Document:

Exhibit 4.4

 

VOTING AGREEMENT

 

THIS VOTING AGREEMENT, dated as of [              ], 2013, is entered into by and among (i) the individuals listed on Schedule 1 attached hereto (collectively, the “Management Stockholders”) and (ii) the entities listed on Schedule 2 attached hereto (collectively, the “LGP Stockholders” and, together with the Management Stockholders, the “Principal Stockholders”).  Capitalized terms used herein without definition shall have the meanings set forth in Section 1.1.

 

W I T N E S S E T H:

 

WHEREAS, the parties desire to set forth their agreement with respect to the voting for members of the board of directors of The Container Store Group, Inc., a corporation organized under the laws of Delaware (the “Company”), in connection with their respective investments in the Company;

 

NOW, THEREFORE, in consideration of the mutual agreements and understandings set forth herein, the parties hereto hereby agree as follows:

 

ARTICLE I

 

CERTAIN DEFINITIONS

 

SECTION 1.1 Definitions As used in this Agreement, the following terms shall have the following respective meanings:

 

“Agreement” shall mean this Voting Agreement as in effect on the date hereof and as hereafter from time to time amended, modified or supplemented in accordance with the terms hereof.

 

“Board of Directors” shall mean the Board of Directors of the Company.

 

“Common Shares” shall mean the shares of common stock, par value $0.01 per share, of the Company.

 

“Director” shall mean a member of the Board of Directors.

 

“Effective Date” shall have the meaning set forth in Section 4.10.

 

“Initial Public Offering” means the first public offering and sale of equity securities of the Company pursuant to an effective registration statement under the Securities Act of 1933, as amended.

 

“LGP Directors” shall mean the persons affiliated with the LGP Stockholders who are nominated for election as a Director.  The initial LGP Directors shall be Jonathan D. Sokoloff, Timothy J. Flynn and J. Kristopher Galashan.

 

“Management Directors” shall mean Kip Tindell, Sharon Tindell and Melissa Reiff.

 

 

“Person” shall mean an individual, corporation, company, limited liability company, association, partnership, joint venture, organization, business, trust or any other entity or organization, including a government or any subdivision or agency thereof.

 

“Shares” shall mean (i) the Common Shares issued and outstanding at the Effective Date and (ii) any Common Shares hereafter acquired by any Principal Stockholder or pursuant to conversion or exercise of any option, convertible security or warrant or other right to acquire Common Shares, whether or not held by any of the Principal Stockholders as of such date.

 

“Voting Shares” shall mean shares of the Company of any class or classes, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of corporate directors (or Persons performing similar functions).

 

ARTICLE II

 

CORPORATE GOVERNANCE

 

SECTION 2.1 Board of Directors.  Each Principal Stockholder hereby agrees to vote all Shares owned or held of record by such Principal Stockholder at each annual or special meeting of stockholders of the Company at which Directors of the Company are to be elected, in favor of, or to take all actions by written consent in lieu of any such meeting as are necessary, to cause the election as members of the Board of Directors of the LGP Directors and the Management Directors to the extent such persons are nominated for election as a Director by the Nominating and Corporate Governance Committee of the Board of Directors.

 

SECTION 2.2 Restrictions on Other Agreements.  No Principal Stockholder shall grant any proxy or enter into or agree to be bound by any voting trust agreement, or arrangement of any kind with any Person with respect to its Shares if and to the extent the terms thereof conflict with the provisions of this Agreement (whether or not such proxy, voting trust, agreements or arrangements are with other Principal Stockholders, holders of Common Shares that are not parties to this Agreement or otherwise).

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

Each of the parties to this Agreement hereby represents and warrants to each other party to this Agreement that as of the date such party executes this Agreement:

 

SECTION 3.1 Existence; Authority; Enforceability.  Such party has the power and authority to enter into this Agreement and to carry out its obligations hereunder.  If such party is an entity, it is duly organized and validly existing under the laws of its jurisdiction of organization, and the execution of this Agreement, and the consummation of the transactions contemplated herein, have been authorized by all necessary action, and no other act or proceeding on its part is necessary to authorize the execution of this Agreement or the consummation of any of the transactions contemplated hereby.  If such party is a natural person, such person has full capacity to contract.  This Agreement has been duly executed by each of the parties hereto and constitutes his or its legal, valid and binding obligation, enforceable against

 

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him or it in accordance with its terms except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws relating to or affecting creditors’ rights generally, or by the general principles of equity.  No representation is made by any party with respect to the regulatory effect of this Agreement, and each of the parties has had an opportunity to consult with counsel as to his or its rights and responsibilities under this Agreement.  No party makes any representation to any other party as to future law or regulation or the future interpretation of existing laws or regulations by any governmental authority or self-regulatory organization.

 

SECTION 3.2 Absence of Conflicts.  The execution and delivery by such party of this Agreement and the performance of its obligations hereunder does not and will not (i) conflict with, or result in the breach of, any provision of the constitutive documents of such party, if any; (ii) result in any violation, breach, conflict, default or event of default (or an event which with notice, lapse of time, or both, would constitute a default or event of default), or give rise to any right of acceleration or termination or any additional payment obligation, under the terms of any contract, agreement or permit to which such party is a party or by which such party’s assets or operations are bound or affected; or (iii) violate any law applicable to such party.

 

SECTION 3.3 Consents.  Other than any consents which have already been obtained, no consent, waiver, approval, authorization, exemption, registration, license or declaration is required to be made or obtained by such party in connection with the execution, delivery or performance of this Agreement.

 

ARTICLE IV

 

MISCELLANEOUS

 

SECTION 4.1 Termination.  This Agreement shall terminate and be of no further force and effect upon (a) the Management Stockholders and the LGP Stockholders ceasing to collectively own at least 40% of the Voting Shares of the Company then outstanding, (b) the written agreement of the Management Stockholders, on the one hand, and the LGP Stockholders, on the other hand, to terminate this Agreement or (c) its provisions become illegal or are interpreted by any governmental authority to be illegal, or any exchange on which the Company’s Common Shares are traded asserts that its existence will threaten the continued listing of the Company’s Common Shares on such exchange.

 

SECTION 4.2 Successors and Assigns; Beneficiaries.  Except as otherwise provided herein, all of the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the respective successors and permitted assigns of the parties hereto.

 

SECTION 4.3 Amendment and Modification; Waiver of Compliance.

 

(a) This Agreement may be amended only by a written instrument duly executed by the Management Stockholders and the LGP Stockholders.

 

(b) Except as otherwise provided in this Agreement, any failure of any of the parties to comply with any obligation, covenant, agreement or condition herein may be waived by the party

 

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entitled to the benefits thereof only by a written instrument signed by the party granting such waiver, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure.

 

SECTION 4.4 Notices.  Any notice, request, claim, demand, document and other communication hereunder to any party shall be effective upon receipt (or refusal of receipt) and shall be in writing and delivered personally or sent by facsimile, or first class mail, or by Federal Express, United Parcel Service or other similar courier or other similar means of communication, as follows:

 

(i)                                     If to the Management Stockholders, addressed to The Container Store Group, Inc.; 500 Freeport Parkway; Coppell, TX 75019; Attn:  Kip Tindell; and

 

(ii)                                  If to the LGP Stockholders, addressed to Green Equity Investors V, L.P.; 11111 Santa Monica Boulevard, Suite 2000; Los Angeles, CA 90025; Attention:  Tim Flynn; Facsimile No.:  310-954-0404; with a copy (which shall not constitute notice) to Latham & Watkins LLP; 885 Third Avenue; New York, New York 10022; Attention: Howard A. Sobel, Esq. and John Giouroukakis, Esq.; Facsimile No.:  212-751-4864.

 

or, in each case, to such other address or facsimile number as such party may designate in writing to each Stockholder by written notice given in the manner specified herein.

 

All such communications shall be deemed to have been given, delivered or made when so delivered by hand or sent by facsimile (with confirmed transmission), on the next business day if sent by overnight courier service (with confirmed delivery) or when received if sent by first class mail.

 

SECTION 4.5 Entire Agreement.  The provisions of this Agreement and the other writings referred to herein or delivered pursuant hereto which form a part hereof contain the entire agreement among the parties hereto with respect to the subject matter hereof and supersede all prior oral and written agreements and memoranda and undertakings among the parties hereto with regard to such subject matter, including the Stockholders Agreement, dated as of August 16, 2007, by and among the Company, the Management Stockholders, the LGP Stockholders and the other stockholders of the Company.

 

SECTION 4.6 CHOICE OF LAW AND VENUE; WAIVER OF RIGHT TO JURY TRIAL.  THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE.  EACH OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT IN THE EVENT OF ANY BREACH OF THIS AGREEMENT, THE NON-BREACHING PARTY WOULD BE IRREPARABLY HARMED AND COULD NOT BE MADE WHOLE BY MONETARY DAMAGES, AND THAT, IN ADDITION TO ANY OTHER REMEDY TO WHICH THEY MAY BE ENTITLED AT LAW OR IN EQUITY, THE PARTIES SHALL BE ENTITLED TO SUCH EQUITABLE OR INJUNCTIVE RELIEF AS MAY BE APPROPRIATE.  THE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT OF ANY JUDGMENT

 

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OF A DELAWARE FEDERAL OR STATE COURT, OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SUCH A JUDGMENT, IN ANY OTHER APPROPRIATE JURISDICTION.

 

IN THE EVENT ANY PARTY TO THIS AGREEMENT COMMENCES ANY LITIGATION, PROCEEDING OR OTHER LEGAL ACTION IN CONNECTION WITH OR RELATING TO THIS AGREEMENT, ANY RELATED AGREEMENT OR ANY MATTERS DESCRIBED OR CONTEMPLATED HEREIN OR THEREIN, THE PARTIES TO THIS AGREEMENT HEREBY (1) AGREE UNDER ALL CIRCUMSTANCES ABSOLUTELY AND IRREVOCABLY TO INSTITUTE ANY LITIGATION, PROCEEDING OR OTHER LEGAL ACTION IN A COURT OF COMPETENT JURISDICTION LOCATED WITHIN THE STATE OF DELAWARE, WHETHER A STATE OR FEDERAL COURT; (2) AGREE THAT IN THE EVENT OF ANY SUCH LITIGATION, PROCEEDING OR ACTION, SUCH PARTIES WILL CONSENT AND SUBMIT TO THE PERSONAL JURISDICTION OF ANY SUCH COURT DESCRIBED IN CLAUSE (1) OF THIS SECTION AND TO SERVICE OF PROCESS UPON THEM IN ACCORDANCE WITH THE RULES AND STATUTES GOVERNING SERVICE OF PROCESS (IT BEING UNDERSTOOD THAT NOTHING IN THIS SECTION SHALL BE DEEMED TO PREVENT ANY PARTY FROM SEEKING TO REMOVE ANY ACTION TO A FEDERAL COURT IN THE STATE OF DELAWARE); (3) AGREE TO WAIVE TO THE FULL EXTENT PERMITTED BY LAW ANY OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH LITIGATION, PROCEEDING OR ACTION IN ANY SUCH COURT OR THAT ANY SUCH LITIGATION, PROCEEDING OR ACTION WAS BROUGHT IN ANY INCONVENIENT FORUM; (4) AGREE, AFTER CONSULTATION WITH COUNSEL, TO WAIVE ANY RIGHTS TO A JURY TRIAL TO RESOLVE ANY DISPUTES OR CLAIMS RELATING TO THIS AGREEMENT; (5) AGREE TO SERVICE OF PROCESS IN ANY LEGAL PROCEEDING BY MAILING OF COPIES THEREOF TO SUCH PARTY AT ITS ADDRESS SET FORTH HEREIN FOR COMMUNICATIONS TO SUCH PARTY; (6) AGREE THAT ANY SERVICE MADE AS PROVIDED HEREIN SHALL BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (7) AGREE THAT NOTHING HEREIN SHALL AFFECT THE RIGHTS OF ANY PARTY TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

 

SECTION 4.7 Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

SECTION 4.8 Further Assurances.  At any time or from time to time after the date hereof, the parties hereto agree to cooperate with each other, and at the request of any other party, to execute and deliver any further instruments or documents and to take all such further action as any other party may reasonably request in order to evidence or effectuate the provisions of this Agreement and to otherwise carry out the intent of the parties hereunder.

 

SECTION 4.9 Schedule 13D.  In accordance with the requirements of Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and subject to the limitations set forth therein, each party hereto agrees to file an appropriate Schedule 13D no later than 10 calendar days following the Effective Date.

 

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SECTION 4.10 Effectiveness of Agreement.  Upon the closing of the Initial Public Offering, the Agreement shall thereupon be deemed to be effective (such date, the “Effective Date”).  However, to the extent the closing of such Initial Public Offering does not occur, the provisions of this Agreement shall be without any force or effect.

 

*       *       *

 

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IN WITNESS WHEREOF, each of the undersigned has signed this Agreement as of the date first above written:

 

 

	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   Kip Tindell
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   Sharon Tindell
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   Melissa Reiff
    

 

Signature Page to Voting Support Agreement

 

 

	
 
    	
GREEN EQUITY INVESTORS V, L.P.
    
	
 
    	
 
    
	
 
    	
By: GEI Capital V, LLC,
    
	
 
    	
its General Partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
GREEN EQUITY INVESTORS   SIDE V, L.P.
    
	
 
    	
 
    
	
 
    	
By: GEI Capital V, LLC,
    
	
 
    	
its General Partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
TCS   CO-INVEST LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

Signature Page to Voting Support Agreement

 

 

SCHEDULE 1

 

MANAGEMENT STOCKHOLDERS

 

Kip Tindell

 

Sharon Tindell

 

Melissa Reiff

 

 

SCHEDULE 2

 

LGP STOCKHOLDERS

 

Jonathan D. Sokoloff

 

Timothy J. Flynn

 

J. Kristofer GalashanExhibit 4.5

 

Dear Stockholder:

 

All of us at The Container Store are so excited to begin this journey with you as we embark on the steps toward our anticipated Initial Public Offering (“IPO”). Through this transaction we know that our culture will continue to thrive and that many opportunities are ahead of us as we continue to work, together with you, to make The Container Store the best place to work and shop. Please read this letter carefully because there is important information we need to provide you regarding your current company stock. In addition, there are important steps you must take before October 10, 2013. If you have any questions as you review this letter, please contact Jennifer Franklin at 972-538-6835.

 

On September 30, 2013, The Container Store Group, Inc. (the “Company”) publicly filed a Registration Statement (the “Registration Statement”), relating to the proposed IPO of its common stock (the “Company Common Stock”). The Company plans to list the Company Common Stock on the New York Stock Exchange under the ticker symbol “TCS”. The number of shares to be sold and the price range for the proposed IPO have not yet been determined.

 

There are two important changes that will affect your stock ownership:

 

1)             A mandatory exchange of your shares of the Company’s senior and junior preferred stock into shares of Company Common Stock.

2)             The transition from the use of physical certificates representing Company Common Stock to recording your ownership of shares in book-entry (i.e., electronic) form at the Company’s new transfer agent, American Stock Transfer & Trust Company.

 

In connection with this mandatory exchange and the transition to book-entry shares, you will need to return to the Company your certificates of Company senior and junior preferred stock and Company Common Stock. Please use the enclosed pre-paid UPS overnight envelope by October 10, 2013. Please see the detailed Instructions at the end of this letter for more information.

 

The Payment of a Dividend on Your Company Preferred Stock

 

But first, we would like to tell you about a dividend that the Company expects to pay on your Company preferred stock. As described in greater detail in the Registration Statement, upon the closing of the IPO, the Company anticipates paying a cash dividend in an aggregate amount to be determined (the “Dividend”) as follows: (i) first, on a pro rata basis to the holders of shares of the Company’s 12% senior cumulative preferred stock (the “Senior Preferred Stock”), which will reduce the liquidation preference of such Senior Preferred Stock to $1,000.00 per share and (ii) second, the remainder of such dividend on a pro rata basis to the holders of shares of the Company’s 12% junior cumulative preferred stock (the “Junior Preferred Stock”), which will reduce the liquidation preference of each such share of the Junior Preferred Stock. As of September 30, 2013, the liquidation preference on (i) the Senior Preferred Stock was $1,614.28 per share and (ii) the Junior Preferred Stock was $2,084.77 per share. Dividend payments should arrive in your account shortly after the closing. We anticipate sending an update to all stockholders prior to closing informing them of the estimated amount of their dividend.

 

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All of the holders of the Company’s Senior Preferred Stock received a dividend in April earlier this year. If any of your payment information has changed since that dividend payment, please contact Jennifer Franklin immediately at 972-538-6835.

 

The Exchange of Your Preferred Stock for Company Common Stock

 

As further described in the Registration Statement, pursuant to Section 1.10 of the stockholders agreement, dated as of August 16, 2007, by and among the stockholders of the Company and the Company, (as may be amended from time to time, the “Stockholders Agreement”), a fund affiliated with Leonard Green & Partners, our largest stockholder, delivered a notice to the Company to have the Company engage in an IPO. Pursuant to the Stockholders Agreement, upon the closing of the IPO and immediately following the payment of the Dividend, the Company will exchange (the “Exchange”) each outstanding share of Senior Preferred Stock and Junior Preferred Stock for a number of shares of Company Common Stock determined by dividing (a) the remaining liquidation preference amount of such share of preferred stock by (b) the initial public offering price in the IPO.

 

Following the Exchange, all shares of Senior Preferred Stock and Junior Preferred Stock will be immediately retired and cancelled, and Company Common Stock will be the only class of capital stock of the Company that will remain outstanding.

 

In order to exchange your shares, you must deliver the certificates representing your Senior Preferred Stock and Junior Preferred Stock (the “Preferred Stock Certificates”) to the Company, together with your completed and signed Letter of Transmittal and Exchange, no later than October 10, 2013. Please contact Jennifer Franklin at 972-538-6835 as soon as possible if any of your Preferred Stock Certificates have been lost, stolen or destroyed, or if you have any questions.

 

Please note, the actual initial public offering price and the amount of the Dividend will be determined by the Board of Directors of the Company prior to completion of the IPO. Your right to receive shares of Company Common Stock in exchange for your surrendered Preferred Stock Certificates is contingent upon the completion of the IPO. In the event the IPO is not completed, your Preferred Stock Certificates will be returned to you and you will have no further rights to receive shares of Company Common Stock in exchange for shares of Senior Preferred Stock and Junior Preferred Stock.

 

Please be aware that the final exchange ratio of the Senior Preferred Stock and Junior Preferred Stock will be determined based on the final initial public offering price and the amount of dividends paid. In addition, the final exchange ratio of the Senior Preferred Stock and Junior Preferred Stock will be calculated using the liquidation preference as of the closing date of the IPO. The preliminary prospectus related to the Company’s Registration Statement for the IPO (the “Preliminary Prospectus”) will contain illustrations of the exchange ratio for the Senior Preferred Stock and Junior Preferred Stock. The Preliminary Prospectus will be sent to you when it is available.

 

The Company’s Transition to Book-Entry Shares

 

Upon the closing of the IPO, the Company will not issue and will no longer honor physical certificates representing shares of Company Common Stock. All shares of Company Common Stock, including the shares of Company Common Stock that you will receive upon the effectiveness of the Exchange, will be registered in book-entry (i.e., electronic) form at the Company’s new transfer agent, American Stock Transfer & Trust Company (“AST”). Book-entry registration eliminates the risks and costs 

 

 

associated with physical certificates such as storage, safety of securities and replacing lost or stolen certificates, and it permits electronic stock transactions between your broker and AST. While you will no longer receive or hold physical certificates for your shares of Company Common Stock, shortly after the closing of the Company’s IPO you will receive from AST a statement indicating the number of shares of Company Common Stock that you hold, including the shares of Company Common Stock you received in connection with the Exchange. The statement will also include information regarding how you can transfer your shares, including to your brokerage account.

 

In order to assist the Company with this transition, we ask that you also return the certificate representing your Company Common Stock (the “Common Stock Certificate”) by the October 10, 2013 deadline. Please contact Jennifer Franklin at 972-538-6835 as soon as possible if your Common Stock Certificate has been lost, stolen or destroyed or if you have any questions.

 

Representations and Warranties

 

You hereby represent and warrant as follows:

 

You are the registered holder of the shares of Senior Preferred Stock, Junior Preferred Stock and Company Common Stock represented by the Preferred Stock Certificates and Common Stock Certificates you are enclosing with this Letter of Transmittal and Exchange, with good title to such shares of Senior Preferred Stock, Junior Preferred Stock and Company Common Stock and full power and authority to sell, assign and transfer the shares of Senior Preferred Stock, Junior Preferred Stock and Company Common Stock represented by the Preferred Stock Certificates and Common Stock Certificates you are enclosing with this Letter of Transmittal and Exchange, free and clear of any encumbrance, restriction on transfer (other than under any applicable federal or state securities laws), claim, lien, pledge, option, charge, security interest, defect of title or other similar right of any third party whether voluntarily exercised or arising by operation of law (“Lien”).

 

You have full power and authority (and, if an individual, legal capacity) to execute and deliver this Letter of Transmittal and Exchange and to perform your obligations hereunder. You have duly signed and delivered this Letter of Transmittal and Exchange, which constitutes your valid and legally binding obligation, enforceable in accordance with its terms and conditions. You are not required to give any notice to, make any filing or registration with, or obtain any authorization, waiver, license, consent, or approval of any governmental authority or third party in connection with your execution and delivery of this Letter of Transmittal and Exchange, your performance of your obligations hereunder or the consummation of the transactions contemplated by this Letter of Transmittal and Exchange. To the extent that the undersigned is an entity, the execution and delivery of this Letter of Transmittal and Exchange by the undersigned, the performance by the undersigned of its obligations hereunder, and the consummation by the undersigned of the transactions contemplated hereby, have been duly authorized by the Board of Directors or other managing body of the undersigned and no other corporate or other action, as the case may be, on the part of the undersigned is necessary to authorize the execution and delivery of this Letter of Transmittal and Exchange by the undersigned, the performance by the undersigned of its obligations hereunder or the consummation by the undersigned of the transactions contemplated hereby.

 

You will, upon request, sign any additional documents necessary or desirable to complete the surrender and exchange of the enclosed shares of Senior Preferred Stock and Junior Preferred Stock and the transition of the enclosed shares of Company Common Stock to book-entry shares. All authority conferred or agreed to be conferred in this Letter of Transmittal and Exchange will be binding upon your successors, 

 

 

assigns, heirs, executors, administrators and legal representatives and will not be affected by, and will survive, your death or incapacity.

 

You agree that in connection with the IPO, you may be required to not make any public sale or distribution of your shares of Company Common Stock, including any sale under Rule 144 or Rule 144A, or, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any Company Common Stock, any other securities of the Company or any securities convertible into or exchangeable or exercisable for any Company Common Stock without the prior written consent of the Company or the underwriters to the IPO, as the case may be, for 180 days following the closing date of the IPO (the “Holdback Period”). You would, however, be able to transfer Company Common Stock or other securities of the Company in accordance with Section 2.2 or Section 2.3 of the Stockholders Agreement, so long as any such Permitted Transferee (as defined in the Stockholders Agreement) or other transferee agrees to be subject to the Holdback Period. You will be advised at a later date if this restriction will be applied to you.

 

You understand that surrender is not made in acceptable form until receipt by the Company of this Letter of Transmittal and Exchange, or a facsimile hereof, duly completed and signed, together with all accompanying evidences of authority in form satisfactory to the Company. All questions as to validity, form and eligibility of the surrender of any Preferred Stock Certificates and Common Stock Certificates hereunder will be determined by the Company and such determination will be final and binding on all parties.

 

As we mentioned earlier, we are excited about the many opportunities for our Company. Together with you, we anticipate great things in the future. There are two copies of this letter enclosed. Sign one of the copies evidencing the exchange of the stock under the mandatory exchange and the Company’s transition to book-entry shares and return it to the Company. Please keep the second copy for your own records. Also complete and return the attached form entitled Surrendered Stock identifying the Preferred Stock Certificates and Common Stock Certificates you are surrendering.

 

	
Sincerely,
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Jodi   Taylor
    	
 
    
	
Chief   Financial Officer
    	
 
    
	
The   Container Store
    	
 
    

 

 

PLEASE SIGN HERE

 

	
X
    	
 
    	
 
    	
Dated:                         ,   2013
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Print Name Here)
    	
 
    	
 
    

 

(Must be signed by registered holder(s) exactly as name(s) appear(s) on stock certificates or person(s) authorized to whom the shares of Senior Preferred Stock, Junior Preferred Stock and Company Common Stock surrendered have been assigned and transferred as evidenced by endorsements or stock powers transmitted herewith. If signing is by a trustee, executor, administrator, guardian, officer of a corporation, attorney-in-fact or other person acting in a fiduciary or representative capacity, please set forth full title and enclose proper evidence of authority to so act.) (See Instruction 2).

 

	
 
    
	
(Area Code and Telephone Number)
    
	
 
    
	
 
    
	
(Email Address)
    
	
 
    
	
 
    
	
(Tax Identification or Social Security Number)
    

 

 

SURRENDERED STOCK

 

Please complete each of the following boxes.

 

DESCRIPTION OF CERTIFICATE OF

SENIOR PREFERRED STOCK SURRENDERED

 

	
Name(s) and   Address(es) of Registered Holder(s)
    	
 
    	
Certificate   Enclosed
    	
 
    	
 
    
	
 
    	
 
    	
Certificate   Number
    	
 
    	
Number   of Shares represented by Certificate
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
If   Registered Holder(s) is not an individual, please indicate the domicile   and type of entity (e.g., corporation, limited partnership, trust) and/or the   form of ownership (e.g., as joint tenants, tenants in the   entirety, etc.).
    	
 
    	
 
    	
 
    	
 
    

 

DESCRIPTION OF CERTIFICATE OF

JUNIOR PREFERRED STOCK SURRENDERED

 

	
Name(s) and   Address(es) of Registered Holder(s)
    	
 
    	
Certificate   Enclosed
    	
 
    	
 
    
	
 
    	
 
    	
Certificate   Number
    	
 
    	
Number   of Shares represented by Certificate
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
If   Registered Holder(s) is not an individual, please indicate the domicile   and type of entity (e.g., corporation, limited partnership, trust) and/or the   form of ownership (e.g., as joint tenants, tenants in the entirety, etc.).
    	
 
    	
 
    	
 
    	
 
    

 

DESCRIPTION OF CERTIFICATE OF

COMPANY COMMON STOCK SURRENDERED

 

	
Name(s) and   Address(es) of Registered Holder(s)
    	
 
    	
Certificate   Enclosed
    	
 
    	
 
    
	
 
    	
 
    	
Certificate   Number
    	
 
    	
Number   of Shares represented by Certificate
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
If   Registered Holder(s) is not an individual, please indicate the domicile   and type of entity (e.g., corporation, limited partnership, trust) and/or the   form of ownership (e.g., as joint tenants, tenants in the entirety, etc.).
    	
 
    	
 
    	
 
    	
 
    

 

o  Check here if any Preferred Stock Certificate or Common Stock Certificate has been lost, destroyed or mutilated. See Instruction 3. Number and type of shares represented by lost, destroyed or mutilated Certificate(s)                                                                                                                     .

 

 

INSTRUCTIONS

 

1.                                      GENERAL. When this Letter of Transmittal and Exchange has been properly filled-in, dated and signed, return it, together with your surrendered Preferred Stock Certificates and Common Stock Certificate (collectively, the “Certificates”), to the Company using the enclosed pre-paid UPS envelope. Please use this UPS envelope when returning your Certificates! If you choose not to use the enclosed UPS envelope, we recommend using registered mail, properly insured. Your completed and signed Letter of Transmittal and Exchange, together with the Certificates, must be received by the Company no later than October 10, 2013.

 

Until you have surrendered your Preferred Stock Certificates or a satisfactory affidavit relating to the loss of the Preferred Stock Certificates to the Company, you will not receive the shares of Company Common Stock to which you are entitled pursuant to the Exchange.

 

2.                                      SIGNATURE. The signature(s) required on this Letter of Transmittal and Exchange must be the signatures of the holders of the Certificates, exactly as the names of the holders appear on the Certificates, or, if the Certificates have been assigned, the signatures must be the signatures of the assignees, exactly as the names of the assignees appear on the instrument of assignment. If any of the shares of Senior Preferred Stock, Junior Preferred Stock or Company Common Stock surrendered hereby were held of record by two or more joint owners, all such owners must sign this Letter of Transmittal and Exchange and the form of joint ownership must be indicated. In case the endorsement is executed by an attorney, executor, administrator, guardian or other fiduciary, or by an officer of a corporation, the person executing the endorsement must give his or her full title in such capacity, and appropriate evidence of authority to act in such capacity must be forwarded with the Certificates surrendered. If the endorsement is executed by anyone other than the registered holders of the shares please provide legal documentation that will serve as appropriate evidence of authority to act.

 

You should complete one Letter of Transmittal and Exchange listing all Senior Preferred Stock, Junior Preferred Stock and Company Common Stock registered in the same name. If any shares of Senior Preferred Stock, Junior Preferred Stock or Company Common Stock are registered in different ways on several certificates, you will need to complete, sign, and submit as many separate Letters of Transmittal and Exchange as there are different registrations of certificates.

 

If you have any questions, please call Jennifer Franklin at 972-538-6835.

 

3.                                      LOST, STOLEN OR DESTROYED STOCK CERTIFICATES. If any Certificate(s) have been lost, stolen or destroyed, please check the appropriate box on page 6 of this Letter of Transmittal and Exchange, complete this Letter of Transmittal and Exchange, and deliver it to the Company in the enclosed pre-paid UPS envelope by October 10, 2013. The Company will then forward to you the documentation necessary to be completed in order for you to receive any payment and Company Common Stock to which you are entitled. In addition, please contact Jennifer Franklin at 972-538-6835 as soon as possible.

 

 

 

October 21, 2013

 

Dear               :

 

In my previous letter to you (the “Letter of Transmittal and Exchange”) I shared the exciting news about the proposed Initial Public Offering (“IPO”) by The Container Store Group, Inc. (the “Company”).  We have made more progress on that journey and wanted to give you an update.  On October 21, 2013, the Company filed Amendment No. 1 (“Amendment No. 1”) to the Registration Statement, relating to the IPO.  Amendment No. 1 includes the preliminary prospectus for the IPO, and provides for an offering of 12,500,000 shares of Company Common Stock with a price range per share of between $14.00 and $16.00.

 

As you may be aware, depending upon a variety of unknown market and other conditions, the final price of a company’s stock at IPO can move up or down.  So in order to be assured that our final IPO price does not in any way impact the value of your original investment in the Company’s Common Stock that you hold, we have ensured that, in the recapitalization transactions in connection with the IPO, you will receive value for your Common Stock at least equivalent to your initial investment in that Common Stock.  This requires that the following changes to the transactions described in the Letter of Transmittal and Exchange be made:

 

·                  If the initial public offering price in the IPO is less than $18.00, you will exchange your shares of the Company’s junior preferred stock into shares of Company Common Stock at a price that is higher than the initial public offering price in the IPO, as set forth below (your senior preferred stock will be exchanged at the initial public offering price in the IPO (as previously described in the Letter of Transmittal and Exchange)):

 

	
Initial public offering price per share 
    	
 
    	
$
    	
14.00
    	
 
    	
$
    	
15.00
    	
 
    	
$
    	
16.00
    	
 
    	
$
    	
17.00
    	
 
    	
$
    	
18.00
    	
 
    	
$
    	
19.00
    	
 
    
	
Junior preferred stock exchange price 
    	
 
    	
$
    	
19.94
    	
 
    	
$
    	
19.44
    	
 
    	
$
    	
18.92
    	
 
    	
$
    	
18.39
    	
 
    	
$
    	
18.00
    	
 
    	
$
    	
19.00
    	
 
    

 

·                  If the initial public offering price in the IPO is at least $18.00, you will exchange your shares of the Company’s junior preferred stock into shares of Company Common Stock at the initial public offering price in the IPO (as previously described in the Letter of Transmittal and Exchange).

 

This letter has been sent to you electronically so you can confirm your consent to the changes described above.  If you have any questions, please let us know.

 

If you have any questions as you review this update, please contact Jennifer Franklin at 972-538-6835.

 

As we mentioned previously, we are excited about the many opportunities for our Company. Together with you, we anticipate great things in the future.

 

	
Sincerely,
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Jodi   Taylor
    	
 
    
	
Chief   Financial Officer
    	
 
    
	
The   Container Store
    	
 
    

 

 

Signature block for letters signed via DocuSign:

 

I have received the Update to Letter of Transmittal and Exchange dated October 21, 2013 outlining changes to the transactions described in the Letter of Transmittal and Exchange and confirm my consent to such changes.  I acknowledge that my electronic signature shall have the same effect as an original signature.

 

	
 
    	
 
    	
 
    	
 
    	
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Employee   Number
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
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Signature block for letters signed manually:

 

PLEASE SIGN HERE TO CONFIRM YOUR CONSENT TO THE CHANGES DESCRIBED IN THIS UPDATE TO LETTER OF TRANSMITTAL AND EXCHANGE

 

 

	
X
    	
 
    	
 
    	
Dated:                          ,   2013
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Print   Name Here)

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