EXHIBIT 10.15
SECOND AMENDMENT
TO THE FIRST AMENDMENT AND RESTATEMENT OF THE
WILLIAMS-SONOMA, INC.
ASSOCIATE STOCK INCENTIVE PLAN
(2002 RESTATEMENT)
Williams-Sonoma, Inc., a California corporation (the "Company"), hereby
makes this Second Amendment to the First Amendment and Restatement of the
Williams-Sonoma, Inc. Associate Stock Incentive Plan, generally effective
January 1, 1997, with reference to the following facts:
A. The Company maintains the Williams-Sonoma, Inc. Associate Stock Incentive
Plan, which was most recently amended and restated in its entirety in 2002
(the "Plan"), for the benefit of eligible employees.
B. The Company wishes to amend the Plan to reflect certain provisions of the
Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA"). This
Amendment is intended as good faith compliance with the requirements of
EGTRRA and is to be construed in accordance with EGTRRA and guidance
issued thereunder. This Amendment shall supercede the provisions of the
Plan to the extent those provisions are inconsistent with the provisions
of this Amendment.
C. The Company wishes to amend the Plan to comply with the Section 401(a)(9)
Final and Temporary Regulations issued by the Internal Revenue Service on
April 17, 2002 for purposes of determining minimum required distributions
under Section 401(a)(9) of the Internal Revenue Code of 1986, as amended,
(the "Code") for calendar years beginning with the 2003 calendar year.
D. The Company wishes to amend the Plan to permit adjustments in the Company
Stock Fund upon changes in capitalization.
E. By Section 8.4 of the Plan, the Company has reserved the right to amend
the Plan.
NOW, THEREFORE, the Plan is hereby amended, effective as of the first Plan
Year beginning after December 31, 2001, unless otherwise specified herein, as
follows:
1. The first sentence of Section 1.11(d) shall be amended in its
entirety to provide as follows:
"The annual Compensation of each Participant taken into account in
determining all benefits provided under this Plan for any Plan Year
shall not exceed One Hundred Sixty Thousand Dollars ($160,000.00);
except that, effective
January 1, 2002, such limit shall be increased to Two Hundred
Thousand Dollars ($200,000.00), as adjusted for cost of living
increases after 2002 in accordance with Section 401(a)(17)(B) of the
Code."
2. The following Section 2.16 shall be added to the end of Section 2:
"2.16 Adjustments Upon Changes in Capitalization of Company Stock
In the event shares of Company Stock held in the Company Stock
Fund are increased, decreased, changed into or exchanged for a
different number or kind of shares or securities of the Company or a
member of the same controlled group (within the meaning of Section
409(l)(4) and 1563(a) of the Code as the Company) or a successor
entity, or for other property (including without limitation, cash),
through reorganization, recapitalization, reclassification, stock
combination, stock dividend, stock split, reverse stock split, spin
off or other similar transaction, an appropriate and proportionate
adjustment will be made in the number and kind of shares of Company
Stock held in the Company Stock Fund. A corresponding adjustment
changing the number or kind of shares of Company Stock in the
Company Stock Fund shall likewise be made. Any such adjustment shall
be made with a corresponding adjustment in the price for each share
of Company Stock or other unit held in the Company Stock Fund. Such
adjustment will be made by the Committee, whose determination in
that respect will be final, binding and conclusive."
3. The following sentences shall be added to the end of Section 4.1.6
of the Plan:
"Effective January 1, 2002, the total amount of Contributions under
this Section 4.1 made on behalf of all Participants for a Plan Year
shall not exceed twenty-five percent (25%) of the total Compensation
paid to all Participants during such Plan Year, plus the amount of
any credit for contribution carryovers to which the Employer is
entitled under Section 404(a)(3) of the Code. For purposes of
determining the twenty-five (25%) Contribution limitation under this
Section 4.1.5, Salary Deferral Contributions made under Section
4.1.1 and catch-up contributions shall not be considered
Contributions."
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4. The following sentence shall be added to the end of Section 4.3.1:
"Effective for Plan Years beginning after December 31, 2001, during
any taxable year, the amount of Nine Thousand Five Hundred Dollars
($9,500.00) set forth in this Section 4.3.1 shall be adjusted to
reflect the dollar limitation contained in Section 402(g) of the
Code in effect for such taxable year, except to the extent permitted
under Section 414(v) of the Code."
5. The following sentence shall be added to the end of Section 4.6:
"The Multiple Use test described in this Section 4.6 and Treasury
Regulation Section 1.401(m)-2 shall not apply for Plan Years
beginning after December 31, 2001."
6. Effective November 1, 2002, the following two sentences shall be
added to the end of Section 4.8:
"Notwithstanding the preceding sentence, effective November 1, 2002,
the Plan shall not accept rollover contributions under this Section
4.8 from (i) an annuity contract described in Section 403(b) of the
Code, (ii) an individual retirement account or annuity described in
Sections 408A or 408(b) of the Code, (iii) amounts attributable to
employee after-tax contributions, and (iv) any amounts attributable
to hardship distributions from any other plan. The Plan shall accept
rollover contributions after the initial 60 day period, that are
otherwise permitted under the Plan, provided that the Internal
Revenue Service has granted relief for such rollover contributions
on account of hardship."
7. The first sentence of Section 5.3.1 shall be amended in its entirety
as follows:
"Effective for Limitation Years beginning after January 1, 1994, the
Annual Additions allocated to the Participant Accounts of any
Participant, together with the Annual Additions allocated to a
Participant's account in any other defined contribution plan, as
defined in Section 414(i) of the Code, maintained by the Employer
shall not exceed the lesser of (1) twenty-five percent (25%) of such
Participant's Compensation, or (2) $30,000.00, as adjusted under
Section 415(d) of the Code; except that, effective for Limitation
Years beginning after December 31, 2001, the Annual Additions
contribution limitation shall not exceed the lesser of (1)
one-hundred percent (100%) of such Participant's Compensation, or
(2) $40,000.00, as adjusted under 415(d) of the Code."
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8. The following sentence shall be added to the end of Section 5.3.1:
"Effective for Limitation Years beginning after December 31, 2001,
the term 'Annual Additions' shall not include catch-up contributions
made to the Plan under Section 414(v) of the Code."
9. The following Section 6.4 shall be added to the end of Section 6.
"6.4 Modification of Top-Heavy Rules
This Section 6.4 shall apply for purposes of determining
whether the Plan is a Top-Heavy Plan under Section 416(g) of the
Code for Plan Years beginning after December 31, 2001, and whether
the Plan satisfies the minimum benefits requirements of Section
416(c) of the Code for such years. This Section 6.4 amends the
applicable provisions of Sections 6.1, 6.2 and 6.3 of the Plan as
follows:
6.4.1 'Key Employee' means any Employee or former Employee
(including any deceased Employee) who at any time during the Plan
Year that includes the Determination Date was an officer of the
Employer having annual Compensation greater than $130,000 (as
adjusted under Section 416(i)(1) of the Code for Plan Years
beginning after December 31, 2002), a 5-percent owner of the
Employer, or a 1-percent owner of the Employer having annual
Compensation of more than $150,000. The determination of who is a
Key Employee will be made in accordance with Section 416(i)(1) of
the Code and the applicable regulations and other guidance of
general applicability issued thereunder.
6.4.2 The Present Values of Accrued Benefits and the
Participant's Participant Account balance of an Employee as of the
Determination Date shall be increased by the distributions made with
respect to the Employee under the Plan and any plan aggregated with
the Plan under Section 416(g)(2) of the Code during the 1-year
period ending on the Determination Date. The preceding sentence
shall also apply to distributions under a terminated plan which, had
it not been terminated, would have been aggregated with the Plan
under Section 416(g)(2)(A)(i) of the Code. In the case of a
distribution made for a reason other than separation from Service,
death, or Total Disability, this provision shall be applied by
substituting '5-year period' for '1-year period.'
6.4.3 The Present Value of Accrued Benefits and the
Participant's Participant Account of any individual who has
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not performed Services for the Employer during the 1-year period
ending on the Determination Date shall not be taken into account.
6.4.4 Employer Matching Contributions shall be taken into
account for purposes of satisfying the minimum contribution
requirements of Section 416(c)(2) of the Code and the Plan. The
preceding sentence shall apply with respect to Matching
Contributions under the Plan, or, if the Plan provides that the
minimum contribution requirement shall be met in another plan, such
other plan. Employer matching contributions that are used to satisfy
the minimum contribution requirements shall be treated as Matching
Contributions for purposes of the actual contribution percentage
test under Section 4.5 of the Plan and other requirements of Section
401(m) of the Code."
10. Effective January 1, 2003, the second sentence of Section 7.11 shall
be amended in its entirety to provide as follows:
"Accordingly, the following provisions, which are intended to comply
with such requirements, shall apply notwithstanding any other
provisions of this Plan, provided that, for purposes of determining
distributions for calendar years beginning with the 2003 calendar
year, the provisions of Section 7.16 shall apply notwithstanding any
other provisions of the Plan."
11. The following sentences shall be added to the end of Section 7.14.1:
"Effective for distributions made after December 31, 2001, the term
'Eligible Rollover Distribution' shall not include any amount
distributed on account of hardship under Section 7.15 of the Plan
and a Distributee may not elect to have any portion of a hardship
distribution paid directly to an Eligible Retirement Plan, as
defined in Section 7.14.2. A portion of a distribution shall not
fail to be an 'Eligible Rollover Distribution' merely because the
portion consists of after-tax employee contributions which are not
includible in gross income. However, such portion may be transferred
only to an individual retirement account or annuity described in
Section 408(a) or 408(b) of the Code, or to a qualified defined
contribution plan described in Section 401(a) or 403(a) of the Code
that agrees to separately account for amounts so transferred,
including separately accounting for the portion of such distribution
which is includible in gross income and the portion of such
distribution which is not so includible."
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12. The following sentences shall be added to the end of Section 7.14.2:
"Effective for distributions made after December 31, 2001, an
'Eligible Retirement Plan' shall also mean an annuity contract
described in Section 403(b) of the Code and an eligible plan under
Section 457(b) of the Code which is maintained by a state, political
subdivision of a state, or any agency or instrumentality of a state
or political subdivision of a state and which agrees to separately
account for amounts transferred into such plan from the Plan. The
definition of 'Eligible Retirement Plan' shall also apply in the
case of a distribution to a surviving spouse, or to a spouse or
former spouse who is the alternate payee under a qualified domestic
relations order, as defined in Section 414(p) of the Code."
13. Section 7.15.2.3 of the Plan shall be amended in its entirety as
follows:
"7.15.2.3 A Participant's Salary Deferral Contributions shall be
suspended for twelve (12) months after receipt of the withdrawal
under this Section 7.15 or under any comparable provision of any
plan maintained by the Employer; provided that with respect to
withdrawals under this Section 7.15 made on and after January 1,
2002, the Participant's Salary Deferral Contributions shall be
suspended for six (6) months after receipt of the withdrawal under
this Section 7.15 or under any comparable provision of any plan
maintained by the Employer; and..."
14. Effective January 1, 2003, the following Section 7.16 shall be added
to the end of Section 7:
"7.16 Required Minimum Distributions for Calendar Years Beginning
With the 2003 Calendar Year
Effective for calendar years beginning with the 2003 calendar year,
all distributions required under Section 7.11 will be determined and
made in accordance with the Treasury regulations issued under
Section 401(a)(9) of the Code. Accordingly, the requirements of this
Section 7.16 shall take precedence over any inconsistent provisions
of the Plan. Furthermore, notwithstanding the other provisions of
this Section 7.16, distributions may be made under a designation
made before January 1, 1984, in accordance with Section 242(b)(2) of
the Tax Equity and Fiscal Responsibility Act (TEFRA) and the
provisions of the Plan that relate to Section 242(b)(2) of TEFRA.
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7.16.1 For purposes of this Section 7.16:
(a) The term 'Designated Beneficiary' means the
individual who is designated as the Beneficiary under Section 7.5.2
of the Plan and is the designated beneficiary under Section
401(a)(9) of the Code and Treasury Regulation Section 1.401(a)(9)-1,
Q&A-4.
(b) The term 'Distribution Calendar Year' means a
calendar year for which a minimum distribution is required pursuant
to Section 7.11 of the Plan. For distributions beginning before the
Participant's death, the first Distribution Calendar Year is the
calendar year immediately preceding the calendar year which contains
the Participant's Beginning Date. For distributions beginning after
the Participant's death, the first Distribution Calendar Year is the
calendar year in which distributions are required to begin under
Section 7.16.4. The required minimum distribution for the
Participant's first Distribution Calendar Year will be made on or
before the Participant's Beginning Date. The required minimum
distribution for other Distribution Calendar Years, including the
required minimum distribution for the Distribution Calendar Year in
which the Participant's Beginning Date occurs, will be made on or
before December 31 of that Distribution Calendar Year.
(c) Life expectancy shall be computed by the use of the
Single Life Table in Treasury Regulation Section 1.401(a)(9)-9.
(d) The term 'Participant's Benefit' means the balance
in the Participant's interest in the Trust Fund as of the last
Valuation Date in the calendar year immediately preceding the
Distribution Calendar Year (the "Valuation Calendar Year") increased
by the amount of any contributions made and allocated or forfeitures
allocated to the Participant as of dates in the Valuation Calendar
Year after the Valuation Date and decreased by distributions made in
the Valuation Calendar Year after the Valuation Date. The
Participant's Benefit for the Valuation Calendar Year includes any
amounts rolled over or transferred to the Plan either in the
Valuation Calendar Year or in the Distribution Calendar Year if
distributed or transferred in the Valuation Calendar Year.
(e) The term 'Beginning Date' shall have the meaning
provided under Section 7.11.1(a) of the Plan.
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7.16.2 Unless the Participant's interest is distributed in a
single sum on or before the Beginning Date, as of the first
Distribution Calendar Year, distributions will be made in accordance
with Sections 7.16.3, 7.16.4 and 7.16.5 of the Plan.
7.16.3 Required Minimum Distributions During Participant's
Lifetime.
7.16.3.1 A Participant's entire interest in the Trust
Fund shall be distributed as of the first Distribution Calendar
Year, to such Participant either (a) in full, not later than such
Participant's Beginning Date, or (b) in installments, beginning not
later than such Participant's Beginning Date in accordance with
Section 7.16.3.2.
7.16.3.2 During the Participant's lifetime, the minimum
amount that will be distributed for each Distribution Calendar Year
is the lesser of:
(a) The quotient obtained by dividing the
Participant's Benefit by the distribution period in the Uniform
Lifetime Table set forth in Treasury Regulation Section
1.401(a)(9)-9, using the Participant's age as of the Participant's
birthday in the Distribution Calendar Year; or
(b) If the Participant's sole Designated
Beneficiary for the Distribution Calendar Year is the Participant's
spouse, the quotient obtained by dividing the Participant's Benefit
by the number in the Joint and Last Survivor Table set forth in
Treasury Regulation Section 1.401(a)(9)-9, using the Participant's
and spouse's attained ages as of the Participant's and spouse's
birthdays in the Distribution Calendar Year.
7.16.3.3 Required minimum distributions will be
determined under this Section 7.16.3 beginning with the first
Distribution Calendar Year and up to and including the Distribution
Calendar Year that includes the Participant's date of death.
7.16.4 Death of Participant Before Distributions Are Required
to Begin.
7.16.4.1 If a Participant dies before distributions of
his interest in the Trust Fund are required to begin under Section
7.16.3, such Participant's entire interest in the Trust Fund shall
be completely distributed by December 31 of the calendar year
containing the fifth (5th) anniversary of
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the Participant's death, except to the extent an election is made in
accordance with paragraph (a) or paragraph (b) as follows:
(a) If the Participant's surviving spouse is the
Participant's sole Designated Beneficiary, then distributions to the
surviving spouse may begin by December 31 of the calendar year
immediately following the calendar year in which the Participant
died, or by December 31 of the calendar year in which the
Participant would have attained age 70 1/2, if later.
(b) If the Participant's surviving spouse is not
the Participant's sole Designated Beneficiary, then distributions to
the Designated Beneficiary may begin by December 31 of the calendar
year immediately following the calendar year in which the
Participant died.
If the Participant has not made an election pursuant to this Section
7.16.4 by the time of his death, the Participant's Designated
Beneficiary must elect the method of distribution no later than the
earlier of (i) December 31 of the calendar year in which the
distributions would be required to begin under this Section 7.16.4,
or (ii) December 31 of the calendar year which contains the fifth
(5th) anniversary of the date of the death of the Participant. If
the Participant has no Designated Beneficiary as of September 30 of
the year following the year of the Participant's death, or if the
Designated Beneficiary does not elect a method of distribution,
distribution of the Participant's entire interest in the Trust Fund
must be completed by December 31 of the calendar year containing the
fifth (5th) anniversary of the Participant's death.
7.16.4.2 If the Participant's surviving spouse is the
Participant's sole Designated Beneficiary and the surviving spouse
dies after the Participant but before distributions to the surviving
spouse begin, this Section 7.16.4, other than Section 7.16.4.1(a),
shall apply as if the surviving spouse were the Participant.
7.16.4.3 For purposes of this Section 7.16.4 and Section
7.16.5, unless Section 7.16.4.2 applies, distributions are
considered to begin on the Participant's Beginning Date. If Section
7.16.4.2 applies, distributions are considered to begin on the date
distributions are required to begin to the surviving spouse under
Section 7.16.4.1(a).
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7.16.4.4 If a Designated Beneficiary elects to receive a
distribution under Section 7.16.4.1(b), the minimum amount that will
be distributed for each Distribution Calendar Year after the year of
the Participant's death is the quotient obtained by dividing the
Participant's Benefit by the remaining life expectancy of the
Participant's Designated Beneficiary, determined as provided in
Section 7.16.5.
7.16.5 Required Minimum Distributions After Participant's
Death.
7.16.5.1 If the Participant dies on or after the date
distributions begin and there is a Designated Beneficiary, the
minimum amount that will be distributed for each Distribution
Calendar Year after the year of the Participant's death is the
quotient obtained by dividing the Participant's Benefit by the
longer of the remaining life expectancy of the Participant or the
remaining life expectancy of the Participant's Designated
Beneficiary, determined as follows:
(a) The Participant's remaining life expectancy is
calculated using the age of the Participant in the year of death,
reduced by one for each subsequent year.
(b) If the Participant's surviving spouse is the
Participant's sole Designated Beneficiary, the remaining life
expectancy of the surviving spouse is calculated for each
Distribution Calendar Year after the year of the Participant's death
using the surviving spouse's age as of the spouse's birthday in that
year. For Distribution Calendar Years after the year of the
surviving spouse's death, the remaining life expectancy of the
surviving spouse is calculated using the age of the surviving spouse
as of the spouse's birthday in the calendar year of the spouse's
death, reduced by one for each subsequent calendar year.
(c) If the Participant's surviving spouse is not
the Participant's sole Designated Beneficiary, the Designated
Beneficiary's remaining life expectancy is calculated using the age
of the Designated Beneficiary in the year following the year of the
Participant's death, reduced by one for each subsequent year.
7.16.5.2 If the Participant dies on or after the date
distributions begin and there is no Designated Beneficiary as of
September 30 of the year after the year of the Participant's death,
the minimum amount that will be distributed for each Distribution
Calendar Year after the year
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of the Participant's death is the quotient obtained by dividing the
Participant's Benefit by the Participant's remaining life expectancy
calculated using the age of the Participant in the year of death,
reduced by one for each subsequent year."
15. The following Section 7.17 shall be added to the end of Section 7:
"7.17 Effective January 1, 2002, a Participant's Participant Account
shall be distributed on account of the Participant's severance from
Employment, provided that such distribution, otherwise, complies
with this Section 7 regarding distributions, other than provisions
that require separation from Service before a Participant's
Participant Account can be distributed. Any distribution on account
of a severance from Employment shall be subject to Section 7.5.3 of
the Plan and shall comply with any applicable regulations and other
guidance of general applicability issued under the Code."
This Amendment is intended as good faith compliance with the requirements
of EGTRRA and is to be construed in accordance with EGTRRA and guidance issued
thereunder. This Amendment shall supercede the provisions of the Plan to the
extent those provisions are inconsistent with the provisions of this Amendment.
In all other respects, the terms and provisions of the Plan are hereby
ratified and declared to remain in full force and effect.
IN WITNESS WHEREOF, this Second Amendment has been executed this 31 day of
December, 2002.
WILLIAMS-SONOMA, INC.
By: /s/ John S. Bronson
--------------------------------
Title: Sr. VP Human Resources
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