Exhibit 10.2

WILLIAMS-SONOMA, INC.

MANAGEMENT RETENTION AGREEMENT

This Management Retention Agreement (the “Agreement”) is made and entered into
by and between                      (the “Executive”) and Williams-Sonoma, Inc.
(the “Company”), effective as of the last date signed below (the “Effective
Date”).

RECITALS

A. It is expected that the Company from time to time will consider the
possibility of an acquisition by another company or other change of control. The
Board of Directors of the Company (the “Board”) recognizes that such
consideration can be a distraction to the Executive and can cause the Executive
to consider alternative employment opportunities. The Board has determined that
it is in the best interests of the Company and its stockholders to assure that
the Company will have the continued dedication and objectivity of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined herein) of the Company.

B. The Board believes that it is in the best interests of the Company and its
stockholders to provide the Executive with an incentive to continue their
employment and to motivate the Executive to maximize the value of the Company
upon a Change of Control for the benefit of its stockholders.

C. The Board believes that it is imperative to provide the Executive with
severance benefits upon certain terminations of employment following a Change of
Control. These benefits will provide the Executive with enhanced financial
security and incentive and encouragement to remain with the Company
notwithstanding the possibility of a Change of Control.

D. Certain capitalized terms used in the Agreement are defined in Section 5
below.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
parties hereto agree as follows:

1. Term of Agreement. This Agreement will commence on the Effective Date and
will remain in effect for two years following the Effective Date; provided,
however that the term of this Agreement shall automatically be extended for one
year following the two-year anniversary of the Effective Date unless either
party notifies the other in writing or by e-mail that the term shall not be
extended, with such notice provided at least six months prior to the third
anniversary of the Effective Date; provided, further, that if prior to the
expiration of the term of this Agreement, the Company enters into a definitive
agreement (a “Definitive Agreement”) with a third party (or third parties), the
consummation of which would result in a Change of Control (as defined in this
Agreement), then the term of this Agreement shall automatically be extended to
eighteen months following the resulting Change of Control, unless the Definitive
Agreement terminates or is cancelled without resulting in a Change of Control,
in which case such extension shall not be effective. Moreover, Sections 3 and 8

--------------------------------------------------------------------------------

of this Agreement shall survive the lapse of the term of this Agreement and
shall be binding on both parties with respect to any termination of Executive’s
employment triggering severance benefits under Section 3 that occurs prior to
the lapsing of the term of this Agreement.

2. At-Will Employment. The Company and the Executive acknowledge that the
Executive’s employment is and shall continue to be at-will, as defined under
applicable law. If the Executive’s employment terminates for any reason, the
Executive shall not be entitled to any payments, benefits, damages, awards or
compensation other than as provided under this Agreement, any outstanding
written employment agreement or offer letter by and between Executive and the
Company, or as may otherwise be available in accordance with the Company’s
established employee plans.

3. Severance Benefits.

(a) Involuntary Termination Other than for Cause, Voluntary Termination for Good
Reason Within 18 Months On or Following a Change of Control. If within the
period commencing on a Change of Control and ending eighteen (18) months
following the Change of Control, the Executive’s employment with the Company
(i) is terminated involuntarily by the Company without Cause (as defined in this
Agreement), or (ii) voluntarily by Executive for Good Reason (as defined in this
Agreement), then subject to Executive signing and not revoking a release of
claims in favor of the Company substantially in the form attached as Exhibit A
to this Agreement (a “Release”), the Company shall provide severance pay and
benefits, subject to certain conditions, as follows:

(i) Severance Payment. The Executive shall be entitled to receive a cash
severance payment equal to two hundred percent of the Executive’s annual base
salary (as in effect immediately prior to (A) the Change of Control, or (B) the
Executive’s termination, whichever is greater) plus, if Executive has a
triggering termination in 2010, an amount equal to two hundred percent of the
annual bonus received in the last twelve (12) months; if Executive has a
triggering termination in 2011, an amount equal to two hundred percent of the
average annual bonus received in the last twenty-four (24) months; if Executive
has a triggering termination in 2012 or later, an amount equal to two hundred
percent of the average annual bonus received in the last thirty-six (36) months.
Such cash severance payment shall be paid out ratably over twenty-four
(24) months from the date of employment termination in accordance with the
payroll schedule applicable to active officers of the Company (subject to the
timing provisions of Sections 3(b)(viii) and 9 of this Agreement.

(ii) Equity Compensation Acceleration. One hundred percent (100%) of the
Executive’s outstanding stock options, stock appreciation rights, restricted
stock units and other Company equity compensation awards, including
performance-based vesting full-value awards where the payout is either a fixed
number of shares or zero shares depending on whether the performance metric is
obtained (such as Executive’s March 2010 RSU grant), shall immediately become
fully vested as to all of the underlying shares. With respect to
performance-based vesting full-value awards in which the performance period has
not been completed prior to the Executive’s termination date and where the
number of shares earned is variable based upon the extent to which performance
milestones are reached (i.e., where the number of shares earned based upon
achieving

 

-2-

--------------------------------------------------------------------------------

performance milestones can be more than one positive number), each such award
shall vest at the target performance level as to a pro-rata number of shares in
an amount equal to (A) the number of shares subject to the award that would have
vested at target performance levels (had any additional service-based vesting
requirements been met) multiplied by (B) a fraction, with the numerator being
the number of months that have elapsed from the start of the award’s performance
period (with partial months rounded up to a whole month) through and including
Executive’s termination date and the denominator being the number of full months
in the award’s performance period (with such fraction not to exceed the whole
number one). Any Company stock options and stock appreciation rights shall
thereafter remain exercisable following the Executive’s employment termination
for the period prescribed in the respective option and stock appreciation right
agreements.

(iii) Continued Employee Benefits. In lieu of continued employee benefits (other
than as statutorily required, such as COBRA continuation coverage as required by
law), Executive shall receive payments of three thousand dollars ($3,000) per
month for twelve months from the date of employment termination in accordance
with the payroll schedule applicable to active officers of the Company (subject
to the timing provisions of Sections 3(b)(viii) and 9 of this Agreement.

(b) Voluntary Resignation Other than for Good Reason, Termination for Cause;
Termination due to Death or Disability. If the Executive’s employment with the
Company terminates (i) voluntarily by the Executive other than for Good Reason,
or (ii) for Cause by the Company, or (iii) pursuant to Executive’s death or
Disability, then the Executive shall not be entitled to receive severance or
other benefits except for those (if any) as may then be established under the
Company’s then existing severance and benefits plans and practices or pursuant
to other written agreements with the Company.

(i) Termination Outside of Change of Control. In the event the Executive’s
employment is terminated for any reason, either prior to a Change of Control or
more than eighteen (18) months after a Change of Control, then the Executive
shall be entitled to receive severance benefits only as provided under the
Company’s then existing severance and benefits plans and practices or pursuant
to other written agreements with the Company.

(ii) Termination On or Within 18 Months Following a Change of Control. In the
event Executive’s employment terminates on or within eighteen (18) months
following a Change of Control, Executive shall only receive severance payments
and benefits under this Agreement and not pursuant to the Company’s then
existing severance and benefits plans and practices or pursuant to other written
agreements with the Company.

(iii) Non-Solicitation; Confidential Information. Notwithstanding the foregoing,
the Company’s obligation to provide severance payments and benefits under this
Section 3 is expressly conditioned upon Executive’s ongoing compliance with the
confidential information and non-solicitation provisions of the Company’s
Corporate Code of Conduct as in effect on the date of Executive’s termination of
employment. In the event Executive breaches the terms of the confidential
information and non-solicitation provisions Corporate Code of Conduct as in
effect on such date, the Company’s obligations under this Section 3 shall
automatically terminate, without any notice to Executive.

 

-3-

--------------------------------------------------------------------------------

(iv) No Mitigation. The Executive shall not be required to mitigate the amount
of any severance payments or benefits provided for under this Agreement by
seeking other employment nor shall any amounts to be received by the Executive
under this Agreement be reduced by any other compensation earned.

(v) Tax Withholding. The Company shall be entitled to withhold from any payments
made to Executive under this Section 3 any amounts required to be withheld by
applicable federal, state or local tax law.

(vi) Non-Competition, Non-Solicitation; Confidential Information. If at any time
during the period commencing on Executive’s employment termination date and
ending twelve (12) months later, Executive accepts other employment or a
professional relationship with a competitor of the Company (defined as either
(i) another company primarily engaged in retail sales of products for the home
or (ii) any retailer with retail products for the home sales in excess of one
hundred million dollars ($100,000,000) annually), or if Executive breaches
Executive’s remaining obligations to the Company (e.g., the duty to protect
confidential information and intellectual property and the duties not to solicit
under the Company’s Corporate Code of Conduct), then the Company’s obligations
under this Section 3 will cease such that Executive will not be entitled to any
further payments or benefits under this Section 3 and the Company may seek
injunctive relief against Executive as specified in Section 8(b) hereof.

(vii) Non-Disparagement. While employed by the Company and for a period of
twenty-four (24) months commencing on the date upon which Executive’s employment
terminates, (i) Executive agrees not to make any statements that disparage the
Company, its products, services, officers, employees, members of its Board,
advisers or other business contacts, and (ii) the Company agrees that members of
its Board and the Company’s officers holding a title of Executive Vice President
or above shall not make any statements that disparage Executive. Executive
acknowledges and agrees that upon Executive breaching this non-disparagement
provision on or after the date upon which Executive’s employment terminates then
the Company’s obligations under this Section 3 will cease such that Executive
will not be entitled to any further payments or benefits under this Section 3
and the Company may seek injunctive relief against Executive as specified in
Section 8(b) hereof.

(viii) Release of Claims. Receipt of the severance payments and benefits
specified in this Section 3 shall be contingent on Executive’s execution of the
Release, and the lapse of any statutory period for revocation, and such Release
becoming effective in accordance with its terms within fifty-two (52) days
following Executive’s termination date. Any severance payment to which Executive
otherwise would have been entitled during such fifty-two (52) day period shall
be paid by the Company in cash and in full arrears on the fifty-third (53d) day
following Executive’s employment termination date or such later date as is
required to avoid the imposition of additional taxes under Internal Revenue
Section 409A (“Section 409A”).

4. Code Section 280G Best Results. If any payment or benefit Executive would
receive pursuant to this Agreement or otherwise, including accelerated vesting
of any equity compensation (“Payment”) would (i) constitute a “parachute
payment” within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the “Code”), and (ii) but for this sentence, be subject to

 

-4-

--------------------------------------------------------------------------------

the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such
Payment shall be reduced to the Reduced Amount. The “Reduced Amount” shall be
either (x) the largest portion of the Payment that would result in no portion of
the Payment being subject to the Excise Tax or (y) the largest portion, up to
and including the total, of the Payment, whichever amount, after taking into
account all applicable federal, state and local employment taxes, income taxes,
and the Excise Tax (all computed at the highest applicable marginal rate),
results in Executive’s receipt, on an after-tax basis, of the greater amount of
the Payment notwithstanding that all or some portion of the Payment may be
subject to the Excise Tax. If a reduction in payments or benefits constituting
“parachute payments” is necessary so that the Payment equals the Reduced Amount,
reduction shall occur in the following order: (A) cash payments shall be reduced
first and in reverse chronological order such that the cash payment owed on the
latest date following the occurrence of the event triggering such excise tax
will be the first cash payment to be reduced; (B) accelerated vesting of stock
awards shall be cancelled/reduced next and in the reverse order of the date of
grant for such stock awards (i.e., the vesting of the most recently granted
stock awards will be reduced first), with full-value awards reversed before any
stock option or stock appreciation rights are reduced; and (C) employee benefits
shall be reduced last and in reverse chronological order such that the benefit
owed on the latest date following the occurrence of the event triggering such
excise tax will be the first benefit to be reduced.

The Company shall appoint a nationally recognized accounting firm to make the
determinations required hereunder and perform the foregoing calculations. The
Company shall bear all expenses with respect to the determinations by such
accounting firm required to be made hereunder.

The accounting firm engaged to make the determinations hereunder shall provide
its calculations, together with detailed supporting documentation, to the
Company and Executive within fifteen (15) calendar days after the date on which
right to a Payment is triggered (if requested at that time by the Company or
Executive) or such other time as requested by the Company or Executive. Any good
faith determinations of the accounting firm made hereunder shall be final,
binding and conclusive upon the Company and Executive.

5. Definition of Terms. The following terms referred to in this Agreement shall
have the following meanings:

(a) Cause. “Cause” shall (i) an act of dishonesty made by Executive in
connection with Executive’s responsibilities as an employee, (ii) Executive’s
conviction of or plea of nolo contendere to, a felony or any crime involving
fraud, embezzlement or any other act of moral turpitude, (iii) Executive’s gross
misconduct, (iv) Executive’s unauthorized use or disclosure of any proprietary
information or trade secrets of the Company or any other party to whom Executive
owes an obligation of nondisclosure as a result of Executive’s relationship with
the Company; (v) Executive’s willful breach of any obligations under any written
agreement or covenant with the Company or breach of the Company’s Corporate Code
of Conduct; or (vi) Executive’s continued failure to perform Executive’s
employment duties after Executive has received a written demand of performance
from the Chief Executive Officer which specifically sets forth the factual basis
for the Chief Executive Officer’s belief that Executive has not substantially
performed Executive’s duties

 

-5-

--------------------------------------------------------------------------------

and has failed to cure such non-performance to the Chief Executive Officer’s
satisfaction within 30 days after receiving such notice.

(b) Change of Control. “Change of Control” means the occurrence of any of the
following events:

(i) A change in the ownership of the Company which occurs on the date that any
one person, or more than one person acting as a group, (“Person”) acquires
ownership of the stock of the Company that, together with the stock held by such
Person, constitutes more than 50% of the total voting power of the stock of the
Company; provided, however, that for purposes of this subsection (i), the
acquisition of additional stock by any one Person, who is considered to own more
than 50% of the total voting power of the stock of the Company will not be
considered a Change in Control; or

(ii) A change in the effective control of the Company which occurs on the date
that a majority of members of the Board is replaced during any twelve (12) month
period by Directors whose appointment or election is not endorsed by a majority
of the members of the Board prior to the date of the appointment or election.
For purposes of this clause (ii), if any Person is considered to effectively
control the Company, the acquisition of additional control of the Company by the
same Person will not be considered a Change in Control; or

(iii) A change in the ownership of a substantial portion of the Company’s assets
which occurs on the date that any Person acquires (or has acquired during the
twelve (12) month period ending on the date of the most recent acquisition by
such person or persons) assets from the Company that have a total gross fair
market value equal to or more than 50% of the total gross fair market value of
all of the assets of the Company immediately prior to such acquisition or
acquisitions; provided, however, that for purposes of this subsection (iii), the
following will not constitute a change in the ownership of a substantial portion
of the Company’s assets: (A) a transfer to an entity that is controlled by the
Company’s stockholders immediately after the transfer, or (B) a transfer of
assets by the Company to: (1) a stockholder of the Company (immediately before
the asset transfer) in exchange for or with respect to the Company’s stock,
(2) an entity, 50% or more of the total value or voting power of which is owned,
directly or indirectly, by the Company, (3) a Person, that owns, directly or
indirectly, 50% or more of the total value or voting power of all the
outstanding stock of the Company, or (4) an entity, at least 50% of the total
value or voting power of which is owned, directly or indirectly, by a Person.
For purposes of this subsection (iii), gross fair market value means the value
of the assets of the Company, or the value of the assets being disposed of,
determined without regard to any liabilities associated with such assets.

For purposes of this Section 5(b), persons will be considered to be acting as a
group if they are owners of a corporation that enters into a merger,
consolidation, purchase or acquisition of stock, or similar business transaction
with the Company.

Notwithstanding the foregoing, a transaction shall not be deemed a Change in
Control unless the transaction qualifies as a change in the ownership of the
Company, change in the effective control of the Company or a change in the
ownership of a substantial portion of the Company’s assets, each within the
meaning of Section 409A.

 

-6-

--------------------------------------------------------------------------------

(c) Disability. “Disability” means Executive (i) is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than twelve (12) months, or (ii) is, by
reason of any medically determinable physical or mental impairment which can be
expected to last for a continuous period of not less than twelve (12) months,
receiving income replacement benefits for a period of not less than three
(3) months under an accident and health plan covering Company employees.

(d) Good Reason. “Good Reason” means, without the Executive’s consent, (i) a
reduction in the Executive’s annual base salary (except pursuant to a reduction
generally applicable to senior executives of the Company), (ii) a material
diminution of Executive’s authority or responsibilities, (iii) a reduction of
Executive’s title, (iv) Executive ceasing to report directly to the Chief
Executive Officer of the Company or the entity holding all or substantially all
of the Company’s assets following a Change of Control, or (v) relocation of the
Executive to a location more than 50 miles from the Company’s San Francisco,
California main office location. In addition, upon any such voluntary
termination for Good Reason the Executive must provide written notice to the
Company of the existence of the one or more of the above conditions within 90
days of its initial existence and the Company must be provided with at least 30
days to remedy the condition.

6. Assignment. This Agreement will be binding upon and inure to the benefit of
(a) the heirs, executors and legal representatives of Executive upon Executive’s
death and (b) any successor of the Company. Any such successor of the Company
will be deemed substituted for the Company under the terms of this Agreement for
all purposes. For this purpose, “successor” means any person, firm, corporation
or other business entity which at any time, whether by purchase, merger or
other, directly or indirectly acquires all or substantially all of the assets or
business of the Company. None of the rights of Executive to receive any form of
compensation payable pursuant to this Agreement may be assigned or transferred
except by will of the laws of descent and distribution. Any other attempted
assignment, transfer, conveyance or other disposition of Executive’s right to
compensation or other benefits will be null and void.

7. Notices. All notices, requests, demands and other communications called for
under this Agreement shall be in writing and shall be deemed given (i) on the
date of delivery if delivered personally, (ii) one (1) day after being sent by a
well established commercial overnight service, or (iii) four (4) days after
being mailed by registered or certified mail, return receipt requested, prepaid
and addressed to the parties or their successor at the following addresses, or
at such other addresses as the parties may later designate in writing:

    If to the Company:

    Williams-Sonoma, Inc.

    3250 Van Ness Avenue

    San Francisco, CA 94109

    Attn: General Counsel

    If to Executive:

 

-7-

--------------------------------------------------------------------------------

At the last residential address known to the Company

8. Mediation.

(a) General. In the event of any claim or controversy between the parties which
the parties are unable to resolve themselves, including any claim arising out of
Executive’s employment or the termination of that employment, and including any
claim arising out of, connected with, or related to the formation,
interpretation, performance or breach of this Agreement, the complaining party
shall promptly send written notice to the other party identifying the matter in
dispute and the proposed remedy. Following the giving of such notice, the
parties shall meet and attempt in good faith to resolve the matter. In the event
the parties are unable to resolve the matter within 21 calendar days, the
parties shall submit the controversy to a mutually-selected mediator and attempt
in good faith to resolve the matter through mediation.

(b) Availability of Injunctive Relief. The parties agree that they shall have
the right to seek judicial relief in the form of injunctive and/or other
equitable relief under the California Arbitration Act, Code of Civil Procedure
section 1281.8(b), including but not limited to relief for threatened or actual
misappropriation of trade secrets, violation of this Agreement, the Corporate
Code of Conduct or any other agreement regarding trade secrets, confidential
information, non-competition, nonsolicitation, non-disparagement or Labor Code
§2870. In the event either party seeks injunctive relief, the prevailing party
shall be entitled to recover reasonable costs and attorneys’ fees.

(c) Administrative Relief. Executive understands that this Agreement does not
prohibit Executive from pursuing an administrative claim with a local, state or
federal administrative body such as the Department of Fair Employment and
Housing, the Equal Employment Opportunity Commission or the workers’
compensation board.

9. Section 409A.

(a) Notwithstanding anything to the contrary in this Agreement, no Deferred
Compensation Separation Benefits payable under this Agreement will be considered
due or payable until and unless Executive has a “separation from service” within
the meaning of Section 409A. Notwithstanding anything to the contrary in this
Agreement, if Executive is a “specified employee” within the meaning of
Section 409A at the time of Executive’s “separation from service” other than due
to Executive’s death, then any severance benefits payable pursuant to this
Agreement and any other severance payments or separation benefits, that in each
case when considered together may be considered deferred compensation under
Section 409A (together, the “Deferred Compensation Separation Benefits”) and are
otherwise due to Executive on or within the six (6) month period following
Executive’s “separation from service” will accrue during such six (6) month
period and will instead become payable in a lump sum payment on the date six
(6) months and one (1) day following the date of Executive’s “separation from
service.” All subsequent Deferred Compensation Separation Benefits, if any, will
be payable in accordance with the payment schedule applicable to each payment or
benefit. Each payment and benefit payable under this Agreement is intended to
constitute separate payments for purposes of Section 1.409A-2(b)(2) of the
Treasury Regulations.

 

-8-

--------------------------------------------------------------------------------

(b) Notwithstanding anything to the contrary in this Agreement, if Executive
dies following Executive’s “separation from service” but prior to the six
(6) month anniversary of the date of Executive’s “separation from service,” then
any Deferred Compensation Separation Benefits delayed in accordance with this
Section will be payable in a lump sum as soon as administratively practicable
after the date of Executive’s death, but not later than ninety (90) days after
the date of Executive’s death, and all other Deferred Compensation Separation
Benefits will be payable in accordance with the payment schedule applicable to
each payment or benefit.

(c) It is the intent of this Agreement to comply with the requirements of
Section 409A so that none of the severance payments and benefits to be provided
under this Agreement will be subject to the additional tax imposed under
Section 409A, and any ambiguities in this Agreement will be interpreted to so
comply. The Company and Executive agree to work together in good faith to
consider amendments to this Agreement and to take such reasonable actions which
are necessary, appropriate or desirable to avoid imposition of any additional
tax or income recognition under Section 409A prior to actual payment to
Executive.

10. Miscellaneous Provisions.

(a) Waiver. No provision of this Agreement shall be modified, waived or
discharged unless the modification, waiver or discharge is agreed to in writing
and signed by the Executive and by an authorized officer of the Company (other
than the Executive). No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by the other party
shall be considered a waiver of any other condition or provision or of the same
condition or provision at another time.

(b) Headings. All captions and section headings used in this Agreement are for
convenient reference only and do not form a part of this Agreement.

(c) Entire Agreement. This Agreement, and other written agreements relating to
the subject matter hereof between Executive and a duly authorized Company
officer constitute the entire agreement of the parties hereto and supersede in
their entirety all prior representations, understandings, undertakings or
agreements (whether oral or written and whether expressed or implied) of the
parties with respect to the subject matter hereof.

(d) Choice of Law. This Agreement will be governed by the laws of the State of
California (with the exception of its conflict of laws provisions).

(e) Severability. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision hereof, which shall remain in full force and effect.

(f) Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together will constitute one and
the same instrument.

 

-9-

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties have executed this Management Retention
Agreement on the respective dates set forth below.

 

        Williams-Sonoma, Inc. Dated:             , 20         By  

 

                                                 , an individual Dated:
            , 20        

 

 

-10-

--------------------------------------------------------------------------------

EXHIBIT A

WILLIAMS-SONOMA, INC.

RELEASE OF CLAIMS

This Release of Claims (“Agreement”) is made by and between Williams-Sonoma,
Inc. (the “Company”) and                      (“Executive”).

WHEREAS, Executive has agreed to enter into a release of claims in favor of the
Company upon certain events specified in the management retention agreement by
and between Company and Executive (the “Management Retention Agreement”).

NOW THEREFORE, in consideration of the mutual promises made in this Agreement,
the parties hereby agree as follows:

1. Termination. Executive’s employment from the Company terminated on
                     (the “Termination Date”).

2. Confidential Information. Executive shall continue to maintain the
confidentiality of all confidential and proprietary information of the Company
and shall continue to comply with the terms and conditions of the Company’s Code
of Corporate Conduct. Executive shall return all the Company property and
confidential and proprietary information in Executive’s possession to the
Company on the Effective Date of this Agreement.

3. Payment of Salary. Executive acknowledges and represents that the Company has
paid all salary, wages, bonuses, accrued vacation, commissions and any and all
other benefits due to Executive.

4. Release of Claims. Executive agrees that the foregoing consideration
represents settlement in full of all outstanding obligations owed to Executive
by the Company. Executive, on behalf of Executive, and Executive’s respective
heirs, family members, executors and assigns, hereby fully and forever releases
the Company and its past, present and future officers, agents, directors,
employees, investors, shareholders, administrators, affiliates, divisions,
subsidiaries, parents, predecessor and successor corporations, and assigns,
from, and agrees not to sue or otherwise institute or cause to be instituted any
legal or administrative proceedings concerning any claim, duty, obligation or
cause of action relating to any matters of any kind, whether presently known or
unknown, suspected or unsuspected, that Executive may possess arising from any
omissions, acts or facts that have occurred up until and including the Effective
Date of this Agreement including, without limitation,

(a) any and all claims relating to or arising from Executive’s employment
relationship with the Company and the termination of that relationship;

(b) any and all claims relating to, or arising from, Executive’s right to
purchase, or actual purchase of shares of stock of the Company, including,
without limitation, any claims for fraud, misrepresentation, breach of fiduciary
duty, breach of duty under applicable state corporate law, and securities fraud
under any state or federal law;

(c) any and all claims for wrongful discharge of employment; termination in
violation of public policy; discrimination; breach of contract, both express and
implied; breach of a covenant of good faith and fair dealing, both express and
implied; promissory estoppel; negligent or intentional infliction of emotional
distress; negligent or intentional misrepresentation; negligent or

 

-11-

--------------------------------------------------------------------------------

intentional interference with contract or prospective economic advantage; unfair
business practices; defamation; libel; slander; negligence; personal injury;
assault; battery; invasion of privacy; false imprisonment; and conversion;

(d) any and all claims for violation of any federal, state or municipal statute,
including, but not limited to, Title VII of the Civil Rights Act of 1964, the
Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the
Americans with Disabilities Act of 1990, the Fair Labor Standards Act, the
Employee Retirement Income Security Act of 1974, The Worker Adjustment and
Retraining Notification Act, the California Fair Employment and Housing Act, and
Labor Code section 201, et seq. and section 970, et seq. and all amendments to
each such Act as well as the regulations issued under each such Act;

(e) any and all claims for violation of the federal, or any state, constitution;

(f) any and all claims arising out of any other laws and regulations relating to
employment or employment discrimination; and

(g) any and all claims for attorneys’ fees and costs.

Executive agrees that the release set forth in this section shall be and remain
in effect in all respects as a complete general release as to the matters
released. This release does not extend to any severance obligations due
Executive under the Management Retention Agreement. Nothing in this Agreement
waives Executive’s rights to indemnification or any payments under any fiduciary
insurance policy, if any, provided by any act or agreement of the Company, state
or federal law or policy of insurance.

5. Acknowledgment of Waiver of Claims under ADEA. Executive acknowledges that
Executive is waiving and releasing any rights Executive may have under the Age
Discrimination in Employment Act of 1967 (“ADEA”) and that this waiver and
release is knowing and voluntary. Executive and the Company agree that this
waiver and release does not apply to any rights or claims that may arise under
the ADEA after the Effective Date of this Agreement. Executive acknowledges that
the consideration given for this waiver and release Agreement is in addition to
anything of value to which Executive was already entitled. Executive further
acknowledges that Executive has been advised by this writing that (a) Executive
should consult with an attorney prior to executing this Agreement; (b) Executive
has at least twenty-one (21) days within which to consider this Agreement;
(c) Executive has seven (7) days following the execution of this Agreement by
the parties to revoke the Agreement; (d) this Agreement shall not be effective
until the revocation period has expired; and (e) nothing in this Agreement
prevents or precludes Executive from challenging or seeking a determination in
good faith of the validity of this waiver under the ADEA, nor does it impose any
condition precedent, penalties or costs for doing so, unless specifically
authorized by federal law. Any revocation should be in writing and delivered to
the Vice-President of Human Resources at the Company by close of business on the
seventh day from the date that Executive signs this Agreement.

6. Civil Code Section 1542. Executive represents that Executive is not aware of
any claims against the Company other than the claims that are released by this
Agreement. Executive

 

-12-

--------------------------------------------------------------------------------

acknowledges that Executive has been advised by legal counsel and is familiar
with the provisions of California Civil Code 1542, below, which provides as
follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

Executive, being aware of said code section, agrees to expressly waive any
rights Executive may have under such code section, as well as under any statute
or common law principles of similar effect.

7. No Pending or Future Lawsuits. Executive represents that he or Executive has
no lawsuits, claims, or actions pending in Executive’s name, or on behalf of any
other person or entity, against the Company or any other person or entity
referred to in this Agreement. Executive also represents that he or Executive
does not intend to bring any claims on Executive’s own behalf or on behalf of
any other person or entity against the Company or any other person or entity
referred to herein.

8. Application for Employment. Executive understands and agrees that, as a
condition of this Agreement, Executive shall not be entitled to any employment
with the Company, its subsidiaries, or any successor, and Executive hereby
waives any right, or alleged right, of employment or re-employment with the
Company.

9. No Cooperation. Executive agrees that Executive will not counsel or assist
any attorneys or their clients in the presentation or prosecution of any
disputes, differences, grievances, claims, charges, or complaints by any third
party against the Company and/or any officer, director, employee, agent,
representative, shareholder or attorney of the Company, unless under a subpoena
or other court order to do so.

10. No Admission of Liability. Executive understands and acknowledges that this
Agreement constitutes a compromise and settlement of disputed claims. No action
taken by the Company, either previously or in connection with this Agreement
shall be deemed or construed to be (a) an admission of the truth or falsity of
any claims heretofore made or (b) an acknowledgment or admission by the Company
of any fault or liability whatsoever to the Executive or to any third party.

11. Costs. The parties shall each bear their own costs, expert fees, attorneys’
fees and other fees incurred in connection with this Agreement.

12. Authority. Executive represents and warrants that Executive has the capacity
to act on Executive’s own behalf and on behalf of all who might claim through
Executive to bind them to the terms and conditions of this Agreement.

13. No Representations. Executive represents that Executive has had the
opportunity to consult with an attorney, and has carefully read and understands
the scope and effect of the

 

-13-

--------------------------------------------------------------------------------

provisions of this Agreement. Neither party has relied upon any representations
or statements made by the other party which are not specifically set forth in
this Agreement.

14. Severability. In the event that any provision hereof becomes or is declared
by a court of competent jurisdiction to be illegal, unenforceable or void, this
Agreement shall continue in full force and effect without said provision.

15. Entire Agreement. This Agreement, along with the Code of Corporate Conduct
and Executive’s written equity compensation agreements with the Company,
represents the entire agreement and understanding between the Company and
Executive concerning Executive’s separation from the Company.

16. No Oral Modification. This Agreement may only be amended in writing signed
by Executive and the Chairman of the Board of Directors of the Company.

17. Governing Law. This Agreement shall be governed by the internal substantive
laws, but not the choice of law rules, of the State of California.

18. Effective Date. This Agreement is effective eight (8) days after it has been
signed by both parties.

19. Counterparts. This Agreement may be executed in counterparts, and each
counterpart shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the
undersigned.

20. Voluntary Execution of Agreement. This Agreement is executed voluntarily and
without any duress or undue influence on the part or behalf of the parties to
this Agreement, with the full intent of releasing all claims. The parties
acknowledge that:

(a) They have read this Agreement;

(b) They have been represented in the preparation, negotiation, and execution of
this Agreement by legal counsel of their own choice or that they have
voluntarily declined to seek such counsel;

(c) They understand the terms and consequences of this Agreement and of the
releases it contains;

(d) They are fully aware of the legal and binding effect of this Agreement.

 

-14-

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties have executed this Agreement on the respective
dates set forth below.

 

    Williams-Sonoma, Inc. Dated:             , 20         By  

 

                                                 , an individual Dated:
            , 20        

 

 

-15-