Exhibit 4.6
STOCKHOLDERS' AGREEMENT
STOCKHOLDERS' AGREEMENT (this "Agreement"), dated as of September 9,
2002, between J. Crew Group, Inc. (the "Company"), TPG Partners II, L.P. ("TPG")
and Xxxxxxx X. Pilot (the "Stockholder").
WHEREAS, the Stockholder is an employee of the Company and J. Crew
Operating Corp., a wholly-owned subsidiary of the Company (the "Subsidiary"), 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, $.01 par
value per share, of the Company ("Common Stock") pursuant to the Company's 1997
Stock Option Plan (the "Option Plan") or the Employment Agreement, dated August
26, 2002, among the Stockholder, the Company and the Subsidiary (the "Employment
Agreement"), and is being granted pursuant to the Employment Agreement certain
Granted Shares and Restricted Shares (each as defined therein) and may be
granted additional shares of Common Stock or rights to purchase Common Stock in
the future in connection with his employment; and
WHEREAS, the Stockholder and the Company desire to enter into this
Agreement and to have this Agreement apply to the shares of Common Stock to be
purchased or granted pursuant to the Option Plan or the Employment Agreement,
and to any shares of Common 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 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 September 9, 2002 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.
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 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; Call Rights.
(a) The Stockholder agrees that he will not cause or permit the Shares
or his 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
custodianship the beneficiaries of which may include only the Stockholder, the
Stockholder's spouse, or the Stockholder's lineal descendants (by blood or
adoption) and (iii) in accordance with Section 4 of this Agreement, 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.
(b) The Company (or its designated assignee) shall have the right,
during the ninety-day period commencing on the later of (x) the termination of
the Stockholder's employment with the Company for any reason and (y)
one-hundred-eighty-one (181) days following the date of the acquisition by the
Stockholder of any Shares, to purchase from the Stockholder, and upon the
exercise of such right the Stockholder shall sell to the Company (or its
designated assignee), all or any portion of the Shares held by the Stockholder
as of the date as of which such right, is exercised at a per Share price equal
to the Fair Market Value (as defined in the Option Plan) of a share of Common
Stock determined as of the date as of which such right is exercised. The Company
(or its designated assignee) shall exercise such right by delivering to the
Stockholder a written notice specifying its intent to purchase Shares held by
the Stockholder, the date as of which such right is to be exercised and the
number of Shares to be purchased. Such purchase and sale shall occur on such
date as the Company (or its designated assignee) shall specify which date shall
not be later than ninety (90) days after the fiscal quarter-end immediately
following the date as of which the Company's right is exercised.
4. Certain Rights.
(a) Drag Along Rights. If TPG desires to sell all or substantially all
of its shares of Common Stock to a good faith independent purchaser (a
"Purchaser") (other than any other investment partnership, limited liability
company or other entity established for investment purposes and controlled by
the principals of TPG or any of its affiliates and other than any employees of
TPG or any of its affiliates, hereinafter referred to as 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
TPG, the Stockholder agrees to sell all of his Shares to said
2
Purchaser (or to vote all of his 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 TPG. In such case, TPG shall give written notice of such sale to
the Stockholder at least 30 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 ( iv) of this Section
4(b), if TPG or its affiliates proposes to transfer any of its shares of Common
Stock to a Purchaser (other than a Permitted Transferee), then TPG or such
Permitted Transferee (hereinafter referred to as a "Selling Stockholder") shall
give written notice of such proposed transfer to the Stockholder (the "Selling
Stockholder's Notice") at least 30 days prior to the consummation of such
proposed transfer, and shall provide notice to all other stockholders of the
Company to whom TPG has granted similar "tag-along" rights (such stockholders
together with the Stockholder, referred to herein as the "Other Stockholders")
setting forth (A) the number of shares of Common Stock offered, (B) the
consideration to be received by such Selling Stockholder, (C) the identity of
the Purchaser, (D) any other material items and conditions of the proposed
transfer and (E) the date of the proposed transfer.
(ii) Upon delivery of the Selling Stockholder's Notice, the
Stockholder may elect to sell up to the sum of (A) the Pro Rata Portion (as
hereinafter defined) and (B) the Excess Pro Rata Portion (as hereinafter
defined) of his Shares, 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 Selling Stockholder, by sending written notice
to the Selling Stockholder within 15 days of the date of the Selling
Stockholder's Notice, indicating his election to sell up to the sum of the Pro
Rata Portion plus the Excess Pro Rata Portion of his Shares in the same
transaction. Following such 15 day period, the Selling Stockholder and each
Other Stockholder shall be permitted to sell to the Purchaser on the terms and
conditions set forth in the Selling Stockholder's Notice the sum of (X) the Pro
Rata Portion and (Y) the Excess Pro Rata Portion of its Shares.
(iii) For purposes of Section 4(b) and 4(c) hereof, "Pro Rata Portion"
shall mean, with respect to shares of Common Stock held by the Stockholder or
Selling Stockholder, as the case may be, a number equal to the product of (x)
the total number of such shares then owned by the Stockholder or the Selling
Stockholder, as the case may be, and (y) a fraction, the numerator of which
shall be the total number of such shares proposed to be sold to the Purchaser as
set forth in the Selling Stockholder's Notice or initially proposed to be
registered by the Selling Stockholder, as the case may be, and the denominator
of which shall be the total number of such shares then outstanding (including
such shares proposed to be sold or registered by the Selling Stockholder);
provided, however, that any fraction of a share resulting from such calculation
shall be disregarded for purposes of determining the Pro Rata Portion. For
purposes of Sections 4(b) and 4(c), "Excess Pro Rata Portion" shall mean, with
respect to shares of Common Stock held by the Stockholder or the Selling
Stockholder, as the case may be, a number equal to the product of (x) the number
of Non-Elected Shares (as defined below) and (y) a fraction, the numerator of
which shall be such Stockholder's Pro Rata Portion with respect to
3
such shares, and the denominator of which shall be the sum of (1) the aggregate
Pro Rata Portions with respect to the shares of Common Stock of all of the Other
Stockholders that have elected to exercise in full their rights to sell their
Pro Rata Portion of shares of Common Stock, and (2) the Selling Stockholder's
Pro Rata Portion of shares of Common Stock (the aggregate amount of such
denominator is hereinafter referred to as the "Elected Shares"). For purposes of
this Agreement, "Non-Elected Shares" shall mean the excess, if any, of the total
number of shares of Common Stock, proposed to be sold to a Purchaser as set
forth in a Selling Stockholder's Notice or initially proposed to be registered
by the Selling Stockholder, as the case may be, less the amount of Elected
Shares.
(iv) Notwithstanding anything to the contrary contained herein, the
provisions of this Section 4(b) shall not apply to any sale or transfer by TPG
of shares of Common Stock unless and until TPG, after giving effect to the
proposed sale or transfer, shall have sold or transferred in the aggregate
(other than to Permitted Transferees) shares of Common Stock, representing 7.5%
of shares of Common Stock owned by TPG on the date hereof.
(c) Piggyback Registration Rights.
(i) Notice to Stockholder. If the Company determines that it will file
a registration statement under the Securities Act, other than a registration
statement on Form S-4 or Form S-8 or any successor form, for an offering which
includes shares of Common Stock held by TPG or its affiliates (hereinafter in
this paragraph (c) of Section 4 referred to as a "Selling Stockholder"), then
the Company shall give prompt written notice to the Stockholder that such filing
is expected to be made (but in no event less than 30 days nor more than 60 days
in advance of filing such registration statement), the jurisdiction or
jurisdictions in which such offering is expected to be made, and the underwriter
or underwriters (if any) that the Company (or the person requesting such
registration) intends to designate for such offering. If the Company, within 15
days after giving such notice, receives a written request for registration of
any Shares from the Stockholder, then the Company shall include in the same
registration statement the number of Shares to be sold by the Stockholder as
shall have been specified in his request, except that the Stockholder shall not
be permitted to register more than the Pro Rata Portion plus the Excess Pro Rata
portion of his Shares. The Company shall bear all costs of preparing and filing
the registration statement, and shall indemnify and hold harmless, to the extent
customary and reasonable, pursuant to indemnification and contribution
provisions to be entered into by the Company at the time of filing of the
registration statement, the seller of any shares of Common Stock covered by such
registration statement.
Notwithstanding anything herein to the contrary, the Company, on prior
notice to the participating Stockholder, may abandon its intention to file a
registration statement under this Section 4(c) at any time prior to such filing.
(ii) Allocation. If the managing underwriter shall inform the Company
in writing that the number of shares of Common Stock requested to be included in
such registration exceeds the number which can be sold in (or during the time
of) such offering within a price range acceptable to TPG, then the Company shall
include in such registration such number of shares of Common Stock which the
Company is so advised can be sold in (or during the time of) such offering. All
holders of shares of Common Stock proposing to sell shares of Common
4
Stock shall share pro rata in the number of shares of Common Stock to be
excluded from such offering, such sharing to be based on the respective numbers
of shares of Common Stock as to which registration has been requested by such
holders.
(iii) Permitted Transfer. Notwithstanding anything to the contrary
contained herein, sales of Shares pursuant to a registration statement filed by
the Company may be made without compliance with any other provision of this
Agreement.
5. Termination. This Agreement shall terminate immediately following
the existence of a Public Market for the Common Stock except that (i) the
requirements contained in Section 2 hereof shall survive the termination of this
Agreement and (ii) the provisions contained in Section 3 hereof shall continue
with respect to each Share during such period of time, if any, as the
Stockholder is precluded from selling such Shares pursuant to Rule 144 of the
Securities Act. For this purpose, a "Public Market" for the Common Stock shall
be deemed to exist if the Common Stock is registered under Section 12(b) or
12(g) of the Exchange Act and trading regularly occurs in such Common Stock in,
on or through the facilities of securities exchanges and/or inter-dealer
quotation systems in the United States (within the meaning of Section 902(n) of
the Securities Act) or any designated offshore securities market (within the
meaning of Rule 902(a) of the Securities Act).
6. Distributions With Respect To Shares. As used herein, the term
"Shares" includes securities of any kind whatsoever distributed with respect to
the Common Stock acquired by the Stockholder pursuant to the Option Plan or any
such securities resulting from a stock split or consolidation involving such
Common Stock.
7. Amendment; Assignment. This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only by a
written instrument signed by authorized representatives of the parties or, in
the case of a waiver, by an authorized representative of the party waiving
compliance. No such written instrument shall be effective unless it expressly
recites that it is intended to amend, supersede, cancel, renew or extend this
Agreement or to waive compliance with one or more of the terms hereof, as the
case may be. Except for the Stockholder's right to assign his or her rights
under Section 3(a) or the Company's right to assign its rights under Section
3(b), no party to this Agreement may assign any of its rights or obligations
under this Agreement without the prior written consent of the other parties
hereto.
8. Notices. All notices and other communications hereunder shall be
in writing, shall be deemed to have been given if delivered in person or by
certified mail, return receipt requested, and shall be deemed to have been given
when personally delivered or three (3) days after mailing to the following
address:
If to the Company:
J. Crew Group, Inc.
000 Xxxxxxxx, Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Board of Directors and Secretary
5
with a copy to:
Xxxx Xxxx, Esq.
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to TPG:
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxx
If to the Stockholder, to the address on record with the Company; or
for any party, to such other address as any party may have furnished to the
others in writing in accordance herewith, except that notices of change of
address shall only be effective upon receipt.
9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but each of which
together shall constitute one and the same document.
10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of NEW YORK, without reference to its
principles of conflicts of law.
11. Binding Effect. This Agreement shall be binding upon, inure to the
benefit of, and be enforceable by the heirs, personal representatives,
successors and permitted assigns of the parties hereto. Nothing expressed or
referred to in this Agreement is intended or shall be construed to give any
person other than the parties to this Agreement, or their respective heirs,
personal representatives, successors or assigns, any legal or equitable rights,
remedy or claim under or in respect of this Agreement or any provision contained
herein.
12. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof.
13. Severability. If any term, provision, covenant or restriction of
this Agreement, is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
14. Miscellaneous. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
* * * * * *
6
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
___________________________
Xxxxxxx X. Pilot
J. CREW GROUP, INC.
____________________________
By:
Title:
TPG PARTNERS II, L.P.
____________________________
By:
Title:
7
