Exhibit 4.1
STOCKHOLDERS' AGREEMENT
STOCKHOLDERS' AGREEMENT (this "Agreement"), dated as of
February 12, 2003, between J. Crew Group, Inc. (the "Company"), TPG Partners II,
L.P. ("TPG") and Xxxxx Xxxxxxxxxx (the "Stockholder").
WHEREAS, the Stockholder is an employee of the Company and in
such capacity is on the date hereof being granted restricted shares ("Restricted
Shares") of common stock of the Company, $.01 par value per share ("Common
Stock"), and is being granted certain options (the "Options") to purchase shares
of Common Stock, in each case pursuant to the Company's 2003 Equity Incentive
Plan (the "2003 Plan"), and may be granted additional shares of Common Stock or
rights to purchase Common Stock in the future in connection with his performance
of services;
WHEREAS, as a condition to the issuance of the Restricted
Shares and shares of Common Stock pursuant to the exercise of an Option, the
Stockholder is required under the 2003 Plan to execute this Agreement; and
WHEREAS, the Stockholder and the Company desire to enter this
Agreement and to have this Agreement apply to the shares to be acquired pursuant
to the 2003 Plan 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 February 12, 2003
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
legends (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 commencing on the later of (x) the termination of the Stockholder's
employment with the Company for any reason and (y) one year 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 2003 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
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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 propose 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) 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 and the denominator of which shall
be the total number of such shares then outstanding (including such shares
proposed to be sold 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 Section 4(b),
"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 such shares, and the denominator of which shall be the
sum of (1) the aggregate Pro Rata Portions with respect to the shares of
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Common Stock of all of the Other Stockholders that have elected to exercise
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 (x) the total number of shares of Common Stock proposed to be
sold to a Purchaser as set forth in a Selling Stockholder's Notice, over (y) 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.
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 Rule 902(j) of the
Securities Act) or any designated offshore securities market (within the meaning
of Rule 902(b) 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 2003
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:
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If to the Stockholder:
To the Stockholder's most recent address on file with
the Company.
If to the Company:
J. Crew Group, Inc.
000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
If to TPG:
TPG Partners II, L.P.
c/o TPG Advisors II, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx
or 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.
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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. A facsimile of a signature shall be deemed an
original signature for purposes of this Agreement
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
J. CREW GROUP, INC.
/s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Executive Vice-President
and Chief Financial Officer
TPG PARTNERS II, L.P.
By: TPG GenPar II, L.P
By: TPG Advisors II, Inc.
/s/ Xxxxxxx X. Xxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice-President
/s/ Xxxxx Xxxxxxxxxx
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Xxxxx Xxxxxxxxxx
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