RH 10-K

ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended). Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and include controls and procedures designed to ensure that the information required to be disclosed by us in such reports is accumulated and communicated to our senior leadership team, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Our senior leadership team, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this annual report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective as of January 28, 2023 as a result of the material weakness in our internal control over financial reporting described below that was identified in connection with the matter that caused the Restatement (defined below). Management’s Report on Internal Control over Financial Reporting Our senior leadership team is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f). Our senior leadership team conducted an assessment of our internal control over financial reporting as of January 28, 2023 based on the framework established by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013). Based on the assessment, our senior leadership team concluded that our internal control over financial reporting was not effective as of January 28, 2023 due to the existence of a material weakness. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. As previously disclosed in our Quarterly Reports on Form 10-Q/A for the fiscal periods ended April 30, 2022, July 30, 2022, and October 29, 2022, we identified the following material weakness: We did not design and maintain an effective control activity over the presentation and disclosure of net income per share, specifically the application of authoritative guidance, including new accounting standards, to the net income per share computations. This material weakness resulted in errors in the unaudited condensed consolidated financial statements for the fiscal periods ended April 30, 2022, July 30, 2022 and October 29, 2022 that were restated on Form 10-Q/A (the “Restatement”). Additionally, this material weakness could result in misstatements of the related accounts or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected. The effectiveness of our internal control over financial reporting as of January 28, 2023 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein. Plan for Remediation of Material Weakness in Internal Control Over Financial Reporting Our senior leadership team is committed to remediating the material weakness in our internal control over financial reporting in a timely manner and with oversight from the Audit Committee. We have, among other actions, implemented a remediation plan to address the root cause of the material weakness in order to fully remediate the material weakness. In conjunction with this remediation plan, during our fiscal quarter ended January 28, 2023, we designed and implemented an enhanced control activity related to the presentation and disclosure of net income per share, including the application of authoritative guidance and new accounting standards, to the net income per share computations. ​ ​ ​ 118 | FORM 10-K PART II — FINANCIAL STATEMENTS ​ Table of Contents While we believe the above remediation plan will address and remediate the material weakness, and we have enhanced our controls related to the net income per share computations, the material weakness will not be considered remediated until there has been appropriate time for us to conclude through testing that the controls are designed and operating effectively. Such remediation is anticipated to be completed in the first half of fiscal 2023. Changes in Internal Control Over Financial Reporting There were no changes in our internal control over financial reporting, other than an enhanced control activity to address the material weakness identified above, that occurred during our fiscal quarter ended January 28, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION On March 24, 2023, we implemented a restructuring that includes workforce and expense reductions in order to improve and simplify our organizational structure, streamline certain aspects of our business operations and better position us for further growth. As a result of the workforce reduction associated with the initiative, which affected approximately 440 roles, we expect to incur certain charges. The reorganization and accompanying workforce reduction includes the elimination of numerous leadership and other positions throughout the organization. We are currently unable to make a good faith determination of an estimate of the total amount or range of future amounts for each major type of cost expected to be incurred in connection with the reorganization, an estimate of the total amount or range of future amounts expected to be incurred in connection with the reorganization, or an estimate of the total amount or range of future amounts of the charges that will result in future cash expenditures. We will provide additional information in a subsequent filing after we determine the costs and charges associated with this business reorganization. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. ​ ​ ​ ​ PART II — FINANCIAL STATEMENTS FORM 10-K | 119 ​ Table of Contents PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by this item will be contained in our definitive Proxy Statement for the 2023 Annual Meeting of Stockholders (the “Proxy Statement”) and is incorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATION The information required by this item will be contained in our Proxy Statement and is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by this item will be contained in our Proxy Statement and is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE The information required by this item will be contained in our Proxy Statement and is incorporated herein by reference. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this item will be contained in our Proxy Statement and is incorporated herein by reference. ​ ​ ​ ​ ​ ​ ​ 120 | FORM 10-K PART III ​ Table of Contents PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) The following documents are filed as part of this Annual Report on Form 10-K: 1. Consolidated Financial Statements The following financial statements are included in Part II, Item 8 of this Annual Report on Form 10-K: Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements Consolidated Balance Sheets as of January 28, 2023 and January 29, 2022 Consolidated Statements of Income for the fiscal years ended January 28, 2023, January 29, 2022 and January 30, 2021 Consolidated Statements of Comprehensive Income for the fiscal years ended January 28, 2023, January 29, 2022 and January 30, 2021 Consolidated Statements of Stockholders’ Equity for the fiscal years ended January 28, 2023, January 29, 2022 and January 30, 2021 Consolidated Statements of Cash Flows for the fiscal years ended January 28, 2023, January 29, 2022 and January 30, 2021 Notes to the Consolidated Financial Statements 2. Financial Statement Schedules Separate financial statement schedules have been omitted either because they are not applicable or because the required information is included in the consolidated financial statements or notes described in Item 15(a)(1) above. 3. Exhibits The Exhibits listed in the Index to Exhibits, which appears immediately before the signature page and is incorporated herein by reference, are filed or incorporated by reference as part of this Annual Report on Form 10-K. ITEM 16. FORM 10-K SUMMARY The Company has elected not to include summary information. ​ ​ ​ ​ ​ ​ PART IV FORM 10-K | 121 ​ Table of Contents EXHIBIT INDEX ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ INCORPORATED BY REFERENCE ​ ​ ​ ​ EXHIBIT NUMBER EXHIBIT DESCRIPTION FORM FILE NUMBER DATE OF FIRST FILING EXHIBIT NUMBER FILED HEREWITH 3.1 ​ Restated Certificate of Incorporation of RH. ​ 10-K ​ 001-35720 ​ March 29, 2017 ​ 3.1 ​ ​ 3.2 ​ Amended and Restated Bylaws of RH. ​ 8-K ​ 001-35720 ​ March 3, 2017 ​ 3.1 ​ ​ 4.1 ​ Description of Securities of Registrant. ​ 10-K ​ 001-35720 ​ March 30, 2020 ​ 4.1 ​ ​ 4.2 ​ Form of RH Common Stock Certificate. ​ 10-K ​ 001-35720 ​ March 29, 2017 ​ 4.1 ​ ​ 4.3 ​ Indenture dated June 18, 2018, between RH and U.S. Bank National Association, as Trustee, including form of 0.00% Convertible Senior Note due 2023 . ​ 8-K ​ 001-35720 ​ June 19, 2018 ​ 4.1 ​ ​ 4.4 ​ First Supplemental Indenture dated as of August 31, 2018, between RH and U.S. Bank National Association, as Trustee, relating to the 0.00% Convertible Senior Note due 2023. ​ 10-Q ​ 001-35720 ​ September 5, 2018 ​ 4.2 ​ ​ 4.5 ​ Indenture dated September 17, 2019, between RH and U.S. Bank National Association, as Trustee, including form of 0.00% Convertible Senior Note due 2024. ​ 8-K ​ 001-35720 ​ September 18, 2019 ​ 4.1 ​ ​ 10.1 ​ Form of Indemnification Agreement entered into by and between Restoration Hardware Holdings, Inc. and each of its directors. ​ S-1/A ​ 333-176767 ​ October 23, 2012 ​ 10.4 ​ ​ 10.2* ​ Executive Employment Agreement, dated as of July 2, 2013, by and between Restoration Hardware, Inc. and Gary Friedman. ​ 8-K ​ 001-35720 ​ July 3, 2013 ​ 10.1 ​ ​ 10.3* ​ 2012 Equity Replacement Plan and related documents. ​ S-8 ​ 333-184716 ​ November 2, 2012 ​ 4.2 ​ ​ 10.4* ​ 2012 Stock Incentive Plan and related documents. ​ S-8 ​ 333-184716 ​ November 2, 2012 ​ 4.3 ​ ​ 10.5* ​ 2012 Stock Option Plan and related documents. ​ S-8 ​ 333-184716 ​ November 2, 2012 ​ 4.4 ​ ​ 10.6* ​ Form of 2012 Stock Incentive Plan and 2012 Stock Option Plan related documents, as amended and restated. ​ 10-Q ​ 001-35720 ​ December 17, 2013 ​ 10.2 ​ ​ 10.7* ​ Form of Notice of Restricted Stock Unit Award and Restricted Stock Unit Agreement under 2012 Stock Incentive Plan. ​ 10-K ​ 001-35720 ​ March 31, 2014 ​ 10.17 ​ ​ 10.8* ​ Notice of Stock Option Award and Stock Option Award Agreement by and between RH and Gary Friedman. ​ 8-K ​ 001-35720 ​ May 3, 2017 ​ 10.1 ​ ​ 10.9* ​ Cash Incentive Bonus Plan. ​ 10-Q ​ 001-35720 ​ September 9, 2017 ​ 10.2 ​ ​ 10.10* ​ Form of Compensation Protection Agreement for Section 16 Presidents. ​ 10-K ​ 001-35720 ​ March 29, 2018 ​ 10.11 ​ ​ 10.11 ​ Amended and Restated Aircraft Time Sharing Agreement entered into on March 29, 2016 by and between Restoration Hardware, Inc. and Gary G. Friedman. ​ 10-K ​ 001-35720 ​ March 30, 2016 ​ 10.13 ​ ​ ​ ​ ​ 122 | FORM 10-K EXHIBIT INDEX ​ Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ INCORPORATED BY REFERENCE ​ ​ ​ ​ EXHIBIT NUMBER EXHIBIT DESCRIPTION FORM FILE NUMBER DATE OF FIRST FILING EXHIBIT NUMBER FILED HEREWITH 10.12 ​ Credit Agreement, dated as of July 7, 2017, among Restoration Hardware, Inc., as lead borrower, various other subsidiaries of RH named therein as borrowers, the guarantors party thereto, the lenders party thereto and Wilmington Trust, National Association as administrative agent and collateral agent. ​ 8-K ​ 001-35720 ​ July 13, 2017 ​ 10.1 ​ ​ 10.13 ​ Credit Agreement, dated as of April 9, 2019 and effective as of April 10, 2019, among Restoration Hardware, Inc., as lead borrower, various other subsidiaries of RH named therein as borrowers, the guarantors party thereto, the lenders party thereto and BSP Agency, LLC, as administrative agent and collateral agent. ​ 8-K ​ 001-35720 ​ April 16, 2019 ​ 10.1 ​ ​ 10.14 ​ Intercreditor Agreement, dated as of April 9, 2019 and effective as of April 10, 2019, among Restoration Hardware, Inc., Bank of America, N.A. and BSP Agency, LLC. ​ 8-K ​ 001-35720 ​ April 16, 2019 ​ 10.2 ​ ​ 10.15 ​ Twelfth Amended and Restated Credit Agreement, dated as of July 29, 2021, by and among Restoration Hardware, Inc., as lead borrower, various other subsidiaries of RH named therein as borrowers, the guarantors party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent . ​ 8-K ​ 001-35720 ​ July 30, 2021 ​ 10.1 ​ ​ 10.16 ​ Term Loan Credit Agreement dated as of October 20, 2021, by and among Restoration Hardware, Inc. as the borrower, the lenders party thereto and Bank of America, N.A. as administrative agent and collateral agent. ​ 8-K ​ 001-35720 ​ October 25, 2021 ​ 10.1 ​ ​ 10.17 ​ Notice of Stock Option Award and Stock Option Award Agreement by and between RH and Gary Friedman dated as of October 18, 2020. ​ 8-K ​ 001-35720 ​ October 21, 2020 ​ 10.1 ​ ​ 10.18 ​ Form of Partial Warrant Termination Agreement by and between RH and the applicable Hedge Counterparty ​ 8-K ​ 001-35720 ​ April 13, 2022 ​ 10.1 ​ ​ 10.19 ​ Form of Partial Warrant Termination Agreement by and between RH and the applicable Hedge Counterparty ​ 8-K ​ 001-35720 ​ April 13, 2022 ​ 10.2 ​ ​ 10.20 ​ Form of Remaining Warrant Termination Agreement by and between RH and the applicable Hedge Counterparty. ​ 8-K ​ 001-35720 ​ April 18, 2022 ​ 10.1 ​ ​ 10.21 ​ Form of Bond Hedge Termination Agreement by and between RH and the applicable Hedge Counterparty. ​ 8-K ​ 001-35720 ​ April 18, 2022 ​ 10.2 ​ ​ 10.22 ​ Term Loan Credit Agreement dated as of October 20, 2021, as amended by the 2022 Incremental Amendment, dated as of May 13, 2022, by and among Restoration Hardware, Inc. as the borrower, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent. ​ 8-K ​ 001-35720 ​ May 17, 2022 ​ 10.2 ​ ​ ​ ​ ​ EXHIBIT INDEX FORM 10-K | 123 ​ Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ INCORPORATED BY REFERENCE ​ ​ ​ ​ EXHIBIT NUMBER EXHIBIT DESCRIPTION FORM FILE NUMBER DATE OF FIRST FILING EXHIBIT NUMBER FILED HEREWITH 21.1 ​ Subsidiary List ​ — ​ — ​ — ​ — ​ X 23.1 ​ Consent of PricewaterhouseCoopers LLP ​ — ​ — ​ — ​ — ​ X 24.1 ​ Power of Attorney (included on signature page) ​ — ​ — ​ — ​ — ​ X 31.1 ​ Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended. ​ — ​ — ​ — ​ — ​ X 31.2 ​ Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended. ​ — ​ — ​ — ​ — ​ X 32.1 ​ Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ​ — ​ — ​ — ​ — ​ X 32.2 ​ Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ​ — ​ — ​ — ​ — ​ X 101.INS ​ XBRL Instance Document––the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. ​ — ​ — ​ — ​ — ​ X 101.SCH ​ Inline XBRL Taxonomy Extension Schema Document ​ — ​ — ​ — ​ — ​ X 101.CAL ​ Inline XBRL Taxonomy Extension Calculation Linkbase Document ​ — ​ — ​ — ​ — ​ X 101.DEF ​ Inline XBRL Extension Definition ​ — ​ — ​ — ​ — ​ X 101.LAB ​ Inline XBRL Taxonomy Extension Label Linkbase Document ​ — ​ — ​ — ​ — ​ X 101.PRE ​ Inline XBRL Taxonomy Extension Presentation Linkbase Document ​ — ​ — ​ — ​ — ​ X 104 ​ Cover Page Interactive Data File––the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. ​ — ​ — ​ — ​ — ​ X * Indicates management contract or compensatory plan or arrangement. ​ ​ ​ ​ ​ ​ ​ 124 | FORM 10-K EXHIBIT INDEX ​ Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ​ ​ ​ ​ RH ​ ​ ​ By: /s/ Gary Friedman ​ ​ Gary Friedman ​ ​ Chairman of the Board of Directors and Chief Executive Officer ​ ​ ​ ​ ​ ​ Date: March 29, 2023 ​ ​ ​ POWER OF ATTORNEY Know all persons by these presents, that each person whose signature appears below constitutes and appoints Gary Friedman and Jack Preston, and each of them, as such person’s true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for such person and in such person’s name, place and stead, in any and all capacities, to sign any and all amendments to this annual report on Form 10-K, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto each said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as such person might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them or their or such person’s substitute or substitutes, may lawfully do or cause to be done by virtue thereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities on March 29 th , 2023. ​ ​ ​ /s/ Gary Friedman /s/ Jack Preston Gary Friedman ​ Jack Preston Chairman of the Board of Directors and Chief Executive Officer ​ Chief Financial Officer (Principal Financial Officer) (Principal Executive Officer) ​ ​ ​ ​ ​ /s/ Christina Hargarten ​ /s/ Carlos Alberini Christina Hargarten ​ Carlos Alberini Chief Accounting Officer (Principal Accounting Officer) ​ Director ​ ​ ​ /s/ Keith Belling ​ /s/ Eri Chaya Keith Belling ​ Eri Chaya Director ​ Director ​ ​ ​ /s/ Mark Demilio ​ /s/ Hilary Krane Mark Demilio ​ Hilary Krane Director ​ Director ​ ​ ​ /s/ Katie Mitic ​ /s/ Ali Rowghani Katie Mitic ​ Ali Rowghani Director ​ Director ​ ​ ​ /s/ Leonard Schlesinger ​ ​ Leonard Schlesinger ​ ​ Director ​ ​ ​ ​ ​ ​ ​ SIGNATURES FORM 10-K | 125 ​