RH (OTCMKTS:BLNKF) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Item5.02.

OnMay2, 2017,the board of directors ofRH grantedGary Friedman,
theChairman and Chief Executive Officerof RH, anoption to
purchase 1,000,000 shares of RHs common stock, with an exercise
price equal to $50per share.

The option contains dual condition restrictions consisting of
both time based service restrictions over four years and
performance based restrictions linked to achieving RH common
stock price objectives of $100, $125 and $150 per share.

Time Based Restrictions.

The time based restrictions are measured over an initial four
year service period from the date of the award and these
restrictions will lapse at the end of each of these first four
years at a rate of 250,000 shares per year if (i) Mr. Friedman
remains employed at the end of such year, and (ii) the stock
price goals have been achieved in such year as described further
below.

Performance Based Restrictions.

The stock price objectives are measured each year and are set at
prices for RH common stock of $100, $125 and $150 per share. If
all three stock price objectives are met in the first performance
year, restrictions will lapse as to 250,000 shares in aggregate
at the end of such year, with 83,333 shares tied to a $100 price
per share, 83,333 shares tied to a $125 price per share and
83,334 shares tied to a $150 price per share.

The same price performance tests are applied in the second year
of performance such that restrictions will lapse for an
additional 250,000 shares at the end of the second year and then
again as to an additional 250,000 shares at the end of each of
the third and fourth years so long as Mr. Friedman remains
employed at the end of each year.

To the extent that any of the price performance objectives is not
reached within one of these first four performance years, that
price objective can be achieved in any subsequent year until the
8th anniversary of the date of grant.

The performance targets represent a substantial premium to the
$48.62 per share market price for RH common stock on the date of
the award. The stock price will need to more than double from the
grant date price in order to reach the first price performance
objective and more than triple to reach the highest price
performance objective.

The option is intended to be a multi-year equity compensation
award covering a four year time period and is the first equity
award since the 2013 multi-year award to Mr. Friedman that was
granted in the second fiscal quarter of 2013.

The option is exercisable on the date of grant but the shares
underlying the option remain subject to transfer restrictions to
the extent the performance based and time based requirements have
not been met. The option will result in a one-time non-cash stock
compensation charge in RHs second quarter in an amount estimated
to be between $20 million and $25 million.

The price performance and time-based restrictions are set forth
in greater detail in the Notice of Stock Option Award and Stock
Option Award Agreement. The foregoing summary of the terms of the
option is qualified in its entirety by reference to the Notice of
Stock Option Award and Stock Option Award Agreement, a copy of
which is attached as Exhibit 10.1 hereto and is incorporated
herein by reference.

Forward-Looking Statements

This Current Report on Form 8-K contains forward-looking
statements within the meaning of the federal securities laws,
including, without limitation, statements relating to the
Companys estimate of the amount of the one-time non-cash stock
compensation charge in the second quarter of fiscal 2017 for the
stock option granted to Mr.Friedman and statements relating to
the price performance restrictions contained in the stock option
agreement. The actual amount of the non-cash compensation charge
could differ materially from the estimate set forth in this Form
8-K and there can be no assurance that the Company will achieve
the price performance objectives or that if such prices are
achieved that they will be sustained in future periods. You can
identify forward looking statements by the fact that they do not
relate strictly to historical or current facts. These statements
may include words such as anticipate, estimate, expect, project,
plan, intend, believe, may, will, should, likely and other words
and terms of similar meaning in connection with any discussion of
the timing or nature of future events. We cannot assure you that
future developments affecting us will be those that we have
anticipated. Important risks and uncertainties that could cause
actual results to differ materially from our expectations
include, among others, those risks and uncertainties disclosed
under the sections entitled Risk Factors and Managements
Discussion and Analysis of Financial Condition and Results of
Operations in RHs Annual Report on Form 10-K most recently filed
with the Securities and Exchange Commission, and similar
disclosures in subsequent reports filed with the SEC, which are
available on our investor relations website at
ir.restorationhardware.com and on the SEC website at www.sec.gov.
You should not place undue reliance on these forward-looking
statements. Any forward-looking statement made by us on this
Current Report on Form 8-K speaks only as of the date
on which we make it. RH expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to such
statements to reflect any change in its expectations with regard
thereto or any changes in the events, conditions or circumstances
on which any such statement is based.