Related Party Transactions and Outside Related Director Information

Restoration Hardware, Inc. (RSTO)

5/30/2006 Proxy Information

Series A Preferred Stock

In July 2005, the remaining holders of our Series A preferred stock converted their shares of Series A preferred stock into common stock. In connection with such conversion, these stockholders agreed pursuant to a letter agreement dated as of July 30, 2005, to waive certain information and inspection rights provided in the amended and restated investor rights agreement by and among our company and such stockholders. At such time, the remaining holders of Series A preferred stock included Mr. and Ms. Friedman, Mr. Krevlin, and certain entities controlled by Mr. Krevlin.

Loan to Officer

Jason Camp, who is a Senior Vice President and who is the son of our director Robert E. Camp, was asked to relocate to California in 2001 as part of his job functions as then Vice President of Stores. In connection with this relocation, we made a loan to him in the principal amount of $200,000 in connection with his purchase of a house. The loan is a full recourse loan. The interest on the outstanding principal amount of the loan is 8.0% per annum, compounded annually, and the entire amount of interest and all outstanding principal is due and payable on August 15, 2006, if not earlier pre-paid in full with interest or otherwise forgiven. The amount outstanding under the loan amount was $274,667 as of May 1, 2006.

Other Related Party Transactions

Jason Camp, who is a Senior Vice President of our company and who is the son of our director Robert E. Camp, received annual compensation (salary and bonus) from us during the fiscal year ended January 28, 2006, in the aggregate amount of $292,385 and he also received from us a car allowance during such fiscal year in the amount of $7,200. During fiscal year ended January 28, 2006, our compensation committee granted, effective May 19, 2005, a stock option under our 1998 stock incentive plan to purchase up to an additional 25,000 shares of our common stock at an exercise price of $6.10 per share, vesting in equal annual installments upon Mr. CampÕs completion of each of four years of service with us from the grant date of the stock option.