Exhibit 10.8
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INVESTORS' RIGHTS AGREEMENT
Dated as of February 12, 2003
by and among ▇▇▇▇▇▇▇▇-Van Heusen Corporation and
the Other Signatories Hereto
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TABLE OF CONTENTS
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Page
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ARTICLE I DEFINITIONS.........................................................2
SECTION 1.1 Definitions....................................................2
SECTION 1.2 General Interpretive Principles................................7
ARTICLE II Governance.........................................................7
SECTION 2.1 Board Meetings.................................................7
SECTION 2.2 Expenses.......................................................7
SECTION 2.3 Committees; Board Requirements; Resignation Obligation.........7
SECTION 2.4 Appointment of the Chief Executive Officer.....................8
SECTION 2.5 Observers......................................................8
ARTICLE III Additional Agreements.............................................8
SECTION 3.1 Standstill.....................................................8
SECTION 3.2 Anti-Takeover Provisions and Permitted Acquisitions...........9
SECTION 3.3 Dispositions..................................................10
SECTION 3.4 Anti-Takeover Provisions and Permitted Disposition...........10
ARTICLE IV Additional Covenants..............................................11
SECTION 4.1 Certain Information...........................................11
SECTION 4.2 Right to Participate in Sale and Third-Party Bid..............11
SECTION 4.3 Preemptive Rights.............................................11
SECTION 4.4 Restricted Actions............................................12
ARTICLE V Termination........................................................13
SECTION 5.1 Termination...................................................13
ARTICLE VI Miscellaneous.....................................................13
SECTION 6.1 Amendment and Modification....................................13
SECTION 6.2 Assignment; No Third Party Beneficiaries......................13
SECTION 6.3 Binding Effect; Entire Agreement..............................14
SECTION 6.4 Severability..................................................14
SECTION 6.5 Notices and Addresses.........................................14
SECTION 6.6 Governing Law.................................................15
SECTION 6.7 Headings......................................................15
SECTION 6.8 Counterparts..................................................15
SECTION 6.9 Further Assurances............................................15
SECTION 6.10 Remedies.....................................................15
SECTION 6.11 Jurisdiction.................................................15
INVESTORS' RIGHTS AGREEMENT
THIS INVESTORS' RIGHTS AGREEMENT, dated as of February 12, 2003 (this
"Agreement"), by and among ▇▇▇▇▇▇▇▇-Van Heusen Corporation, a Delaware
corporation (the "Company"), and each of the Investors that signs a signature
page annexed hereto (referred to hereinafter collectively as the "Investors" and
individually as an "Investor").
RECITALS:
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A. The Investors and the Company have entered into that certain Securities
Purchase Agreement, dated as of December 16, 2002 (the "Purchase Agreement"), by
and among the Company and the Investors pursuant to which the Investors will
purchase, contemporaneously with the execution and delivery of this Agreement,
10,000 shares of Series B Convertible Preferred Stock of the Company (the
"Series B Stock"), which will constitute all of the issued and outstanding
shares of Series B Stock.
B. It is a condition precedent to the purchase of such Series B Stock that
the Company enter into this Agreement with the Investors to provide for certain
agreements and obligations of the parties following the Closing.
AGREEMENT:
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NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements contained herein and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
intending to be legally bound, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
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SECTION 1.1 Definitions. The following terms shall have the meanings
ascribed to them below:
"Additional Securities" shall have the meaning set forth in Section 4.3(a).
"Affiliate" of a Person shall have the meaning set forth in Rule 12b-2
under the Exchange Act. Notwithstanding anything to the contrary set forth in
this Agreement, no limited partner or similar participant of an Investor shall
be deemed an Affiliate of such Investor.
"Agreement" shall mean this Agreement, as amended, modified or supplemented
from time to time, in accordance with the terms hereof, together with any
exhibits, schedules or other attachments thereto.
"Beneficially Own" with respect to any securities shall mean having
"beneficial ownership" of such securities (as determined pursuant to Rule 13d-3
under the Exchange Act without limitation by the 60-day provision in paragraph
(d)(1)(i) thereof). The terms "Beneficial Ownership" and "Beneficial Owner" have
correlative meanings.
"Board" or "Board of Directors" shall mean the Board of Directors of the
Company.
"Budget" shall have the meaning set forth in Section 4.1.
"CK Purchase Agreement" shall have the meaning set forth in the Purchase
Agreement.
"Closing" shall mean the closing of the transactions contemplated by the
Purchase Agreement.
"Closing Date" shall mean the date of the Closing.
"Certificate of Designations" shall mean the Company's Certificate of
Designations governing the Series B Stock.
"Commission" shall mean the United States Securities and Exchange
Commission, or any other federal agency at the time administering the Securities
Act.
"Common Stock" shall mean the common stock, $1.00 par value per share, of
the Company.
"Company" shall have the meaning set forth in the preamble of this
Agreement.
"Competitor" shall mean any Person whose principal business is developing,
designing, merchandising, licensing, manufacturing or causing the manufacture
of, men's, women's, children's or infants wearing apparel, footwear,
accessories, luggage, watches, jewelry, fragrances, eyewear and optical
products, home furnishing products and accessories, table top housewares,
silverware, floor and wall coverings, furniture or leather goods.
"Declining Preemptive Purchaser" shall have the meaning set forth in
Section 4.3(c).
"Derivative Securities" shall mean any subscriptions, options, conversion
rights, warrants, phantom stock rights or other agreements, securities or
commitments of any kind obligating the Company or any of its Subsidiaries to
issue, grant, deliver or sell, or cause to be issued, granted, delivered or sold
(i) any Voting Securities of the Company, (ii) any securities convertible into,
exercisable for or exchangeable for any Voting Securities of the Company, or
(iii) any obligations measured by the price or value of any shares of capital
stock of the Company.
"Disposition" shall have the meaning set forth in Section 3.3.
"DGCL Section 203" shall have the meaning set forth in Section 3.2.
"Director" shall mean a director of the Company.
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"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
or any successor statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Excluded Shares" shall mean (i) shares of Common Stock issuable upon
conversion of, or distributions with respect to, any shares of Series B Stock;
(ii) shares of Common Stock issuable upon exercise of the Warrants; (iii) shares
of Common Stock issuable upon the exercise of stock options or other awards made
or denominated in shares of Common Stock under any of the Company's stock plans
including any stock option, stock purchase, restricted stock or similar plan
hereafter adopted by the Board of Directors and, if required by applicable Law
or stock exchange requirement, approved by the stockholders of the Company; and
(iv) shares of Common Stock issued pursuant to an acquisition of a business
(including, without limitation, by way of an acquisition of capital stock) or
the assets of a business (which assets do not consist primarily of cash or cash
equivalents) approved by the Board of Directors.
"Governmental Body" shall mean any government or governmental or
quasi-governmental authority including, without limitation, any federal, state,
territorial, county, municipal or other governmental or quasi-governmental
agency, board, branch, bureau, commission, court, arbitral body (public or
private), department or other instrumentality or political unit or subdivision,
whether located in the United States or abroad, the NYSE, the Nasdaq National
Market, the Nasdaq SmallCap Market or the American Stock Exchange.
"Holder" shall mean any Investor and any Person to whom an Investor has
transferred shares of Series B Stock during the term of this Agreement pursuant
to Section 3.3(b)(iii) or Section 3.3(c).
"Institutional Investor" shall mean any of the following Persons: (i) a
bank, (ii) an insurance company, (iii) a pension fund, (iv) a hedge fund, (v) a
venture capital fund, (vi) a mutual fund, (vii) a leveraged buyout fund, (viii)
an investment bank, (ix) a savings association, (x) an investment fund whose
principal investors are Institutional Investors, or (xi) any Person that is an
Affiliate of any Person named in clauses (i) through (x).
"Investors" shall have the meaning set forth in the preamble of this
Agreement.
"Key Committees" shall have the meaning set forth in Section 2.3.
"Law" shall mean any treaty, statute, ordinance, code, rule, regulation,
Order or other legal requirement enacted, adopted, promulgated, applied or
followed by any Governmental Body.
"NYSE" shall mean the New York Stock Exchange.
"Observer" shall have the meaning set forth in Section 2.5.
"Order" shall mean any order, injunction, judgment, decree, ruling, writ,
assessment or arbitration award.
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"Overallotment Right" shall have the meaning set forth in Section 4.03(a).
"Other Transferee" shall have the meaning set forth in Section 3.3(b).
"Permitted Acquisitions" shall have the meaning set forth in Section
3.1(a).
"Permitted Disposition" shall have the meaning set forth in Section 3.3.
"Person" shall mean any natural person, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof.
"Preemptive Acceptance Notice" shall have the meaning set forth in Section
4.3(b).
"Preemptive Acceptance Period" shall have the meaning set forth in Section
4.3(b).
"Preemptive Notice" shall have the meaning set forth in Section 4.3(b).
"Preemptive Right" shall have the meaning set forth in Section 4.3(a).
"Public Stockholders" shall mean the stockholders of the Company other than
(a) the Investors, (b) any Person who has made a Third-Party Offer, (c) any
Affiliate of any Person included in the foregoing clause (b), and (d) any Person
with whom any Person included in the foregoing clauses (b) or (c) is part of a
13D Group.
"Purchase Agreement" shall have the meaning ascribed thereto in the
recitals.
"Redemption Date" shall have the meaning set forth in the Certificate of
Designations.
"Registration Rights Agreement" shall mean that certain Registration Rights
Agreement, dated as of the date hereof, by and among the Company and the
Investors.
"Rights Agreement" shall mean the Rights Agreement, dated as of June 10,
1986, as amended, by and between the Company and The Bank of New York (successor
to The Chase Manhattan Bank, N.A.), as Rights Agent, and each amendment and
extension thereof.
"Sale" shall mean the sale of the Company by way of stock sale, merger or
comparable transaction, or the sale of all of substantially all of the assets of
the Company.
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder, all as the same
shall be in effect at the time.
"Series B Designees" shall mean the directors elected by the Investors to
the Board of Directors pursuant to the Certificate of Designations.
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"Series B Stock" shall have the meaning ascribed thereto in the recitals.
"Standstill Period" shall mean the period commencing on the Closing Date
and ending on the termination of this Agreement pursuant to Section 5.1.
"Subsidiary" shall mean, as to any Person, any other Person more than 50%
of the shares of the voting stock or other voting interests of which are owned
or controlled, or the ability to select or elect more than 50% of the directors
or similar managers is held, directly or indirectly, by such first Person or one
or more of its Subsidiaries or by such first Person and one or more of its
Subsidiaries.
"Third-Party Bid" shall mean a bid or a proposal made by any Person (with
whom the Board of Directors has participated in discussions or negotiations
concerning such bid or proposal) to acquire the Company by way of (i) a stock
acquisition, (ii) merger or comparable transaction, or (iii) the purchase of all
of substantially all of the assets of the Company.
"Third-Party Offer" shall mean a written offer by a Third-Party Person to
acquire some, all or no shares of Voting Securities held by the Investors and at
least 35% of the outstanding shares of Common Stock held by the Public
Stockholders, through stock acquisition, merger or similar transaction.
"Third-Party Person" shall mean any Person other than (a) any Investor, (b)
any Subsidiary or Affiliate of an Investor, or (c) any Affiliate of any Person
included in the foregoing clauses (a) or (b).
"13D Group" shall mean any group of Persons who, with respect to those
acquiring, holding, voting or disposing of Voting Securities would, assuming
ownership of the requisite percentage thereof, be required under Section 13(d)
of the Exchange Act to file a statement on Schedule 13D with the Commission as a
"person" within the meaning of Section 13(d)(3) of the Exchange Act.
"Total Voting Power" shall mean, calculated at a particular point in time,
the aggregate Votes represented by all then outstanding Voting Securities then
entitled to vote.
"Votes" shall mean, at any time, with respect to any Voting Securities, the
total number of votes that would be entitled to be cast by the holders of such
Voting Securities generally (by the terms of such Voting Securities, the
Certificate of Incorporation of the Company or any certificate of designations
for such Voting Securities) at a meeting held for the election of Directors.
"Voting Securities" shall mean the shares of Common Stock, Series B Stock
and any other securities of the Company entitled to vote generally for the
election of directors, and any securities which are convertible into, or
exercisable or exchangeable for, Voting Securities.
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"Warrants" shall have the meaning set forth in the Purchase Agreement.
SECTION 1.2 General Interpretive Principles. Whenever used in this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires, any noun or pronoun shall be deemed to include the plural as
well as the singular and to cover all genders. The name assigned this Agreement
and the section captions used herein are for convenience of reference only and
shall not be construed to affect the meaning, construction or effect hereof.
Unless otherwise specified, the terms "hereof," "herein" and similar terms refer
to this Agreement as a whole (including the exhibits hereto), and references
herein to Sections refer to Sections of this Agreement.
ARTICLE II
GOVERNANCE
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SECTION 2.1 Board Meetings. For so long as any Series B Designee is a
Director, the Board of Directors shall conduct at least four Board meetings
during each fiscal year of the Company.
SECTION 2.2 Expenses. The Company agrees to reimburse each of the Series B
Designees elected to the Board for their reasonable expenses incurred attending
meetings of the Board and/or any committee of the Board.
SECTION 2.3 Committees; Board Requirements; Resignation Obligation. For so
long as any Series B Designee is a Director, the Holders of Series B Stock may
require that at least one Series B Designee be appointed, subject to compliance
with applicable Law, to each or any of the following committees of the Board of
Directors: (i) the Audit Committee; (ii) the Compensation Committee; (iii) the
Executive Committee; (iv) the Nominating Committee; and (v) any other committee
performing similar functions of any of the foregoing committees (referred to
collectively as the "Key Committees"). Notwithstanding the foregoing, the
Holders of Series B Stock shall not be entitled to designate an individual to
the Board of Directors in the event that such individual would not be qualified
under any applicable Law to serve as a director of the Company or if the Company
objects to such individual because such individual has been involved in any of
the events enumerated in Item 2(d) or (e) of Schedule 13D or such individual is
currently the target of an investigation by any Governmental Body relating to
felonious criminal activity or is subject to any Order of any Governmental Body
prohibiting service as a director of any public company or providing investment
or financial advisory services and, in any such event, the Holders shall
withdraw the designation of such individual and designate a replacement therefor
(which replacement Series B Designee shall also be subject to the requirements
of this Section 2.3). Upon any decrease in outstanding Series B Stock below the
Beneficial Ownership thresholds set forth in Section 9(d) of the Certificate of
Designations and at the request of the Board of Directors, the Investors shall
use all commercially reasonable efforts to cause a number of Series B Designees
to offer to resign from the Board of Directors such that the number of Series B
Designees serving on the Board of Directors immediately thereafter will be equal
to the number of Series B Designees
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which the Investors would then be entitled to designate under Section 9(d) of
the Certificate of Designations.
SECTION 2.4 Appointment of the Chief Executive Officer. For so long as the
Investors continue to own at least 50% of the outstanding shares of Series B
Stock, if a new Chief Executive Officer of the Company is to be appointed, the
Investors shall have the right to designate one of the Series B Designees to be
involved in any search or evaluation process established by the Board of
Directors to interview candidates and recommend to the Board of Directors a new
Chief Executive Officer of the Company, including, without limitation, by way of
serving on any committee formed to oversee the search for and hiring of such new
Chief Executive Officer.
SECTION 2.5 Observers. If the number of Series B Designees appointed to the
Board by the Investors is fewer than the number of Series B Designees the
Investors are entitled to appoint to the Board as holders of the Series B Stock,
the Investors shall be entitled to designate one observer ("Observer") for each
Series B Designee the Investors are entitled to appoint to the Board but have
not so appointed; provided, however, that in no event shall the Investors be
entitled to appoint more than two Observers. Each Observer shall be entitled to
receive notice of all meetings of the Board and Key Committees of the Board and
shall have the right to attend such meetings. The Company shall reimburse each
Observer for his or her reasonable expenses incurred attending such meetings.
None of the Observers shall have the right to vote on any matter presented to
the Board or Key Committees of the Board.
ARTICLE III
ADDITIONAL AGREEMENTS
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SECTION 3.1 Standstill. During the Standstill Period and unless otherwise
approved by the Board of Directors (other than the Series B Designees), each
Holder will not, and will cause each of its Affiliates not to, directly or
indirectly:
(a) acquire, offer or propose to acquire or agree to acquire, whether
by purchase, tender or exchange offer, by joining a partnership, limited
partnership, syndicate or other 13D Group or otherwise, (A) Beneficial Ownership
of any Voting Securities, Derivative Securities or any other securities of the
Company or any rights to acquire (whether currently, upon lapse of time,
following the satisfaction of any conditions, upon the occurrence of any event
or any combination of the foregoing) any Voting Securities, Derivative
Securities or any other securities of the Company, other than (i) the
acquisition of the shares of the Series B Stock pursuant to the Purchase
Agreement, (ii) shares of Common Stock and other securities, if any, issuable
upon the conversion of the Series B Stock, (iii) the acquisition of Voting
Securities pursuant to Sections 4.2 and 4.3 hereof, (iv) the acquisition of
Voting Securities and Derivative Securities as a result of any stock splits,
stock dividends or other distributions, recapitalizations or offerings made
available by the Company to holders of Voting Securities or Derivative
Securities generally, but only to the extent any such securities are owned by a
Holder, (v) in a transaction in which any Holder acquires an interest in an
entity that owns shares of Voting Securities of the Company representing 2% or
less of the Total Voting Power, or (vi) any acquisition of Voting Securities
approved by a majority of the Directors
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(other than the Series B Designees) (clauses (i) through (vi) are referred to
collectively as "Permitted Acquisitions") or (B) the Company or any of its
Subsidiaries or all or substantially all of the assets of the Company or any of
its Subsidiaries except pursuant to Section 4.2 hereof or as approved by a
majority of the Directors (other than the Series B Designees);
(b) engage in any "solicitation" (within the meaning of Rule 14a-1
under the Exchange Act) of proxies or consents relating to the election of
directors with respect to the Company, or become a "participant" in any
"election contest" (within the meaning of the Exchange Act) seeking to elect
directors not nominated by the Board of Directors, other than nominees for
director who are to be elected by the Holders of Series B Stock in accordance
with the Certificate of Designations;
(c) induce or attempt to induce any other Person to initiate any
stockholder proposal to seek election to or seek to place a representative on
the Board of Directors (except pursuant to the Certificate of Designations) or
seek the removal of any member of the Board of Directors of the Company);
(d) in any manner, agree, attempt, seek or propose to deposit any
Voting Securities, Derivative Securities or any other securities of the Company
or any rights to acquire (whether currently, upon lapse of time, following the
satisfaction of any conditions, upon the occurrence of any event or any
combination of the foregoing) any Voting Securities, Derivative Securities or
other securities of the Company in any voting trust or similar arrangement
(other than any such voting trust or similar arrangement among two or more
Holders);
(e) publicly announce any intention, plan or arrangement inconsistent
with the foregoing; or
(f) form or join in the formation of a 13D Group with respect to any
Voting Securities, other than any such "group" consisting exclusively of Holders
and any Affiliates of the Holders;
(g) except as provided in Section 4.2, finance (or arrange financing
for) any Person in connection with any of the foregoing; provided, however, that
nothing in this Section 3.1 shall (i) limit any rights of the Investors under
each of the Purchase Agreement, Certificate of Designations, and Registration
Rights Agreement, (ii) prohibit any individual who is serving as a Director,
solely in his or her capacity as a Director, from (x) exercising his or her
fiduciary duties, (y) taking any action or making any statement at any meeting
of the Board of Directors or of any committee thereof, or (z) making any
statement or disclosure required under federal securities Laws or other
applicable Law, (iii) restrict any disclosure or statements required to be made
by any Investor under applicable Law, or (iv) limit the rights of the Investors
pursuant to Section 4.2 hereof.
SECTION 3.2 Anti-Takeover Provisions and Permitted Acquisitions. The Board
of Directors shall take all action necessary to: (a) exempt from the provisions
of Section 203 of the
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Delaware General Corporation Law ("DGCL Section 203") any Permitted Acquisition,
and (b) exempt any Holder who acquires securities in accordance with Section
3.1(a) from being deemed an "Acquiring Person" under the Rights Agreement.
SECTION 3.3 Dispositions. So long as the Holders Beneficially Own Voting
Securities representing in the aggregate at least 10% of the Total Voting Power
of the Company, the Holders shall not, directly or indirectly (including,
without limitation, through the disposition or transfer of any equity interest
in another Person), sell, assign, transfer, pledge, hypothecate, grant any
option with respect to or otherwise dispose of any interest in (or enter into an
agreement or understanding with respect to the foregoing) any Voting Securities
(a "Disposition"), except as set forth below in this Section 3.3 (each such
exception being hereinafter referred to as a "Permitted Disposition"):
(a) Pro rata Dispositions of Common Stock may be made to any direct or
indirect partner, investor or participant of any Holder pursuant to the terms of
the limited partnership agreement, operating agreement or similar agreement of
such Holder.
(b) Dispositions of Voting Securities may be made to any Person
pursuant to (i) a public offering effected in accordance with the Registration
Rights Agreement, (ii) in open market "brokers' transactions" or transactions
directly with a "market maker" as permitted by the provisions of Rule 144 as
currently promulgated under the Securities Act, and (iii) in
privately-negotiated transactions to (A) an Institutional Investor or (B) any
other Person if such Disposition is approved by the Board ("Other Transferee")
(which such approval shall not be unreasonably withheld, provided that such
Disposition is not made to a Competitor); provided, that no Disposition shall be
made pursuant to clause (iii) of this Section 3.3(b) unless such Institutional
Investor or Other Transferee agrees in writing to be bound by the terms of this
Agreement.
(c) Dispositions of Voting Securities may be made to any Affiliate of
an Investor, provided that such Affiliate agrees to be bound by the terms of
this Agreement.
(d) Dispositions of Voting Securities may be made pursuant to a
Third-Party Offer, tender offer, exchange offer, merger, consolidation or any
other transaction (x) which is recommended to stockholders of the Company by the
Board of Directors (or, in the case of a tender or exchange offer, which is not
within 10 business days of the commencement thereof opposed by the Board of
Directors) or (y) in the case of a merger or other business combination
transaction, which has been approved by the stockholders of the Company.
SECTION 3.4 Anti-Takeover Provisions and Permitted Disposition. The Board
of Directors shall take all action necessary to: (a) exempt from the provisions
of DGCL Section 203 any Permitted Disposition made to any Institutional Investor
or Other Transferee pursuant to Section 3.3 (b)(iii), and (b) exempt any
Institutional Investor or Other Transferee who acquires Voting Securities
pursuant to Section 3.3 (b)(iii) from being deemed an "Acquiring Person" under
the Rights Agreement.
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ARTICLE IV
ADDITIONAL COVENANTS
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SECTION 4.1 Certain Information. For so long as any Series B Designee is a
Director, upon the request of any Investor, the Company will deliver to a Series
B Designee on behalf of such Investor: (a) for each calendar month, as soon as
practicable and in any event within 30 calendar days after the close of each
such month copies of (i) (A) the balance sheet of the Company as of the end of
such month, (B) statements of operations of the Company for such month, and (C)
statements of changes in cash flows of the Company for such month, setting forth
in each case in comparative form the corresponding figures for the Budget, for
the year-to-date and for the comparable periods in the preceding year (month and
year-to-date); (b) as soon as practicable and in any event not less than 30
calendar days prior to the end of each fiscal year of the Company, a proposed
annual operating budget for the Company for the succeeding fiscal year,
containing forecasts of profit and loss and cash flow with monthly and quarterly
breakdowns and management's reasonably estimated projections of indebtedness and
commitments for the succeeding fiscal year (the "Budget"); (c) on a quarterly
basis, within 45 calendar days after the close of each quarter, the report in
the form annexed hereto as Exhibit A, and (d) any and all other information as
any Investor may, from time to time, reasonably request.
SECTION 4.2 Right to Participate in Sale and Third-Party Bid. During the
Standstill Period, any Holder that Beneficially Owns in excess of 10% of the
Voting Securities shall be given the reasonable opportunity to participate in
any bidding process in connection with a Sale or Third-Party Bid. Nothing
contained herein requires that the Board of Directors accept any offer by the
Holders in connection with a Sale or Third-Party Bid.
SECTION 4.3 Preemptive Rights.
(a) For so long as at least 50% of the originally issued shares of
Series B Stock remain outstanding, prior to the issuance or sale of any shares
of Voting Securities or Derivative Securities (other than Excluded Shares) (all
such securities, other than Excluded Shares, are referred to collectively herein
as "Additional Securities"), the Company shall first give to each Holder holding
shares of Series B Stock the opportunity (such opportunity being herein referred
to as the "Preemptive Right") to purchase (on the same terms as such Additional
Securities are proposed to be sold) the same percentage of such Additional
Securities proposed to be sold by the Company as equals the percentage equal to
the quotient of (i) the number of shares of Common Stock into which the shares
held by such Holder of Series B Stock could be converted, divided by (ii) the
sum of (A) all the outstanding shares of Common Stock of the Company and (B) the
number of shares of Common Stock into which all the shares of Series B Stock
held by all Holders could be converted.
(b) At least 15 days prior to the issuance by the Company of any
Additional Securities, the Company shall give written notice thereof (the
"Preemptive Notice") to each Holder. The Preemptive Notice shall specify (i) the
name and address of the bona fide investor (if known) to whom the Company
proposes to issue or sell Additional Securities, (ii) the total amount of
capital to be raised by the Company pursuant to the issuance or sale of
Additional
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Securities, (iii) the number of such Additional Securities proposed to be issued
or sold, (iv) the price and other terms of their proposed issuance or sale, (v)
the number of such Additional Securities which such Holder is entitled to
purchase (determined as provided in Section 4.3(a)), and (vi) the period during
which such Holder may elect to purchase such Additional Securities, which period
shall extend for at least 15 days following the receipt by such Holder of the
Preemptive Notice (the "Preemptive Acceptance Period"). Each Holder who desires
to purchase Additional Securities shall notify the Company within the Preemptive
Acceptance Period of the number of Additional Securities he wishes to purchase,
as well as the number, if any, of extra Additional Securities he would be
willing to purchase in the event that all of the Additional Securities subject
to the Preemptive Right are not subscribed for by the other Holders (the
"Preemptive Acceptance Notice").
(c) In the event a Holder declines to subscribe for all or any part of
its pro rata portion of any Additional Securities which are subject to the
Preemptive Right (the "Declining Preemptive Purchaser") during the Preemptive
Acceptance Period, then the other Holders shall have the right to subscribe for
all (or any declined part) of such Declining Preemptive Purchaser's pro rata
portion of such Additional Securities (to be divided among the other Holders
desiring to exercise such right on a ratable basis) (the "Overallotment Right").
Each Holder's Overallotment Right, if any, shall be deemed to be exercised on
the date the Preemptive Acceptance Notice is given.
(d) After the conclusion of the Preemptive Acceptance Period, any
Additional Securities, less any Additional Securities for which Preemptive
Rights or Overallotment Rights are exercised, may be sold by the Company, within
a period of 4 months after the expiration of the Preemptive Acceptance Period,
to any other Person or Persons at not less than the price and upon other terms
and conditions not less favorable to the Company than those set forth in the
Preemptive Notice.
(e) Notwithstanding anything to the contrary contained herein, if the
Company issues, pursuant to a rights offering, rights to acquire shares of
Common Stock or other securities to holders of Common Stock, then the Holders of
Series B Stock shall be entitled to receive that kind and number of rights which
such Holder would have been entitled to receive if the Holder had held the
Common Stock issuable upon conversion of its Series B Stock as of the date a
record is taken of the holders of Common Stock for the purpose of receiving such
distribution (or if no such record is taken, the earlier of the date of such
declaration, payment or other distribution).
SECTION 4.4 Restricted Actions.
(a) The Company shall not amend, modify or supplement any provision of
the Rights Agreement in a manner that adversely affects the rights and benefits
of any Holder under any such provision.
(b) Notwithstanding anything to the contrary contained herein, for so
long as at least 50% of the originally issued shares of Series B Stock is held
by the Investors, the Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, without the prior written consent of at
least a majority of the then-outstanding shares of Series B Stock: (i) take
12
any action, or fail to take any action, that would have the effect of
substantially altering the business of the Company and its Subsidiaries as such
businesses are conducted as of the Closing Date after giving effect to the
transactions contemplated by the CK Purchase Agreement; or (ii) effect any sale,
conveyance or other disposition of, or encumbrance upon, all or substantially
all of the property, assets or business of the Company or merge with or into or
consolidate with any other corporation or entity or entities, or effect any
transaction or series of related transactions in which more than 50% of the
capital stock or Total Voting Power is transferred or disposed of, or effect any
voluntary dissolution or liquidation or effect a reorganization in any form of
transaction (including, without limitation, any reorganization into a limited
liability company, a partnership or any other non-corporate entity which is
treated as a partnership for federal income tax purposes).
ARTICLE V
TERMINATION
-----------
SECTION 5.1 Termination. Without limiting any liability of the Company or
the Holders for any breach of its obligations hereunder, this Agreement may be
terminated: (i) if the Company and the Holders holding a majority of the Voting
Securities mutually agree in writing; (ii) with respect to the Investors, by
notice in writing at any time when the Investors Beneficially Own in the
aggregate less than 10% of the Total Voting Power of the Company, and with
respect to any other Holder, by notice in writing at any time by such Holder,
when such Holder has ceased to Beneficially Own at least 10% of the Total Voting
Power of the Company; (iii) at any time on or after the Redemption Date; or (iv)
if the Company causes the conversion of all of the shares of Series B Stock into
shares of Common Stock pursuant to Section 6(b) of the Certificate of
Designations; provided, however, that, for purposes of this clause (iv), the
restrictions set forth in Section 3.1 shall continue to be in full force and
effect unless, or until, this Agreement has been, or is, terminated pursuant to
clause (i), (ii) or (iii) of this Section 5.1.
ARTICLE VI
MISCELLANEOUS
-------------
SECTION 6.1 Amendment and Modification. This Agreement may be amended,
modified and supplemented, and any of the provisions contained herein may be
waived, only by a written instrument signed by the Company and by the Holders
owning at least a majority of the outstanding Voting Securities owned by all
Holders. No course of dealing between or among any Persons having any interest
in this Agreement will be deemed effective to modify, amend or discharge any
part of this Agreement or any rights or obligations of any Person under or by
reason of this Agreement.
SECTION 6.2 Assignment; No Third Party Beneficiaries.
(a) Neither this Agreement, nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether by
operation of Law or otherwise) without the prior written consent of the other
parties; provided, however that (i) each Investor may assign its rights,
interests and obligations under this Agreement to any other Investor and to
(except
13
for Sections 2.4, 4.1 and 4.4(b)) any Institutional Investor, Other Transferee,
or Affiliate of such Investor in connection with a transfer of Voting Securities
to such Person, and (ii) in the event of such assignment, the assignee shall
agree in writing to be bound by the provisions of this Agreement.
(b) This Agreement shall not confer any rights or remedies upon any
Person other than the parties to this Agreement and their respective successors
and permitted assigns.
SECTION 6.3 Binding Effect; Entire Agreement. 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 assigns and executors, administrators
and heirs. This Agreement sets forth the entire agreement and understanding
between the parties as to the subject matter hereof and merges and supersedes
all prior discussions, agreements and understandings of any and every nature
among them.
SECTION 6.4 Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable Law, such provision(s) shall be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms so long as the economic or legal substance of the
transactions contemplated by this Agreement are not affected in any manner
materially adverse to any party.
SECTION 6.5 Notices and Addresses. Any notice, demand, request, waiver, or
other communication under this Agreement shall be in writing and shall be deemed
to have been duly given on the date of service, if personally served or sent by
facsimile; on the business day after notice is delivered to a courier or mailed
by express mail, if sent by courier delivery service or express mail for next
day delivery; and on the third day after mailing, if mailed to the party to whom
notice is to be given, by first class mail, registered, return receipt
requested, postage prepaid and addressed as follows:
If to the Company:
▇▇▇▇▇▇▇▇-Van Heusen Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Vice President, General Counsel and Secretary
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
14
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Investor, at the most current address, and with a copy to be sent
to each additional address, given by such Investor to the Company in writing,
and copies (which shall not constitute notice) sent to:
▇▇▇▇▇▇▇ Berlin Shereff ▇▇▇▇▇▇▇▇, LLP
The Chrysler Building
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 6.6 Governing Law. This Agreement and (unless otherwise provided)
all amendments hereof and waivers and consents hereunder shall be governed by
the internal Laws of the State of New York, without regard to the conflicts of
Law principles thereof which would specify the application of the Law of another
jurisdiction.
SECTION 6.7 Headings. The headings in this Agreement are for convenience of
reference only and shall not constitute a part of this Agreement, nor shall they
affect their meaning, construction or effect.
SECTION 6.8 Counterparts. This Agreement may be executed via facsimile and
in any number of counterparts, each of which shall be deemed to be an original
instrument and all of which together shall constitute one and the same
instrument.
SECTION 6.9 Further Assurances. Each party shall cooperate and take such
action as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
SECTION 6.10 Remedies. In the event of a breach or a threatened breach by
any party to this Agreement of its obligations under this Agreement, any party
injured or to be injured by such breach will be entitled to specific performance
of its rights under this Agreement or to injunctive relief, in addition to being
entitled to exercise all rights provided in this Agreement and granted by Law,
it being agreed by the parties that the remedy at Law, inducing monetary
damages, for breach of any such provision will be inadequate compensation for
any loss and that any defense or objection in any action for specific
performance or injunctive relief that a remedy at Law would be adequate is
waived.
SECTION 6.11 Jurisdiction. Each of the Investors and the Company (a) hereby
irrevocably and unconditionally submits to the exclusive jurisdiction of any
state or federal court sitting in New York County, New York for the purposes of
any suit, action or other proceeding arising out of this Agreement or the
subject matter hereof brought by the Company, or any Investor and (b) hereby
waives and agrees not to assert, by way of motion, as a defense, or otherwise,
in any
15
such suit, action or proceeding, any claim that it is not subject
personally to the jurisdiction of the above-named courts, that its property is
exempt or immune from attachment or execution, that the suit, action or
proceeding is brought in an inconvenient forum, that the venue of the suit,
action or proceeding is improper or that this Agreement or the subject matter
hereof may not be enforced in or by such court.
[Signature Page Follows.]
16
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date and year first above written.
▇▇▇▇▇▇▇▇-VAN HEUSEN CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President, General Counsel,
Secretary
APAX EXCELSIOR VI, L.P.
By: Apax Excelsior VI Partners, L.P.,
Its General Partner
By: Apax Managers, Inc.
Its General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
APAX EXCELSIOR VI-A C.V.
By: Apax Excelsior VI Partners, L.P.,
Its General Partner
By: Apax Managers, Inc.
Its General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
APAX EXCELSIOR VI-B C.V.
By: Apax Excelsior VI Partners, L.P.,
Its General Partner
By: Apax Managers, Inc.
Its General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
17
PATRICOF PRIVATE INVESTMENT CLUB III, L.P.
By: Apax Excelsior VI Partners, L.P.,
Its General Partner
By: Apax Managers, Inc.
Its General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
APAX EUROPE V - A, L.P.
By: Apax Partners Europe Managers Ltd.
Its Investment Manager
By: /s/ ▇▇▇▇▇▇ Beercroft
--------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
APAX EUROPE V - B, L.P.
By: Apax Partners Europe Managers Ltd.
Its Investment Manager
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
18
APAX EUROPE V - C GmbH & Co. KG
By: Apax Partners Europe Managers Ltd.
Its Investment Manager
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
APAX EUROPE V - D, L.P.
By: Apax Partners Europe Managers Ltd.
Its Investment Manager
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
APAX EUROPE V - E, L.P.
By: Apax Partners Europe Managers Ltd.
Its Investment Manager
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
19
APAX EUROPE V - F, C.V.
By: Apax Partners Europe Managers Ltd.
Its Investment Manager
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
APAX EUROPE V - G, C.V.
By: Apax Partners Europe Managers Ltd.
Its Investment Manager
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
APAX EUROPE V - 1, L.P.
By: Apax Partners Europe Managers Ltd.
Its Investment Manager
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
20
APAX EUROPE V - 2, L.P.
By: Apax Partners Europe Managers Ltd.
Its Investment Manager
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
21
