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Exhibit
4.4(b)
STOCKHOLDERS’
AGREEMENT
STOCKHOLDERS’ AGREEMENT
(this “ Agreement ”), dated as of October 17,
1997, among J. Crew Group, Inc. (the “ Company
”), TPG Partners II, L.P. (the “ Majority
Stockholder ”) and Emily Woods (the “
Stockholder ”).
WHEREAS, the Stockholder is a
party to the Recapitalization Agreement by and among the
stockholders of the Company, the Company and the Majority
Stockholder, dated July 22, 1997, as amended (the recapitalization
to be effected thereby, the “ Recapitalization
”) and, immediately following the Recapitalization, the
Stockholder will own shares of common stock of the Company, $.0l
par value per share (“ Common Stock ”)
representing approximately 14.58% of the outstanding shares of
Common Stock immediately following the Recapitalization;
WHEREAS, the Stockholder is
also an employee of the Company and J. Crew Operating Corp., a
wholly-owned subsidiary of the Company (the “
Subsidiary ”), and in such capacity is on the date
hereof being, and may in the future be, granted certain options
(the “ Options ”) to purchase shares of Common
Stock and shares of Series A Cumulative Preferred Stock, $.0l par
value, of the Company (“ Series A Preferred Stock
”) and Series B Cumulative Preferred Stock, $.0l par value,
of the Company (“ Series B Preferred Stock ”
and, together with the Series A Preferred Stock, the “
Preferred Stock ”) pursuant to the Company’s
1997 Stock Option Plan (the “ Option Plan ”) or
pursuant to the Employment Agreement, dated October 17, 1997
between the Stockholder, the Company and the Subsidiary (the
“ Employment Agreement ”), and is being granted
pursuant to the Employment Agreement certain Restricted Shares (as
defined therein) and may be granted additional shares of Common
Stock or rights to purchase Common Stock and Preferred Stock in the
future in connection with her employment; and
WHEREAS, the Stockholder and
the Company desire to enter this Agreement and to have this
Agreement apply to the shares of Common Stock and Preferred Stock
owned by the Stockholder immediately following the Recapitalization
or to be purchased or granted pursuant to the Option Plan or the
Employment Agreement, and to any shares of Common Stock or
Preferred Stock acquired after the date hereof by the Stockholder
from whatever source, subject to any future agreement between the
Company and the Stockholder to the contrary (in the aggregate, the
“ Shares ”).
NOW THEREFORE, in
consideration of the premises hereinafter set forth, and other good
and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows.
1. Investment . The
Stockholder represents that the Shares are being acquired for
investment and not with a view toward the distribution
thereof.
2. Issuance of Shares
. The Stockholder acknowledges and agrees that the certificate for
the Shares shall bear the following legends (except that the second
paragraph of this legend shall not be required after the Shares
have been registered under the Securities Act of 1933 and except
that the first paragraph of this legend shall not be required after
the termination of this Agreement):
The shares represented by
this certificate are subject to the terms and conditions of a
Stockholders’ Agreement dated as of October 17, 1997 and may
not be sold, transferred, hypothecated, assigned or encumbered,
except as may be permitted by the aforesaid Agreement. A copy of
the Stockholders’ Agreement may be obtained from the
Secretary of the Company.
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The shares represented by
this certificate have not been registered under the Securities Act
of 1933. The shares have been acquired for investment and may not
be sold, transferred, pledged or hypothecated in the absence of an
effective registration statement for the shares under the
Securities Act of 1933 or an opinion of counsel for the Company (or
an opinion of counsel for the holder, which opinion of counsel is
reasonably satisfactory to the Company) that registration is not
required under said Act.
Upon the termination of this
Agreement, or upon registration of the Shares under the Securities
Act of 1933 (the “ Securities Act ”), the
Stockholder shall have the right to exchange any Shares containing
the above legend (i) in the case of the registration of the Shares,
for Shares legended only with the first paragraph described above
and (ii) in the case of the termination of this Agreement, for
Shares legended only with the second paragraph described
above.
3. Transfer of Shares; Put
Option .
(a) The Stockholder agrees
that she will not cause or permit the Shares or her interest in the
Shares to be sold, transferred, hypothecated, assigned or
encumbered except as expressly permitted by this Section 3;
provided , however , that the Shares or any such
interest may be transferred (i) on the Stockholder’s death by
bequest or inheritance to the Stockholder’s executors,
administrators, testamentary trustees, legatees or beneficiaries,
(ii) to a trust or partnership or LLC or custodianship the
beneficiaries or partners or members of which may include only the
Stockholder, the Stockholder’s spouse, or the
Stockholder’s lineal descendants (by blood or adoption),
(iii) in accordance with Section 5 of this Agreement, and (iv) to
the Company pursuant to Section 4.10 of the Option Plan, subject in
any such case to the agreement by each transferee (other than the
Company) in writing to be bound by the terms of this Agreement and
provided in any such case that no such transfer that would cause
the Company to be required to register the Common Stock under
Section 12(g) of the Securities Exchange Act of 1934, as amended
(the “ Exchange Act ”), shall be permitted, and
provided further that any Shares transferred pursuant to the
foregoing clause (i) or (ii) shall be considered as being held by
the Stockholder for purposes of all rights, obligations and
liabilities hereunder.
(b) The Stockholder shall
have the right, during the 135-day period immediately following the
termination of the employment of Stockholder by the Company without
Cause or by the Stockholder for Good Reason (as defined in the
Employment Agreement), to sell to the Company (or its designated
assignee), and upon the exercise of such right prior to the
termination of this Agreement, the Company (or its designated
assignee) shall purchase from the Stockholder, all or any portion
of the Shares held by the Stockholder as of the
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date as of which such right is exercised
at a per Share price equal to (i) the Appraised Value (as defined
below) of a share of Common Stock or Preferred Stock determined as
of the date as of which such right is exercised if no Public Market
for such Shares exists on such date of exercise, or (ii) the Fair
Market Value (as defined in the Option Plan) of a share of Common
Stock or Preferred Stock determined as of the date as of which such
right is exercised if a Public Market for such Shares exists on
such date of exercise. The Stockholder shall exercise such right by
delivering to the Company and the Majority Stockholder a written
notice specifying her intent to sell Shares held by the
Stockholder, the date as of which such right is to be exercised and
the number of Shares to be sold. Such purchase and sale shall occur
on such date as the Company (or its designated assignee) and the
Stockholder shall agree, which date shall not be later than thirty
(30) days after the date on which the Appraised Value is
determined. To the extent the Company is not permitted to purchase
Shares from the Stockholder hereunder by reason of its covenants
under any loan or debt agreement, the Majority Stockholder will
purchase such Shares under the same terms and conditions provided
herein.
(c) For purposes of Section
3(b) hereof “ Appraised Value ” shall mean, as
of any date, the value per share of Common Stock or Preferred
Stock, as the case may be, as determined by an investment bank
reasonably acceptable to the Company, the Majority Stockholder and
the Stockholder based on an analysis of the price at which the
shares of Common Stock would change hands between a willing buyer
and a willing seller when the former is not under any compulsion to
buy and the latter is not under any compulsion to sell, both
parties having reasonable knowledge of relevant facts based upon a
proportionate interest of the Company as a whole and without regard
to any minority, illiquidity or other similar discount. It is the
intention of the parties that the Appraised Value represent the
value of the shares of Common Stock if the Company was issuing such
shares in an initial public offering. The Company shall bear the
cost of such appraisal.
4. Directors of the
Company .
(a) So long as the
Stockholder owns at least the lesser of (i) fifty percent of the
number of shares of Common Stock beneficially owned by the
Stockholder on the 30th day following the closing of the
Recapitalization, or (ii) shares representing 10% of the Common
Stock of the Company on a fully-diluted basis, the Stockholder
shall serve as a member of the Board of Directors of the Company
(the “ Board ”) and shall have the right to
appoint one additional director to the Board, and to appoint any
successors to such director.
(b) Following the Closing,
there shall be a maximum of ten members of the Board. The Majority
Stockholder shall be entitled to appoint four members of the Board
and the Stockholder and the Majority Stockholder shall mutually
agree on the appointment of the remaining four members of the Board
and their successors (for a total of ten directors), provided, that
nothing herein shall affect the ability of the parties hereto to
remove any member of the Board in accordance with the By-laws of
the Company. Such By-laws will provide that any or all of the four
additional directors may be removed by a vote of the holders of a
majority of the outstanding shares of Common Stock.
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5. Certain Rights
.
(a) Drag Along Rights
. If the Majority Stockholder desires to sell all or substantially
all of its shares of Common Stock to a good faith independent
purchaser or purchasers (hereinafter referred to as a “
Purchaser ”) (other than any other investment
partnership, limited liability company or other entity established
for investment purposes and controlled by the principals of the
Majority Stockholder or any of its affiliates, hereinafter a
“ Permitted Transferee ”) and said Purchaser
desires to acquire all or substantially all of the issued and
outstanding shares of Common Stock (or all or substantially all of
the assets of the Company) upon such terms and conditions as agreed
to with the Majority Stockholder, the Stockholder agrees to sell
all or a Pro Rata Portion of her shares of Common Stock to said
Purchaser (or to vote all of her Shares in favor of any merger or
other transaction which would effect a sale of such shares of
Common Stock or assets of the Company) at the same price per share
of Common Stock and pursuant to the same terms and conditions with
respect to payment for the shares of Common Stock as agreed to by
the Majority Stockholder. For purposes of this Section 5(a), but
only with respect to a sale of shares of Common Stock,
“substantially all” shall mean at least 80% of the
shares of Common Stock then owned by the Majority Stockholder. In
all other circumstances, “substantially all” shall be
interpreted within the meaning of the New York Business Corporation
Law. In such case, the Majority Stockholder shall give written
notice of such sale to the Stockholder at least 45 days prior to
the consummation of such sale, setting forth (i) the consideration
to be received by the holders of shares of Common Stock, (ii) the
identity of the Purchaser, (iii) any other material items and
conditions of the proposed transfer and (iv) the date of the
proposed transfer.
(b) Tag Along Rights .
(i) Subject to paragraph (v) of this Section 5(b), if the Majority
Stockholder or its affiliates proposes to transfer any of its
shares of Common Stock or Preferred Stock to a Purchaser (other
than a Permitted Transferee), then the Majority Stockholder or such
Permitted Transferee (hereinafter in this paragraph (b) of Section
5 referred to as a “ Selling Stockholder ”)
shall give written notice of such proposed transfer to the
Stockholder (the “ Selling Stockholder’s Notice
”) at least 45 days prior to the consummation of
such
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