UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

    3250 Van Ness Avenue, San Francisco, California 94109    

(Address of principal executive offices)

Registrant’s telephone number, including area code                    (415) 421-7900                                  

                                                     N/A                                                     

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(e)

Laura Alber Employment Agreement

In connection with Ms. Alber’s appointment as President and Chief Executive Officer of Williams-Sonoma, Inc. (the “Company”), on June 11, 2010, the Company entered into an employment agreement (the “Employment Agreement”) with Ms. Alber. The Employment Agreement is effective as of May 26, 2010. The Employment Agreement has an initial three-year term and will be automatically extended for one year following the initial term unless either party provides notice of non-extension.

The Employment Agreement provides Ms. Alber with an annual base salary of $975,000 (the “Base Salary”). Ms. Alber will remain eligible to participate in the Company’s 2001 Incentive Bonus Plan and the employee benefit plans offered to the Company’s senior executives. Ms. Alber also will remain eligible to receive equity compensation awards as the Compensation Committee of Company’s Board of Directors deems appropriate.

Under the Employment Agreement, in the event Ms. Alber’s employment is terminated by the Company without cause, Ms. Alber voluntarily resigns for good reason, or Ms. Alber’s employment is terminated due to her death or disability, as such terms are defined in the Employment Agreement (each, an “EA Triggering Termination”), Ms. Alber will be entitled to receive the following:

If Ms. Alber’s employment is terminated due to her death or disability, the severance payments that are based on base salary and bonus amounts will be reduced by the amount of any payments Ms. Alber receives through Company-paid insurance policies.

Ms. Alber’s receipt of the severance benefits discussed above is contingent on Ms. Alber signing and not revoking a release of claims against the Company, her continued compliance with the Company’s Corporate Code of Conduct (including its provisions relating to confidential information and non-solicitation), Ms. Alber not accepting employment with a competitor of the Company, and her continued non-disparagement of the Company.

The foregoing description is qualified in its entirety by reference to the Employment Agreement, which is attached as Exhibit 10.1 hereto and incorporated herein by reference.

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Management Retention Agreement

On June 11, 2010, the Company entered into a Management Retention Agreement (the “Retention Agreement”) with each of Ms. Alber and Sharon McCollam (each an “Executive” and collectively, the “Executives”). Each Retention Agreement has an initial two-year term and will be automatically extended for one year following the initial term unless either party provides notice of non-extension. If the Company enters into a definitive agreement with a third party providing for a change of control of the Company (as such term is defined in the Retention Agreements), each Retention Agreement will be automatically extended for 18 months following the change of control.

Under each Retention Agreement, if within 18 months following the change of control, the Executive’s employment with the Company is terminated involuntarily by the Company without cause, or voluntarily by the Executive for good reason, as such terms are defined in the Retention Agreement (each, a “Triggering Termination”), the Executive will be entitled to receive the following:

The Executive’s receipt of the severance benefits discussed above is contingent on the Executive signing and not revoking a release of claims against the Company, the Executive’s continued compliance with the Company’s Corporate Code of Conduct (including its provisions relating to confidential information and non-solicitation), the Executive not accepting employment with a competitor of the Company and the Executive’s continued non-disparagement of the Company.

In the event that the severance payments and other benefits payable to the Executive under the Retention Agreement constitute a “parachute payment” under Section 280G of the U.S. tax code and would be subject to the applicable excise tax, then the Executive’s severance payments and other benefits will be either (i) delivered in full or (ii) delivered to a lesser extent such that no portion of the benefits are subject to the excise tax, whichever results in the receipt by the Executive on an after-tax basis of the greatest amount of benefits.

The foregoing description is qualified in its entirety by reference to the Retention Agreements, which are attached as Exhibits 10.2 and 10.3 hereto and incorporated herein by reference.

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Item 9.01. Financial Statements and Exhibits

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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INDEX TO EXHIBITS