STOCKHOLDER VOTING AGREEMENT
EXHIBIT
99.4
EXECUTION
COPY
THIS
STOCKHOLDER VOTING AGREEMENT (this “Agreement”) is made
and entered into as of November 8, 2007, by and between Restoration Hardware,
Inc., a Delaware corporation (the “Company”) and the undersigned
stockholder (the “Stockholder”).
RECITALS
WHEREAS,
concurrent with the execution and delivery hereof, Company, Home Holdings,
LLC,
a Delaware limited liability company (the “Parent”), and Home Merger Sub,
Inc., a Delaware corporation (“Merger Sub”), are entering into a Merger
Agreement of even date herewith (as it may be amended from time to time pursuant
to the terms thereof other than an amendment that reduces the Merger
Consideration or imposes additional material conditions to the Parent’s
obligation to consummate the Merger, the “Merger Agreement”) (capitalized
and other defined terms used but not expressly defined herein have the
respective meanings assigned thereto in the Merger Agreement);
WHEREAS,
as of the date hereof, the Stockholder is the record owner of such number of
shares of Company Common Stock as is indicated on Exhibit A to this
Agreement, and is also a “beneficial owner” of such shares within the meaning of
Rule 13d-3 under the Exchange Act; and
WHEREAS,
in consideration of the execution and delivery of the Merger Agreement by the
Company and so as to facilitate the consummation of the Merger and the
transactions contemplated by the Merger Agreement, the Stockholder desires
to
agree to vote its Shares (as defined below) on the terms and subject to the
conditions set forth herein.
NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements herein, and intending to be legally bound, the parties hereto hereby
agree as follows:
1.
Certain Definitions.
(a) Capitalized
terms used herein without definition are used as defined in the Merger
Agreement, and, in addition:
“Constructive
Sale” means, with respect to any security, a short sale or entering into or
acquiring an offsetting derivative contract with respect to such security,
entering into or acquiring a futures or forward contract to deliver such
security or entering into any other hedging or other derivative transaction
that
has the effect of materially changing the economic benefits and risks of
ownership of such security.
“Shares”
means (i) all outstanding shares of Company Common Stock and other voting
securities of Company owned, beneficially or of record, by the Stockholder
as of
the date hereof, (ii) all additional outstanding shares of Company Common Stock
and other voting securities of Company acquired by the Stockholder, beneficially
or of record, during the period commencing with the execution and delivery
of
this Agreement and expiring on the date on which this Agreement terminates
or is
terminated pursuant to Section 6 hereof, and (iii) such other outstanding shares
of Company Common Stock and other voting securities of Company over which the
Stockholder has or will have voting power during the period commencing with
the
execution and delivery of this Agreement and expiring on the date on which
this
Agreement terminates or is terminated pursuant to Section 6 hereof.
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“Transfer”
means, with respect to any security, the direct or indirect (i) assignment,
sale, transfer, tender, pledge, hypothecation, placement in voting trust,
Constructive Sale or other disposition of such security (excluding transfers
by
testamentary or intestate succession), of any right, title or interest in such
security (including, without limitation, any right or power to vote to which
the
holder thereof may be entitled, whether such right or power is granted by proxy
or otherwise) or of the record or beneficial ownership of such security, or
(ii)
offer to make any such sale, transfer, tender, pledge, hypothecation, placement
in voting trust, Constructive Sale or other disposition, and each agreement,
arrangement or understanding, whether or not in writing, to effect any of the
foregoing, in each case, excluding any (1) transfer, assignment, sale, pledge,
hypothecation, encumbrance or similar disposition pursuant to a court order,
and
(2) such actions pursuant to which the Stockholder maintains all voting rights
with respect to such security.
(b) Any
singular term in this Agreement shall be deemed to include the plural, and
any
plural term the singular. Whenever the words “include,” “includes” or
“including” are used in this Agreement, they shall be deemed followed by the
words “without limitation.”
2.
Transfer of Voting Rights. At all times
during the period commencing with the execution and delivery of this Agreement
and expiring on the date on which this Section 2 terminates or is terminated
pursuant to Section 6 hereof, except for the execution, delivery and performance
by Stockholder of the Rollover Agreement the Stockholder has entered into with
Parent on the date hereof, and any transfer, assignment or similar disposition
to one or more affiliated funds or affiliated entities of the Stockholder that
agree to be bound by the terms of this Agreement, or as approved by the Company,
the Stockholder shall not Transfer (or permit the Transfer of), grant any proxy,
or enter into any voting agreement or similar agreement in contravention of
the
obligations of the Stockholder under this Agreement with respect to any of
the
Shares.
3.
Agreement to Vote Shares. The Stockholder hereby
agrees that the Stockholder shall, with respect to all of the Shares that
Stockholder is entitled to vote (any limitations upon Stockholder’s right to
vote any Shares is set forth in Exhibit A):
(a) until
this Agreement terminates or is terminated pursuant to Section 6 hereof, subject
to Section 3(d) hereof, at any meeting of the holders of Shares, however called,
and at every adjournment or postponement thereof, appear at such meeting or
otherwise cause the Shares to be counted as present thereat for purposes of
establishing a quorum;
(b) until
this Agreement terminates or is terminated pursuant to Section 6 hereof, subject
to Section 3(d) hereof, at any meeting of the holders of Shares for the purpose
of voting on the Merger Agreement and the transactions contemplated thereby,
however called, and at every adjournment or postponement thereof, vote the
Shares or cause the Shares to be voted in favor of the adoption by the Company’s
stockholders of the Merger Agreement and the approval of the transactions
contemplated thereby, including any action reasonably necessary to waive any
dissenters’ or appraisal rights it may have in respect of such transaction and
any action required in furtherance thereof;
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(c) until
this Agreement terminates or is terminated pursuant to Section 6 hereof, subject
to Section 3(d) hereof, at any meeting of the holders of Shares, however called,
and at every adjournment or postponement thereof, vote, or cause the Shares
to
be voted, against any amendment of the Company’s Certificate of Incorporation or
By-laws or other proposal, action or transaction involving the Company or any
of
its Subsidiaries or any of its stockholders, which amendment or other proposal,
action or transaction would reasonably be expected to prevent or materially
impede or delay the consummation of the Merger or the other transactions
contemplated by the Merger Agreement or the consummation of the transactions
contemplated by this Agreement; and
(d) notwithstanding
the foregoing provisions of this Section 3, and until this Section 3(d)
terminates or is terminated pursuant to Section 6 hereof, so long as (i) each
of
Parent, Merger Sub and the Company complies in all material respects with its
obligations under the Merger Agreement, (ii) the Company elects to terminate
the
Merger Agreement pursuant to and in compliance with Section 7.1(d)(ii) thereof
in connection with a Superior Proposal, (iii) the Alternative Acquisition
Agreement providing for the Superior Proposal is (x) entered into with any
Person after the date hereof and prior to the Solicitation Period End-Date
or
entered into thereafter with an Excluded Party prior to the receipt of the
Company Stockholder Approvals, and (y) provides for the payment to all holders
of Common Stock either all cash consideration or a combination of cash and
non-cash consideration where holders of the Company’s Common Stock may elect to
receive all cash consideration without any cutback or proration based upon
the
number of other holders so electing (the occurrence of clauses (i), (ii) and
(iii) collectively, a “Superior Proposal Event”), and (iv) the Board of
Directors’ recommendation in favor of the adoption of such Alternative
Acquisition Agreement remains in effect and has not been adversely modified
or
withdrawn, then if the Board of Directors or the Independent Committee of the
Company request in writing, at any meeting of the holders of Common Stock for
the purpose of voting on the Alternative Acquisition Agreement and the
transactions contemplated thereby, however called, and at every adjournment
or
postponement thereof, vote the Shares or cause the Shares to be voted in favor
of the adoption by the Company’s stockholders of the Alternative Acquisition
Agreement and the approval of the transactions contemplated thereby, including
any action reasonably necessary to waive any dissenters’ or appraisal rights it
may have in respect of such transaction and any action required in furtherance
thereof.
4.
Covenants of the Stockholder. The
Stockholder covenants and agrees with the Company that, during the period
commencing on the date hereof and ending on the date this Agreement is
terminated pursuant to Section 6 hereof:
(a) Except
for the execution, delivery and performance by the Stockholder of the Rollover
Agreement the Stockholder has entered into with Parent on the date hereof,
and
any transfer, assignment or similar disposition to one or more affiliated funds
or affiliated entities of the Stockholder that agree to be bound by the terms
of
this Agreement, the Stockholder shall not, directly or indirectly, sell,
transfer, pledge, hypothecate, encumber, assign or dispose of any Shares (or
the
beneficial ownership thereof) or offer to make such a sale, transfer or other
disposition to any person, in each case, in a manner that would materially
impair the ability of the Stockholder to satisfy its obligations under Section
3
hereof.
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(b) The
Stockholder shall execute and deliver such other documents and instruments
and
take such further actions as are reasonably necessary in order to ensure that
the Company receives the benefit of this Agreement.
5.
Representations and Warranties of the
Stockholder. The Stockholder hereby represents and warrants to
the Company as follows:
(i) The Stockholder has the
requisite power and authority to execute, deliver and perform this Agreement
and
to consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement by the Stockholder and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary action on the part of the Stockholder. This
Agreement has been duly executed and delivered by or on behalf of the
Stockholder and constitutes a valid and legally binding obligation of the
Stockholder, enforceable against the Stockholder in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar Laws of general applicability relating to or affecting
creditors’ rights and to general equitable principles.
(ii) As
of the date hereof, all of the Shares of which the Stockholder is the record
and
beneficial owner of are set forth on Exhibit A hereto, such Shares are free
and
clear of any liens, claims, encumbrances, mortgages, security interests and
charges of any nature whatsoever (collectively, “Encumbrances”), other
than Encumbrances created by this Agreement or the Rollover Agreement, as
applicable, and such Shares are not subject to any preemptive right of any
stockholder of the Company.
(iii) The
execution and delivery of this Agreement by the Stockholder does not, and the
performance of this Agreement by the Stockholder will not, (A) require any
consent, approval, authorization or permit of, or filing with or notification
to, any Governmental Entity or any other person by the Stockholder, except
(x)
as provided in the Merger Agreement, (y) filings with the SEC of such reports
or
other furnished or filed materials under the Exchange Act as may be required
in
connection with the execution and delivery of this Agreement and the
transactions contemplated hereby, or (z) that would be required by virtue of
the
businesses of the Company or Parent or their affiliates (as defined in the
Merger Agreement); (B) conflict with, or result in any violation of, or default
(with or without notice or lapse of time or both) under any provision of, the
certificate of incorporation, by-laws or analogous documents of the Stockholder
or any other agreement to which the Stockholder is a party, including any voting
agreement, stockholder agreement, voting trust, trust agreement, pledge
agreement, loan or credit agreement, note, bond, mortgage, indenture, lease
or
other agreement, instrument, permit, concession, franchise or license; or (C)
conflict with or violate any judgment, order, notice, decree, statute, law,
ordinance, rule or regulation applicable to the Stockholder or to any of the
Stockholder’s property or assets, except in the cases of (B) and (C) above where
such conflicts or violations would not reasonably be expected to prevent or
materially impede or delay the consummation of the Merger or the other
transactions contemplated by the Merger Agreement or the consummation of the
transactions contemplated by this Agreement.
6.
Termination. Subject to the immediately following
sentence, this Agreement shall terminate and be of no further force or effect
as
of the earliest to occur of (i) the day after the receipt of the Company
Stockholder Approvals, (ii) the expiration or termination of the Merger
Agreement in accordance with its terms, (iii) June 30, 2008, and (iv) at the
election of the Stockholder, upon an Adverse Recommendation Change made by
the
Board of Directors (or Independent Committee). Notwithstanding the
immediately preceding sentence, if a Superior Proposal Event has occurred,
the
provisions of Section 2,Section 3(d), this Section 6 and
Section 7 of this Agreement shall continue in full force
and effect until
the earliest to occur of (i) the day after the receipt of all Company
stockholder approvals required to approve the Alternative Acquisition Agreement
providing for the Superior Proposal, (ii) the expiration or termination of
such
Alternative Acquisition Agreement for the Superior Proposal in accordance with
its terms, and (iii) June 30, 2008.
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7.
Stockholder Capacity. The Stockholder is hereby
executing and performing this Agreement solely in its capacity as the owner
of
the Shares, and nothing in this Agreement shall limit or restrict any partner,
member, director, officer, employee or affiliate of the Stockholder who is
or
becomes during the term hereof a member of the Board of Directors or an officer
of the Company or any of its Subsidiaries from acting, omitting to act or
refraining from taking any action, solely in such person’s capacity as a member
of the Board of Directors or as an officer of the Company (or as an officer
or
director of any of the Company’s Subsidiaries) consistent with his or her
fiduciary duties in such capacity under applicable law.
8.
Severability. If any term or other provision of
this Agreement is held invalid, illegal or incapable of being enforced by any
court of competent jurisdiction, all other terms and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
legal substance of the transactions contemplated hereby is not affected in
any
manner materially adverse to any party hereto. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the fullest extent possible.
9.
Binding Effect and Assignment. This Agreement and
all of the provisions hereof shall be binding upon and inure to the benefit
of
the parties hereto and their respective successors and permitted assigns,
provided that except as otherwise specifically provided herein, neither this
Agreement nor any of the rights, interests or obligations of the parties hereto
may be assigned by any of the parties hereto without prior written consent
of
the other parties hereto except as expressly contemplated hereby and except
that
the Company, without obtaining the consent of any other party hereto, shall
be
entitled to assign this Agreement or all or any of its rights or obligations
hereunder to any one or more affiliates (as defined in the Merger Agreement)
of
the Company, but no assignment by the Company under this Section 9 shall relieve
the Company of its obligations under this Agreement. Any assignment in violation
of the foregoing shall be void. Nothing in this Agreement, express or
implied, is intended to or shall confer upon any other person other than the
parties hereto any rights or remedies hereunder or in connection
herewith.
10. Amendments
and Modification. This Agreement may not be modified, amended,
altered or supplemented except upon the execution and delivery of a written
agreement executed by each of the parties hereto; provided that any provision
of
this Agreement may be waived, or the time for its performance may be extended,
by the party or parties entitled to the benefit thereof by a writing signed
by
each such party or an authorized representative thereof.
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11. Specific
Performance; Injunctive Relief. The parties hereto acknowledge
that the Company shall be irreparably harmed and that there shall be no adequate
remedy at law for a violation of any of the covenants or agreements of
Stockholder set forth in this Agreement. Therefore, the Stockholder
hereby agrees that, in addition to any other remedies that may be available
to
the Company upon any such violation, the Company shall have the right to enforce
such covenants and agreements by specific performance, injunctive relief or
by
any other means available to such party at law or in equity.
12. Notices. All
notices and other communications pursuant to this Agreement shall be in writing
and deemed to be sufficient if contained in a written instrument and shall
be
deemed given if delivered personally, telecopied, sent by nationally recognized
overnight courier or mailed by registered or certified mail (return receipt
requested), postage prepaid, to the parties at the following addresses (or
at
such other address for a party as shall be specified by like notice): if to
the
Company, to its address provided in the Merger Agreement, with a copy to the
Company’s counsel; and if to the Stockholder, to the Stockholder’s address shown
on Exhibit A (or such other address as shall be specified by like
notice).
13. Governing
Law. This Agreement shall be governed by the laws of the State of
Delaware, without reference to its principles of conflicts of law.
14. Entire
Agreement. This Agreement, together with the documents expressly
referred to herein, contain the entire understanding of the parties in respect
of the subject matter hereof, and supersede all prior negotiations and
understandings between the parties with respect to such subject
matter.
15. Effect
of Headings. The Section headings are for convenience only and
shall not affect the construction or interpretation of this
Agreement.
16. Counterparts. This
Agreement may be executed in several counterparts, each of which shall be an
original, but all of which together shall constitute one and the same
agreement.
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IN
WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed
as of the date first above written.
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RESTORATION
HARDWARE, INC.
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By:
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/s/ Xxxx X. Xxxxxxxx | ||
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Name:
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Xxxx
X. Xxxxxxxx
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Title:
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Chief
Executive Officer
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[Signature
Page to the Stockholder Voting
Agreement]
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MICRO
CAP PARTNERS, L.P.
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By:
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Its
General Partner
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By:
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Palo
Alto Investors,
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Its
Manager
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By:
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/s/ Xxxx Xxxxxx | ||
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Name:
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Xxxx
Xxxxxx
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Title:
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Chief
Operating Officer
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[Signature
Page to the Stockholder Voting
Agreement]
EXHIBIT
A
NUMBER
OF SHARES OF COMPANY COMMON STOCK
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COMPANY
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NAME
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ADDRESS
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COMMON
STOCK OWNED
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Micro
Cap
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1,032,620
shares of Common Stock
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Partners,
L.P.
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Attn:
Xxxx Xxxxxx,
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Chief
Operating Officer
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000
Xxxxxxxxxx Xxxxxx
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Xxxx
Xxxx, XX 00000
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Facsimile: 000
000-0000
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with
a copy to:
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O’Melveny
& Xxxxx LLP
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Attn: Xxxxx X. Xxxxxxxx
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Embarcadero
Center West
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000
Xxxxxxx Xxxxxx
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Xxx
Xxxxxxxxx, XX 00000
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Facsimile: 000
000-0000
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