per quarterapproximately $2,700,000, plus applicable taxes, insurance and maintenance expenses. ~~Both facilities were constructed to the Company's specifications. After the option periods, the Company is~~This operating lease has a term of 15 years expiring in August 2006, with three optional five-year renewal periods. We are, however, obligated to renew ~~each~~the lease ~~annually so long as~~until the bonds ~~which financed~~are fully repaid.

On March 4, 2002, our Board authorized management to obtain information, conduct negotiations, and enter into appropriate agreements with the ~~specific projects remain outstanding. The leases qualify as operating leases for accounting purposes. The Company believes~~intent to pursue potential acquisitions of the distribution facilities currently leased from Partnerships 1 and 2 prior to the end of fiscal 2002. In January 2003, management concluded that the ~~facility leases are~~acquisition of such distribution facilities would not be beneficial to us from both an operational and financial standpoint. Therefore, the distribution facilities were not acquired.

Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers and holders of more than 10% of our common stock to file reports regarding their ownership and changes in ownership of our stock with the U.S. Securities and Exchange Commission. Based on ~~terms no~~their filings with the Securities and Exchange Commission and information provided to us by them, we believe that during fiscal 2002, our directors, officers and 10% shareholders complied with all Section 16(a) filing requirements, except that Mr. Mueller filed a Form 4 reporting the option grant in connection with his hiring one day late and Mr. Connolly reported a sale of 40,000 shares late.

This table sets forth information regarding the ownership of our common stock, as of March 31, 2003, by:


	•	each person known to us to own more than 5% of our outstanding common stock;

	•	each director nominee;

	•	each of our officers; and

	•	all current executive officers and directors as a group.

Unless otherwise noted, the persons listed below have sole voting and investment power. Unless otherwise noted, the address of each shareholder noted in the following table is c/o Williams-Sonoma, Inc., 3250 Van


(1)	Assumes exercise of stock options beneficially owned by the named individual or entity into shares of the Company’s Common Stock. Based on XXX shares outstanding as of March 31, 2003.

(2)	Includes XXX shares subject to nonqualified stock options, which are currently exercisable or exercisable within 60 days as of March 31, 2003.

(3)	Includes XXX shares subject to nonqualified stock options, which are currently exercisable or exercisable within 60 days as of March 31, 2003.

(4)	The information above and in this footnote is based on share information taken from the Schedule 13G of American Express Financial Corporation, filed February 13, 2003. American Express Financial Corporation, a parent holding company and registered investment advisor, has shared dispositive power of 8,492,192 shares of common stock and shared voting power over 4,425,930 shares of common stock.

(5)	The information above and in this footnote is based on share information taken from the Schedule 13G of Capital Group International, Inc., filed February 11, 2003. Capital Group International, Inc., a parent holding company of a group of investment management companies, has sole dispositive power over 4,136,980 shares of common stock and sole voting power over 3,374,860 shares of common stock.

(6)	Includes (i) XXX shares subject to nonqualified stock options, which are currently exercisable or exercisable within 60 days as of March 31, 2003, and (ii) XXX shares owned by a trust established for the benefit of Mr. Connolly’s children.


(7)	Includes XXX shares subject to nonqualified stock options, which are currently exercisable or exercisable within 60 days as of March 31, 2003.

(8)	Includes XXX shares subject to nonqualified stock options, which are currently exercisable or exercisable within 60 days as of March 31, 2003.

(9)	Includes XXX shares subject to nonqualified stock options, which are currently exercisable or exercisable within 60 days as of March 31, 2003.


(10)	Includes XXX shares subject to nonqualified stock options, which are currently exercisable or exercisable within 60 days as of March 31, 2003.

(11)	Includes XXX shares subject to nonqualified stock options, which are currently exercisable or exercisable within 60 days as of March 31, 2003.

(12)	Includes XXX shares subject to nonqualified stock options, which are currently exercisable or exercisable within 60 days as of March 31, 2003 and 4,400 shares held by Mr. Robertson’s spouse.

(13)	Includes XXX shares subject to nonqualified stock options, which are currently exercisable or exercisable within 60 days as of March 31, 2003.

(14)	Includes XXX shares subject to nonqualified stock options, which are currently exercisable or exercisable within 60 days as of March 31, 2003.

(15)	Includes XXX shares subject to nonqualified stock options, which are currently exercisable or exercisable within 60 days as of March 31, 2003.

(16)	Includes XXX shares subject to nonqualified stock options which are currently exercisable or exercisable within 60 days as of March 31, 2003.

Shareholder proposals must comply with two sets of requirements. First, shareholder proposals must comply with our Restated Bylaws. Under our Restated Bylaws, a shareholder must give advance notice to our Secretary of any business, including nominations of candidates for our Board, that the shareholder wishes to bring before our Annual Meeting. To be timely, the notice must be received by our Secretary not less ~~favorable~~than 45 days nor more than 75 days prior to the first anniversary of the date of the mailing of proxy materials for the preceding year’s Annual Meeting of shareholders. If the date of the Annual Meeting changes by more than 30 days from the anniversary of the preceding year’s Annual Meeting, notice by the shareholder must be delivered not later than the ~~Company could have obtained from third parties in arm's-length transactions. 14~~ 17 PROPOSAL 2 APPROVAL OF AMENDMENT AND RESTATEMENT OF ARTICLE IV OF THE ARTICLES OF INCORPORATION BACKGROUND On March 15, 1999,close of business on the ~~Board of Directors approved an amendment and restatement of Article IV ("Article IV")~~later of the ~~Company's Restated Articles~~90th day prior to such Annual Meeting and the 10th day following the day on which public announcement of ~~Incorporation (the "Article IV Amendment"), and directed~~ the ~~Article IV Amendment~~date of such meeting is first made by us. With respect to ~~be submitted~~a shareholder’s nomination of a candidate for our Board, the shareholder notice to the ~~shareholders for their approval at~~Secretary must contain certain information as set forth in our Restated Bylaws about both the ~~Annual Meeting. DESCRIPTION OF THE PROPOSED ARTICLE IV AMENDMENT As currently in effect, Article IV requires~~nominee and the ~~approval of two-thirds of~~shareholder making the Company's outstanding shares entitled to vote for the following actions: (a) a merger or consolidation of the Company or a subsidiary; (b) the sale or other disposition by the Company or a subsidiary of substantially all of the assets of the Company or a subsidiary; or (c) the adoption of any plan or proposal for dissolution or liquidation of the Company. By its terms, Article IV does not applynomination. With respect to any other business that the shareholder proposes, the shareholder notice must contain a brief description of such ~~transaction solely between~~business, the Company and another corporation of which 50% or more of the outstanding shares entitled to vote are owned, directly or indirectly, by the Company. The effect of Article IV is to require a two-thirds supermajority approval of the Company's outstanding shares in instances where the California General Corporation Law (the "CGCL") requires either the approval of a lesser proportion of the Company's shares or no shareholder approval at all. Under the CGCL, the approval of a majority of the Company's outstanding shares entitled to vote is generally required to approve a merger or consolidation of the Company, the sale by the Company of substantially all of its assets, or the voluntary winding up and dissolution of the Company. The CGCL generally does not require the Company to obtain the approval of its shareholdersreasons for the merger or consolidation of a subsidiary of the Company, or the sale by a subsidiary of substantially all of its assets. Article IV was adopted by the Company's Board of Directors and shareholders in 1984 as an anti-takeover or defensive measure against an unwanted or coercive attempt to acquire the Company. In particular, Article IV was designed to discourage in advance hostile tender offers by persons attempting to acquire, with a view towards a subsequentconducting such business combination, only that portion of the Company's stock necessary to obtain control and force the business combination. However, Article IV, may have the negative effect of delaying or impeding certain common corporate transactions that are unrelated to a hostile takeover of the Company. First, Article IV would require two-thirds supermajority approval of the Company's shareholders before any subsidiary, regardless of its size, could sell substantially all of its assets. However, Article IV would permit, without a shareholder vote, the sale by the Company of all of the stock of a subsidiary unless such subsidiary constituted substantially all of the Company's assets. Second, Article IV would require the Company to obtain the approval of two-thirds of its outstanding shares before the Company could make any acquisition, regardless of its size, via a "subsidiary merger," a commonly employed acquisition structure. (Under this structure, a newly-formed subsidiary of the acquiror merges with the target, with the shareholders of the target receiving cash and/or the acquiror's securities in the merger and the target becoming a wholly-owned subsidiary of the acquiror.) Absent Article IV, such a transaction would not ordinarily require approval of the Company's shareholders. New York Stock Exchange rules would require shareholder approval if, in such transaction, the Company was to issue enough of its stock to increase its outstanding shares or voting power by 15 ~~18 20%; however, the vote required would be a majority of the shares present and voting~~ at the meeting, not two-thirds of the outstanding shares. The Board of Directors believes it is in the best interests of the Company and its shareholders to amend and restate Article IV to eliminate the negative effects discussed above. The Article IV Amendment would eliminate the requirement that the Company obtain the approval of two-thirds of its outstanding shares in the case of (i) the merger or consolidation of a subsidiary, or (ii) the sale oras well as certain other disposition of substantially all of the assets of a subsidiary where such assets do not constitute substantially all of the assets of the Company and its subsidiaries on a consolidated basis. Therefore, the Article IV Amendment will enhance management's ability to effect various corporate transactions involving a subsidiary of the Company by eliminating the need for a shareholder vote, except where such vote would otherwise be required under the CGCL or the rules of the New York Stock Exchange. As stated above, by its current terms Article IV excludes from its coverage transactions solely between the Company and another corporation of which 50% or more of the outstanding shares entitled to vote are owned, directly or indirectly, by the Company. The Article IV Amendment would also modify Article IV to exclude from Article IV's coverage transactions solely between the Company and one or more controlled entities or between two or more controlled entities, with "controlled entity" definedinformation as a legal entity of which 50% or more of the outstanding equity entitled to vote is owned, directly or indirectly, by the Company. The Board of Directors believes this modification is necessary to clarify the intent of the existing exclusion. Under the CGCL, if a California corporation with 100 or more shareholders of record files, on or after January 1, 1989, an amendment to its articles of incorporation containing a supermajority voting provision such as Article IV, then the supermajority voting provision ceases to be effective after two years unless readopted by the same shareholder vote specified in the supermajority voting provision. The Company does not believe that this readoption requirement would apply to Article IV if it is amended as described above, because Article IV was originally adopted prior to January 1, 1989. However, if Article IV is amended as described above, it is possible that a shareholder of the Company or a third party will assert that Article IV will need to be readopted every two years by the affirmative vote of at least two-thirds of the Company's outstanding shares entitled to vote or otherwise cease to be effective. The full text of Article IV, as amended and restated by the Article IV Amendment, is set forth in ~~Appendix A~~our Restated Bylaws.

Secondly, pursuant to ~~this~~Rule 14a-8 under the Securities Exchange Act of 1934, shareholder proposals for our 2004 Annual Meeting must be received by our Secretary no later than December 17, 2003 since the Proxy Statement. REQUIRED VOTE; RECOMMENDATION OF THE BOARD OF DIRECTORS Under the terms of Article IV, the Article IV Amendment requires the affirmative vote of 66 2/3% of the outstanding shares of the Company's Common Stock. For purposes of calculating the votes for and against the proposal, abstentions and broker non-votes will be treated as votes against the proposal. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO APPROVE THE AMENDMENT AND RESTATEMENT OF ARTICLE IV. 16 19 PROPOSAL 3 RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS As recommended by its Audit Committee, the Board of Directors has selected Deloitte & Touche LLP as independent accountantsStatement for the fiscal year ending January 30, 2000, subject to ratification by the shareholders. Deloitte & Touche LLP, formerly known as Touche Ross & Co., has audited the Company's financial statements since the fiscal year ended March 31, 1980. It is expected that their representative will be present at the meeting and will have the opportunity to make a statement if he or she desires to do so. The representative will be available to respond to appropriate questions.2003 Annual Meeting was mailed on April 14, 2003. In the event that the selection of Deloitte & Touche as independent accountants for the fiscal year ending January 30, 2000, is not ratified by the shareholders, the Board of Directors will select other independent accountants. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THIS REAPPOINTMENT. OTHER MATTERS The Company knows of no other matterswe elect to be acted upon at the meeting other than those referred to in the accompanying notice of the meeting. However, if any other matter should properly come before the meeting, holders of the proxies solicited hereby will vote thereon in their discretion. PROPOSALS OF SHAREHOLDERS Proposals intended to be presented by shareholders at the 2000hold our next Annual Meeting at a different time of ~~Shareholders and included in~~year than the ~~Company's proxy statement for such meeting~~time of year of this Annual Meeting, shareholder proposals must be received by us within a reasonable time before our solicitation is made. Shareholder nominations of directors are not shareholder proposals within the meaning of Rule 14a-8 and are not eligible for inclusion in our proxy statement.

If we do not have notice of a matter to come before the 2003 Annual Meeting by the earlier of March 15, 2003 or the date specified in the first paragraph of this section (or, in the event the next Annual Meeting is held at a different time of year as described in such paragraph, then by the date described in such paragraph), our proxy for such meeting will confer discretionary authority to vote for such matter.

Shareholder proposals should be sent to the Secretary, ~~of the Company at~~Williams-Sonoma, Inc., 3250 Van Ness Avenue, San Francisco, California ~~94109, on or before December 16, 1999.~~ 94109.

A ~~COPY OF THE COMPANY'S ANNUAL REPORT ON FORM~~copy of our Annual Report on Form 10-K, FOR FISCAL YEAR 1998 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS AVAILABLE UPON WRITTEN REQUEST AND WITHOUT CHARGE TO ANY SHAREHOLDER BY WRITING TO: Secretary Williams-Sonoma, Inc. 3250 Van Ness Avenue including the financial statements and financial statement schedules, for fiscal 2002 as filed with the Securities and Exchange Commission is available upon written request and without charge to any shareholder by writing to:


	Secretary
	Williams-Sonoma, Inc.
	3250 Van Ness Avenue
	San Francisco, California 94109

The primary function of the Audit Committee is to assist the Board of Directors ~~Dennis A. Chantland, Secretary San Francisco, California April 16, 1999 17~~ 20 APPENDIX A AMENDMENT AND RESTATEMENT OF ARTICLE IV OF THE COMPANY'S RESTATED ARTICLES OF INCORPORATION ARTICLE IV Notwithstanding that applicable law would otherwise permit actionin fulfilling its oversight responsibilities by: (1) monitoring the integrity of the financial reports and other financial information provided by Williams-Sonoma, Inc. (the “Company”) to any governing body or the public, (2) appointing and/or replacing the Company’s independent auditor and assessing the independent auditor’s qualifications and independence, (3) reviewing the performance of the Company’s internal audit function and independent auditors, and the Company’s auditing, accounting, and financial reporting processes in general, and (4) monitoring the Company’s compliance with legal and regulatory requirements.

Consistent with this function, the Audit Committee should encourage continuous improvement of, and should foster adherence to, the Company’s policies, procedures, and practices at all levels. The Audit Committee’s primary duties and responsibilities are to:


	•	Serve as an independent and objective party to monitor the Company’s financial reporting process and internal control system.

	•	Review and appraise the audit efforts of the Company’s independent auditor and internal audit department, including obtaining and reviewing a report from the Company’s independent auditor at least annually regarding the adequacy of internal controls, among other things.

	•	Provide an open avenue of communication among the independent auditors, financial and senior management, the internal audit department, and the Board of Directors.

The Audit Committee shall prepare the report required by the rules of the Securities and Exchange Commission (the “Commission”) to be ~~taken with~~included in the ~~approval~~Company’s annual proxy statement.

The Board of ~~a lesser percentage, each~~Directors of Williams-Sonoma, Inc. has established the Audit Committee pursuant to Section 311 of the ~~following actions~~General Corporation Law of the State of California and Article III of the Company’s Restated Bylaws.

The Audit Committee shall ~~require the affirmative vote~~be comprised of not less than ~~two-thirds~~three independent members of the ~~outstanding shares~~Company’s Board of Directors. Subject to the foregoing, the exact number of members of the Audit Committee shall be fixed and may be changed from time to time by resolution duly adopted by the Board of Directors. Audit Committee members shall not simultaneously serve on the audit committees of more than two other public companies. The members of the Audit Committee shall be appointed by the Board on the recommendation of the Nominations and Corporate Governance Committee. Audit Committee members may be replaced by the Board.

The members of the Audit Committee shall meet the independence and experience requirements of the New York Stock Exchange, Section 10A(m)(3) of the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules and regulations of the Commission. At least one member of the Audit Committee shall be an “audit committee financial expert” as defined by the Commission; provided, however, that it shall be sufficient for at least one member of the Audit Committee to have equivalent expertise, as determined by the Board, if permitted by the New York Stock Exchange Listing Standards.

The members of the Audit Committee shall be elected by the Board of Directors until their successors shall be duly elected and qualified. Unless a Chair is elected by the full Board, the members of the Committee may designate a Chair by majority vote of the full Committee membership.

The Audit Committee shall have the sole authority to appoint or replace the independent auditor (subject, if applicable, to shareholder ratification). The Audit Committee shall be directly responsible for the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work. The independent auditor shall report directly to the Audit Committee.

The Audit Committee shall preapprove all auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for the Company by its independent auditor, subject to the de minimus exceptions for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act, which services are approved by the Audit Committee prior to the completion of the audit. The Audit Committee may form and delegate authority to subcommittees consisting of one or more members when appropriate, including the authority to grant preapprovals of audit and permitted non-audit services, provided that decisions of such subcommittee to grant preapprovals shall be presented to the full Audit Committee at its next scheduled meeting.

The Audit Committee shall have the authority, to the extent it deems necessary or appropriate, to retain independent legal, accounting or other advisors. The Company shall provide for appropriate funding, as determined by the Audit Committee, for payment of compensation to the independent auditor for the purpose of rendering or issuing an audit report and to any advisors employed by the Audit Committee.

The Audit Committee shall make regular reports to the Board. The Audit Committee shall review and reassess the adequacy of this ~~corporation entitled~~Charter annually and recommend any proposed changes to ~~vote: (a) a merger~~the Board for approval. The Audit Committee shall annually review the Audit Committee’s own performance.

In addition to the responsibilities outlined elsewhere in this Charter, the Audit Committee shall perform such other specific functions as the Company’s Board of Directors may from time to time direct, and make such investigations and reviews of the Company and its operations as the Chief Executive Officer or ~~consolidation~~the Board of ~~this corporation; (b)~~Directors may from time to time request.

The Audit Committee, to the ~~sale~~extent it deems necessary or appropriate, shall:

Review and discuss with management and the independent auditor the annual audited financial statements, including disclosures made in management’s discussion and analysis, and recommend to the Board whether the audited financial statements and management’s discussion and analysis should be included in the Company’s Form 10-K.

Review and discuss with management and the independent auditor the Company’s quarterly financial statements prior to the filing of its Form 10-Q, including the results of the independent auditor’s review of the quarterly financial statements.

Discuss with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of the Company’s financial statements, including any significant changes in the Company’s selection or application of accounting principles, any major issues as to the adequacy of the Company’s internal controls and any special steps adopted in light of significant deficiencies in internal controls.


	All critical accounting policies and practices to be used.

	All alternative treatments of financial information within generally accepted accounting principles that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor.

	Other material written communications between the independent auditor and management, such as any management letter or schedule of unadjusted differences.

Discuss with management the Company’s earnings press releases, including the proposed use of any “pro forma” or “adjusted” non-GAAP information, as well as financial information and earnings guidance provided to analysts and rating agencies. Such discussion may be done generally (consisting of discussing the types of information to be disclosed and the types of presentations to be made).

Discuss with management and the independent auditor the effect on the Company’s financial statements of regulatory and accounting initiatives as well as off-balance sheet arrangements, contractual obligations and contingent liabilities and commitments.

Discuss with management the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures, including the Company’s risk assessment and risk management policies.

Discuss with the independent auditor the matters required to be discussed by Statement on Auditing Standards No. 61 relating to the conduct of the audit, including any difficulties encountered in the course of the audit work, any restrictions on the scope of activities or access to requested information, and any significant disagreements with management.

Review disclosures made to the Audit Committee by the Company’s CEO and CFO during their certification process for the Form 10-K and Form 10-Q about any significant deficiencies in the design or operation of internal controls or material weaknesses therein and any fraud involving management or other ~~disposition by this corporation or~~employees who have a ~~subsidiary of assets that constitute substantially all~~significant role in the Company’s internal controls.

Oversight of the ~~assets~~Company’s Relationship with the Independent Auditor

Review and evaluate the lead partner of ~~this corporation~~the independent auditor team.

Obtain and review a report from the independent auditor at least annually regarding (a) the independent auditor’s internal quality-control procedures, (b) any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm, (c) any steps taken to deal with any such issues, and (d) all relationships between the independent auditor and the Company. Evaluate the qualifications, performance and independence of the independent auditor, including considering whether the auditor’s quality controls are adequate and the provision of permitted non-audit services is compatible with maintaining the auditor’s independence, and taking into account the opinions of management and internal auditors. The Audit Committee shall present its conclusions with respect to the independent auditor to the Board.

Ensure the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law. Consider whether, in order to assure continuing auditor independence, it is appropriate to adopt a policy of rotating the independent auditing firm on a regular basis.

Recommend to the Board policies for the Company’s hiring of employees or former employees of the independent auditor who participated in any capacity in the audit of the Company.

Consider discussing with the national office of the independent auditor material issues on which they were consulted by the Company’s audit team and matters of audit quality and consistency.

Meet with the independent auditor prior to the audit to discuss the planning and staffing of the audit.

Review the appointment and replacement of the senior internal auditing executive.

Review the significant reports to management prepared by the internal auditing department and management’s responses and subsequent follow-up on the responses.

Discuss with the independent auditor and management the internal audit department responsibilities, budget and staffing and any recommended changes in the planned scope of the internal audit.

Oversight of the Company’s Information Technology Systems to Support the Company’s Internal Controls

Discuss with the senior information technology executive and the Company’s Chief Financial Officer and Chief Accounting Officer at least once each year the sufficiency of company systems to support effective internal controls and any recommended changes in the information technology department’s priorities and projects planned for improving such systems.

Review reports to management, if any, prepared by the Company’s information technology department relating to systems’ integrity and security, and subsequent follow-up on the responses.

Obtain from the independent auditor assurance that Section 10A(b) of the Exchange Act (relating to audit discoveries of illegal acts) has not applied.

Obtain reports from management, the Company’s senior internal auditing executive and the independent auditor that the Company and its ~~subsidiaries~~subsidiary/foreign affiliated entities are in conformity with applicable legal requirements and the Company’s Code of Business Conduct and Ethics. Review reports and disclosures of insider and affiliated party transactions. Advise the Board with respect to the Company’s policies and procedures regarding compliance with applicable laws and regulations and with the Company’s Code of Business Conduct and Ethics.

Establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.

Discuss with management and the independent auditor any correspondence with regulators or governmental agencies and any published reports which raise material issues regarding the Company’s financial statements or accounting policies.

Discuss with the Company’s General Counsel legal matters that may have a material impact on ~~a consolidated basis;~~the financial statements or ~~(c)~~ the ~~adoption~~Company’s compliance policies.

While the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit Committee to plan or ~~proposal for dissolution~~conduct audits or ~~liquidation~~to determine that the Company’s financial statements and disclosures are complete and accurate and are in accordance with generally accepted accounting principles and applicable rules and regulations. These are the responsibilities of ~~this corporation; provided that~~management and the independent auditor.

A. The Audit Committee shall keep regular minutes of its meetings. Meetings and actions of the Audit Committee shall be governed by, and held and taken in accordance with, the provisions of ~~this~~ Article IV shall not apply to any such transaction solely between this corporation and one or more Controlled Entities or between two or more Controlled Entities. "Controlled Entity" means a legal entity of which 50% or moreIII, Section 3.9 of the ~~outstanding equity entitled to vote is owned, directly or indirectly, by this corporation. Notwithstanding any other provision of these~~Company’s Restated Articles of Incorporation or the Bylaws of this corporation and notwithstanding that a lesser percentage may be specified by law, these Restated Articles of Incorporation or the Bylaws of this corporation, the affirmative vote ofBylaws.

B. The Audit Committee shall meet as often as it determines, but not less frequently than ~~two-thirds of~~four times per year.

C. The Audit Committee shall meet at least annually with management, the ~~outstanding shares of this corporation entitled to vote shall be required to amend~~internal auditors, and the independent auditors in separate executive sessions. The Audit Committee may request any officer or ~~repeal, or adopt any provision inconsistent with this Article IV. 18~~ 21 PROXY WILLIAMS-SONOMA, INC. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned shareholder of Williams-Sonoma, Inc. (the "Company") hereby appoints W. Howard Lester and Dennis A. Chantland, and each of them, with full power of substitution to each, true and lawful attorneys, agents and proxyholders of the undersigned, and hereby authorizes them to represent and vote, as specified herein, all shares of Common Stockemployee of the Company ~~held of record by~~or the ~~undersigned on March 30, 1999, at the 1999 Annual Meeting of Shareholders~~Company’s outside counsel or independent auditor to attend a meeting of the ~~Company,~~Audit Committee or to ~~be held on Wednesday, May 26, 1999 at 10:00 a.m. (Pacific Daylight Time) at 3250 Van Ness Avenue, San Francisco, California 94109, and~~meet with any ~~adjournments~~members of, or ~~postponements thereof. The Proxy when properly signed will be voted in~~consultants to, the manner directed on this Proxy by the undersigned. If no direction is made, this Proxy will be voted for the election of the named directors, FOR proposal 2, FOR proposal 3, and in the manner described in item 4 of this Proxy. (PLEASE DATE AND SIGN ON REVERSE SIDE.) ----------- SEE REVERSE SIDE ----------- - -------------------------------------------------------------------------------- -FOLD AND DETACH HERE- 22 Please mark your votes as indicated in /X/ this example. The Board of Directors recommends a vote "FOR" Items 1, 2 and 3. FOR AGAINST ABSTAIN 1. ELECTION OF DIRECTORS FOR the election as WITHHOLD 2. Proposal to approve the amendment and / / / / / / directors of all nomi- AUTHORITY restatement of Article IV of the nees listed (except as to vote for all Articles of Incorporation. marked to the contrary). nominees listed. FOR AGAINST ABSTAIN / / / / 3. Proposed to ratify the selection of / / / / / / Deloitte & Touche LLP as independent accountants for the 1999 fiscal year. (INSTRUCTION: To withhold authority to vote for any individual nominee, strike a line through that 4. In their discretion, the Proxyholders are authorized to vote nominee's name in the list below): upon such other business as may properly come before this meeting, or any adjournments or postponements thereof. Charles E. Williams Patrick J. Connolly James M. Berry W. Howard Lester Gary G. Friedman John E. Martin James A. McMahan Adrian D.P. Bellamy Janet L. Emerson Nathan Bessin NOTE: stock has been issued in the name of two or more persons, all should sign. When signing as attorney, administrator, trustee or guardian, give full title as such. A corporation should have the name signed by its president or other authorized officer, with the office held designated. The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of Shareholders, the Proxy Statement and the Annual Report for the 1997 Fiscal Year furnished herewith. ______________________________________________________ Please Prince Name(s) Signature(s)____________________________________________________________________________________________ Date ____________, 1999 Please sign exactly as your name or names on this proxy and return it promptly in the enclosed envelope. - --------------------------------------------------------------------------------------------------------------------------------- - FOLD AND DETACH HERE-


MEETING DATE:		Wednesday, May 28, 2003

TIME:		10:00 a.m.

PLACE:		3250 Van Ness Avenue San Francisco, CA 94109

ITEMS OF BUSINESS:		1) The election of the full board of directors.

		2) The amendment of the Williams-Sonoma, Inc. Restated Articles of Incorporation, as amended, to restate the provisions governing the company’s authority to indemnify its directors, officers, employees and other agents.

		3) The ratification of the selection of Deloitte & Touche LLP as independent auditors for the fiscal year ending February 1, 2004.

		4) Such other business as may properly come before the meeting or any adjournment or postponement thereof.

WHO CAN VOTE:		You may vote if you were a shareholder of record as of March 31, 2003.

PROXY VOTING:		It is important that your shares be represented and voted at the Annual Meeting. Please mark, sign, date and promptly return the enclosed proxy card in the enclosed envelope. Any proxy may be revoked at any time prior to its exercise at the Annual Meeting.

DATE OF MAILING:		This notice, the Proxy Statement and the Annual Report are first being mailed to shareholders on or about April 14, 2003.


NOTICE OF 2003 ANNUAL MEETING OF SHAREHOLDERS
GENERAL INFORMATION
PROPOSAL 1 ELECTION OF DIRECTORS
PROPOSAL 2 AMENDMENT OF OUR RESTATED ARTICLES OF INCORPORATION, AS AMENDED
PROPOSAL 3 RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
INFORMATION CONCERNING EXECUTIVE OFFICERS
SHAREHOLDER PROPOSALS
AVAILABILITY OF REPORT ON FORM 10-K
EXHIBIT A Williams-Sonoma, Inc. Audit Committee Charter


	Director
Nominee	Since		Position with the Company and ~~its Vice Chairman 1973 547,125(2) 1.0% since 1986.~~ Business Experience

W. Howard ~~Lester...... 63~~ Lester		1979	Chairman since 1986
Age 67			Chief Executive Officer, 1979 — 2001
			Member of the ~~Company since 1986~~Nominations and Corporate Governance
			Committee
			Director of Harold’s Department Stores, Inc. (retail sales)
Edward A. Mueller		1999	Chief ~~1979 5,187,093(3) 9.2%~~ Executive Officer since 1979. Director of The Good Guys, Inc., CKE Restaurants, Inc., Harold's Stores, Inc., and Il Fornaio Adrian D.P. Bellamy... 57 Chairman and Director of Airport Group Int'l 1997 25,282(4) * and Gucci Group N.V. Director of The Gap, Inc., Paragon Trade Brands, Inc., The Body Shop Inc. and Shaman Pharmaceuticals, Inc. Chairman and CEO of DFS Group Ltd. from 1983-1995. James M. Berry........ 68 Executive Vice President of Finance of Belk 1987 68,550(5) * Stores Services since 1995. Director of HCC Insurance Holdings, Inc. since 1993. Nathan Bessin......... 73 Managing Partner of J. Arthur Greenfield & Co., 1983 75,150(5) * Certified Public Accountants since 1978. Director of Mercury General Corp. Patrick J. Connolly... 52 Executive Vice President, General 1983 502,272(6) * Manager -- Catalog and Assistant Secretary of the Company since 1995 and 1983, respectively. Janet Emerson......... 50 January 2003
Age 55			President and Chief Executive Officer of Ameritech
			(telecommunications), 2000 — 2002
			President of:
			SBC Int’l Operations (telecommunications), 1999 — 2000
			Pacific Bell (telecommunications), 1997 ~~14,998(4) * Learningsmith, Inc.~~— 1999
			Southwestern Bell (telecommunications), 1994 — 1997
Charles E. Williams		1973	Founder and Vice Chairman since ~~1995. Director~~1986
Age 87
Adrian D.P. Bellamy		1997	Chairman of ~~Retail -- Stores, Catalog~~the Compensation Committee
Age 61			Member of the Nominations and ~~Wholesale Divisions, Museum of Fine Arts Boston from 1994-1995 Gary G. Friedman...... 41 Chief Merchandising Officer~~Corporate Governance
			Committee and ~~1993 831,824(7) 1.5% President -- Retail Stores since 1995. John E. Martin........ 53~~ Audit Committee
			Chairman and Director of:
			The Body Shop Inc.
			The Body Shop International PLC (personal care products)
			Gucci Group N.V. (luxury goods)
			Director of:
			The Gap, Inc. (clothing)
			Reckitt Benckiser PLC (household, personal and health
			products)
			The Robert Mondavi Corporation (wine)
Patrick J. Connolly		1983	Executive Vice President and Chief Marketing Officer
Age 57			since 2000
			Executive Vice President, General Manager, Catalog,
			1995 — 2000
			Senior Vice President, Mail Order, 1991 — 1995
			Vice President, Mail Order from 1979 — 1990
Michael R. Lynch		2000	Chairman of ~~Diedrich Coffee~~the Nominations and ~~1994 235,500(8) * Newriders, Inc. since 1997.~~Corporate Governance
Age 51			Committee and Chairman of Audit Committee
			Member of the Audit Committee
			Managing Director of ~~The Good Guys,~~Goldman, Sachs & Co. since 1996
			(investment banking)
James A. McMahan		1979	Chief Executive Officer of McMahan Furniture Stores
Age 80			(furniture), 1947 — 1999
Heather M. Reisman		2000	Member of the Audit Committee
Age 54			Chairman, Chief Executive Officer, President, Indigo Books &
			Music, Inc. ~~Chairman~~(books and music) since August 2001
			Director and Chief Executive Officer of ~~PepsiCo Casual Restaurants from 1996-1997.~~Chapters, Inc. (books),
			2001
			Director, President and Chief Executive Officer of ~~Taco Bell, a wholly-owned subsidiary~~Indigo Books
			and Music, Inc., 1996 — 2001
			Director of ~~PepsiCo from 1983-1996. James A. McMahan...... 76 Chief Executive Officer~~Rogers Cable, Inc. (internet access and videos)
Richard T. Robertson		2000	Member of ~~McMahan Furniture 1979 5,675,200(5) 10.2% Stores~~the Compensation Committee
Age 57			President of Warner Bros. Domestic Television Distribution
			(entertainment) since ~~1947.~~ 1989


		Number of
		Meetings in
Committee and Members	Functions of Committee	Fiscal 2002

Audit: Michael R. Lynch, Chairman Adrian D.P. Bellamy Heather M. Reisman	• Monitors the integrity of financial reports and other financial information prepared by the Company • Appoints and/or replaces the independent auditors and assesses the independent auditors’ qualifications and independence • Reviews the performance of the Company’s internal audit function, independent auditors and the Company’s auditing, accounting and financial reporting procedures • Monitors the Company’s compliance with legal and regulatory requirements		6
Compensation: Adrian D.P. Bellamy, Chairman Richard T. Robertson	• Administers the Company’s compensation plans • Reviews and recommends officers’ compensation		2
Nominations and Corporate Governance: Michael R. Lynch, Chairman Adrian D.P. Bellamy W. Howard Lester	• Establishes corporate governance policies • Makes recommendations for nominees for directors • Considers shareholders’ director nominations		2


Name		Position with the Company and Business Experience

W. Howard Lester		*
Age 67

Edward A. Mueller		*
Age 55

Charles E. Williams		*
Age 87

Laura J. Alber		President, Pottery Barn Brands since 2002
Age 34		Executive Vice ~~Chairman since 1986. Dennis A. Chantland............... 56~~ President, Pottery Barn Brand, 2000-2002
		Senior Vice President, Pottery Barn Catalog and Pottery Barn Kids
		Retail, 1999-2000
		Divisional Vice President, Pottery Barn Catalog, 1997-1999
		Director, Pottery Barn Catalog, 1996-1997

James E. Boike		Executive Vice President and Chief ~~Administrative~~Operating Officer since ~~1995; and Secretary since 1996 Patrick J. Connolly............... 52~~ 2001
Age 56		Executive Vice President, Premium Brands, 2000-2001
		Executive Vice President, Stores and ~~General Manager, Catalog since 1995;~~ Operations, 1997-2000
		Senior Vice President, ~~-- Mail Order, 1991-1995;~~ Stores, 1995-1997
		Vice President, ~~-- Mail Order, 1979-1990; and Assistant Secretary since 1983. Gary G. Friedman.................. 41 Chief Merchandising Officer and President, Retail~~ Stores, ~~since 1995; Executive~~ 1994-1995
		Vice President, ~~1993-1995;~~ Merchandise Operations, 1993-1994

Patrick J. Connolly		*
Age 56

Patrick Cowell		President, Williams-Sonoma Brand since 2002
Age 53		President, Cowell Development (real estate development)
		since 1999
		President and Chief Executive Officer, Airport Group International
		(management and development of international airports),
		1996-1999
		President, Americas and Caribbean, Sun International Hotels and
		Resorts (hotels and resorts), 1994-1996

Donna H. Isralsky		Senior Vice President, ~~-- Stores, 1991-1992;~~Product Supply Chain and International
Age 47		Operations since 1999
		Vice President, ~~-- Stores, 1988-1990. Richard C. Hunter................. 54~~ Product Supply Chain, 1996-1999
		Vice President, Operations, Production and Sourcing of Reebok
		International Ltd. (athletic apparel), 1994-1996

Ronald M. Loeb		Senior Vice President, ~~-- International Operations and Development~~General Counsel since ~~1996. John S. Bronson................... 51~~ 1999
Age 70		Retired, 1997-1999
		Irell & Manella LLP (law firm), 1959-1997, Senior Partner
		1972-1997
		Interim Chief Executive Officer, Mattel, Inc. (toys), 2000
		Director of Mattel, Inc.

Sharon L. McCollam		Senior Vice President, ~~-- Human Resources~~Chief Financial Officer since ~~1999.~~ 2000
Age 40		Vice President, Finance, 2000
		Chief Financial Officer of Dole Fresh Vegetables, Inc. (food
		products), 1996-2000

Dean A. Miller		Senior Vice President, Global Logistics since 2001
Age 40		Vice President, Retail Distribution, 2001
		Vice President, Global Logistics, United Parcel Services (shipper),
		1996-2001


*	Biographical information can be found in the table under the section titled “Information Regarding the Director Nominees.”



											Long Term
											Compensation
											Awards
				Annual
				Compensation(2)				Other			Restricted		Securities
								Annual			Stock		Underlying			All Other
Name and Principal Position		Year(1)		Salary($)		Bonus($)		Compensation($)			Awards($)		Options(#)(3)			Compensation($)

W. Howard Lester			2002	$	904,122	$	XXX	$	65,945	(4)		—		—		$	11,723	(5)
	Chairman of the Board of Directors		2001		899,787		400,000		—			—		100,000			7,754
			2000		893,796		—		—			—		400,000			10,034

Edward A. Mueller			2002		37,500		—		—			—		1,021,000	(6)		80	(7)
	Chief Executive Officer		2001		—		—		—			—		21,000			—
	(commencing January 13, 2003)		2000		—		—		—			—		21,000			—

Laura J. Alber			2002		498,055		XXX		—			—		—			16,800	(8)
	President, Pottery Barn Brands		2001		407,700		175,000		—			—		400,000			7,523
			2000		278,291		—		—			—		—			7,319

James E. Boike			2002		600,000		XXX		—			—		—			12,682	(9)
	Executive Vice President and Chief		2001		544,462		225,000		—			—		200,000			5,403
	Operating Officer		2000		375,680		—		—			—		100,000			5,784

Patrick J. Connolly			2002		499,931		XXX		—			—		—			16,492	(10)
	Executive Vice President, Chief		2001		506,065		140,000		—			—		40,000			7,754
	Marketing Officer, and Director		2000		482,923		—		—			—		400,000			9,304

Dale W. Hilpert			2002		950,000		XXX		—			—		—			6,954	(11)
	Chief Executive Officer		2001		754,038		355,000		25,000		$	7,725,000		1,000,000			954
	(ending January 9, 2003)		2000		—		—		—			—		—			—



					Number of Securities
					Underlying Unexercised				Value of Unexercised
					Options at Fiscal				In-the-Money Options at
	Shares				Year-End(#)				Fiscal Year-End($)(2)
	Acquired on		Value
Name	Exercise(#)(1)		Realized($)		Exercisable		Unexercisable		Exercisable		Unexercisable

W. Howard Lester		324,000	$	9,632,520		2,190,000		260,000	$	35,784,500	$	3,018,200
Edward A. Mueller		—		—		90,000		1,000,000		366,600		—
Laura J. Alber		157,360		2,887,970		162,200		374,300		1,797,334		4,183,360
James E. Boike		—		—		278,000		52,000		3,026,620		687,720
Patrick J. Connolly		34,500		759,334		616,000		220,000		7,670,080		2,231,320
Dale W. Hilpert		90,000		1,039,171		910,000		—		10,565,100		—


Mr. Lester	$	XXX
Mr. Mueller	$	0
Ms. Alber	$	XXX
Mr. Boike	$	XXX
Mr. Connolly	$	XXX
Mr. Hilpert	$	XXX




	2/1/98		1/31/99		1/30/00		1/28/01		2/3/02		2/2/03



Williams-Sonoma, Inc.		100.0		163.0		148.0		119.5		210.4		222.4
NYSE Stock Market		100.0		121.0		123.3		136.2		123.5		100.7
NASDAQ Retail Trade		100.0		122.0		97.8		71.6		89.6		72.9


	D.	The index level for all series was set to $100.00 on 2/1/98.


			Amount and Nature of			Percent of
Name and Address of Beneficial Owner		Position with Company	Beneficial Ownership			Class(1)

James A. McMahan		Director		XX	(2)		XX	%
	2237 Colby Avenue Los Angeles, CA 90064
W. Howard Lester		Chairman		XX	(3)		XX	%
American Express Financial Corporation		—		8,492,192	(4)		XX	%
	200 AXP Financial Center Minneapolis, MN 55474
Capital Group International, Inc.		—		4,136,980	(5)		XX	%
	11100 Santa Monica Boulevard 15th Floor Los Angeles, CA 90025-3384
Patrick J. Connolly		Executive Vice President,		XX	(6)		XX	%
		Chief Marketing Officer, and Director
Charles E. Williams		Founder and		XX			X	%
		Vice Chairman
Dale W. Hilpert		Former Chief Executive		XX	(7)		X
		Officer
Laura J. Alber		President,		XX	(8)		X
		Pottery Barn Brands
James E. Boike		Executive Vice President and		XX	(9)		X
		Chief Operating Officer
Adrian D.P. Bellamy		Director		XX	(10)		X
Richard T. Robertson		Director		XX	(11)		X
Edward A. Mueller		Chief Executive Officer and		XX	(12)		X
		Director
Michael R. Lynch		Director		XX	(13)		X
Heather M. Reisman		Director		XX	(14)		X
All current executive officers and directors as a group (17 persons)		—		XX	(15)		XX	%