-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UG+mihmLjyulkluREWeFyIPgb0gyxUgMhQ6TFNrQSVHToVNGhkQ8d/owyqdXJO6F hr6M6JabJ4zbNB8l8+lQMQ== 0000919574-08-002673.txt : 20080430 0000919574-08-002673.hdr.sgml : 20080430 20080430170341 ACCESSION NUMBER: 0000919574-08-002673 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20080430 DATE AS OF CHANGE: 20080430 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: RESTORATION HARDWARE INC CENTRAL INDEX KEY: 0000863821 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-FURNITURE STORES [5712] IRS NUMBER: 680140361 STATE OF INCORPORATION: CA FISCAL YEAR END: 0201 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-54313 FILM NUMBER: 08790650 BUSINESS ADDRESS: STREET 1: 15 KOCH ROAD STREET 2: SUITE J CITY: CORTE MADERA STATE: CA ZIP: 94925 BUSINESS PHONE: 415-924-1005 MAIL ADDRESS: STREET 1: 15 KOCH ROAD STREET 2: SUITE J CITY: CORTE MADERA STATE: CA ZIP: 94925 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: VARDON CAPITAL MANAGEMENT, LLC CENTRAL INDEX KEY: 0001212718 IRS NUMBER: 134091779 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 120 WEST 45TH STREET / 17TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 212-626-6300 MAIL ADDRESS: STREET 1: 120 WEST 45TH STREET / 17TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10036 FORMER COMPANY: FORMER CONFORMED NAME: VARDON CAPITAL MANAGEMENT LLC DATE OF NAME CHANGE: 20030103 SC 13D 1 d874901_13d.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 Restoration Hardware, Inc. ----------------- (Name of Issuer) Common Stock, $0.0001 par value per share ----------------------------- (Title of Class of Securities) 760981100 --------- (CUSIP Number) Richard W. Shea, Jr. Vardon Capital Management, L.L.C. 120 West 45th Street, 17th Floor New York, NY 10036 (212) 626-6300 -------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) April 29, 2008 -------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the following box [ ]. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP NO. 760981100 SCHEDULE 13D - ------------------------------------------------------------------------------ 1. NAME OF REPORTING PERSON Vardon Capital, L.L.C. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON - ------------------------------------------------------------------------------ 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] - ------------------------------------------------------------------------------ 3. SEC USE ONLY - ------------------------------------------------------------------------------ 4. SOURCE OF FUNDS* AF OO - ------------------------------------------------------------------------------ 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ------------------------------------------------------------------------------ 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------ 7. SOLE VOTING POWER -0- NUMBER OF ----------------------------------------------------------- SHARES 8. SHARED VOTING POWER 3,449,375 BENEFICIALLY OWNED BY EACH ----------------------------------------------------------- PERSON WITH 9. SOLE DISPOSITIVE POWER -0- ----------------------------------------------------------- 10. SHARED DISPOSITIVE POWER 3,449,375 - ------------------------------------------------------------------------------ 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,449,375 - ------------------------------------------------------------------------------ 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------------------------------ 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.9% - ------------------------------------------------------------------------------ 14. TYPE OF REPORTING PERSON OO - ------------------------------------------------------------------------------ ** See Item 5 below *SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP NO. 760981100 SCHEDULE 13D - ------------------------------------------------------------------------------ 1. NAME OF REPORTING PERSON Vardon Capital Management, L.L.C. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON - ------------------------------------------------------------------------------ 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [x] (b) [ ] - ------------------------------------------------------------------------------ 3. SEC USE ONLY - ------------------------------------------------------------------------------ 4. SOURCE OF FUNDS* AF 00 - ------------------------------------------------------------------------------ 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ------------------------------------------------------------------------------ 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------ 7. SOLE VOTING POWER -0- NUMBER OF ----------------------------------------------------------- SHARES 8. SHARED VOTING POWER 3,449,375 BENEFICIALLY OWNED BY EACH ----------------------------------------------------------- PERSON WITH 9. SOLE DISPOSITIVE POWER -0- ----------------------------------------------------------- 10. SHARED DISPOSITIVE POWER 3,449,375 - ------------------------------------------------------------------------------ 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,449,375 - ------------------------------------------------------------------------------ 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------------------------------ 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.9% - ------------------------------------------------------------------------------ 14. TYPE OF REPORTING PERSON IA - ------------------------------------------------------------------------------ ** See Item 5 below *SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP NO. 760981100 SCHEDULE 13D - ------------------------------------------------------------------------------ 1. NAME OF REPORTING PERSON Richard W. Shea, Jr. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON - ------------------------------------------------------------------------------ 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [x] (b) [ ] - ------------------------------------------------------------------------------ 3. SEC USE ONLY - ------------------------------------------------------------------------------ 4. SOURCE OF FUNDS* AF OO - ------------------------------------------------------------------------------ 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ------------------------------------------------------------------------------ 6. CITIZENSHIP OR PLACE OF ORGANIZATION United States of America - ------------------------------------------------------------------------------ 7. SOLE VOTING POWER -0- NUMBER OF ----------------------------------------------------------- SHARES 8. SHARED VOTING POWER 3,449,375 BENEFICIALLY OWNED BY EACH ----------------------------------------------------------- PERSON WITH 9. SOLE DISPOSITIVE POWER -0- ----------------------------------------------------------- 10. SHARED DISPOSITIVE POWER 3,449,375 - ------------------------------------------------------------------------------ 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,449,375 - ------------------------------------------------------------------------------ 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------------------------------ 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.9% - ------------------------------------------------------------------------------ 14. TYPE OF REPORTING PERSON IN - ------------------------------------------------------------------------------ ** See Item 5 below *SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP NO. 760981100 SCHEDULE 13D - ------------------------------------------------------------------------------ 1. NAME OF REPORTING PERSON Vardon International, Ltd. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON - ------------------------------------------------------------------------------ 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [x] (b) [ ] - ------------------------------------------------------------------------------ 3. SEC USE ONLY - ------------------------------------------------------------------------------ 4. SOURCE OF FUNDS* WC - ------------------------------------------------------------------------------ 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ------------------------------------------------------------------------------ 6. CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands - ------------------------------------------------------------------------------ 7. SOLE VOTING POWER -0- NUMBER OF ----------------------------------------------------------- SHARES 8. SHARED VOTING POWER 3,449,375 BENEFICIALLY OWNED BY EACH ----------------------------------------------------------- PERSON WITH 9. SOLE DISPOSITIVE POWER -0- ----------------------------------------------------------- 10. SHARED DISPOSITIVE POWER 3,449,375 - ------------------------------------------------------------------------------ 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,449,375 - ------------------------------------------------------------------------------ 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------------------------------ 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.9% - ------------------------------------------------------------------------------ 14. TYPE OF REPORTING PERSON CO - ------------------------------------------------------------------------------ ** See Item 5 below *SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP NO. 760981100 SCHEDULE 13D - ------------------------------------------------------------------------------ 1. NAME OF REPORTING PERSON Vardon Focus Fund, L.P. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON - ------------------------------------------------------------------------------ 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [x] (b) [ ] - ------------------------------------------------------------------------------ 3. SEC USE ONLY - ------------------------------------------------------------------------------ 4. SOURCE OF FUNDS* WC - ------------------------------------------------------------------------------ 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ------------------------------------------------------------------------------ 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------ 7. SOLE VOTING POWER -0- NUMBER OF ----------------------------------------------------------- SHARES 8. SHARED VOTING POWER 3,449,375 BENEFICIALLY OWNED BY EACH ----------------------------------------------------------- PERSON WITH 9. SOLE DISPOSITIVE POWER -0- ----------------------------------------------------------- 10. SHARED DISPOSITIVE POWER 3,449,375 - ------------------------------------------------------------------------------ 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,449,375 - ------------------------------------------------------------------------------ 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------------------------------ 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.9% - ------------------------------------------------------------------------------ 14. TYPE OF REPORTING PERSON PN - ------------------------------------------------------------------------------ ** See Item 5 below *SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP NO. 760981100 SCHEDULE 13D - ------------------------------------------------------------------------------ 1. NAME OF REPORTING PERSON Vardon Focus Fund II, L.P. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON - ------------------------------------------------------------------------------ 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [x] (b) [ ] - ------------------------------------------------------------------------------ 3. SEC USE ONLY - ------------------------------------------------------------------------------ 4. SOURCE OF FUNDS* WC - ------------------------------------------------------------------------------ 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ------------------------------------------------------------------------------ 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------ 7. SOLE VOTING POWER -0- NUMBER OF ----------------------------------------------------------- SHARES 8. SHARED VOTING POWER 3,449,375 BENEFICIALLY OWNED BY EACH ----------------------------------------------------------- PERSON WITH 9. SOLE DISPOSITIVE POWER -0- ----------------------------------------------------------- 10. SHARED DISPOSITIVE POWER 3,449,375 - ------------------------------------------------------------------------------ 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,449,375 - ------------------------------------------------------------------------------ 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------------------------------ 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.9% - ------------------------------------------------------------------------------ 14. TYPE OF REPORTING PERSON PN - ------------------------------------------------------------------------------ ** See Item 5 below *SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP NO. 760981100 SCHEDULE 13D - ------------------------------------------------------------------------------ 1. NAME OF REPORTING PERSON Vardon Focus Fund International, Ltd. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON - ------------------------------------------------------------------------------ 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [x] (b) [ ] - ------------------------------------------------------------------------------ 3. SEC USE ONLY - ------------------------------------------------------------------------------ 4. SOURCE OF FUNDS* WC - ------------------------------------------------------------------------------ 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ------------------------------------------------------------------------------ 6. CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands - ------------------------------------------------------------------------------ 7. SOLE VOTING POWER -0- NUMBER OF ----------------------------------------------------------- SHARES 8. SHARED VOTING POWER 3,449,375 BENEFICIALLY OWNED BY EACH ----------------------------------------------------------- PERSON WITH 9. SOLE DISPOSITIVE POWER -0- ----------------------------------------------------------- 10. SHARED DISPOSITIVE POWER 3,449,375 - ------------------------------------------------------------------------------ 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,449,375 - ------------------------------------------------------------------------------ 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------------------------------ 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.9% - ------------------------------------------------------------------------------ 14. TYPE OF REPORTING PERSON CO - ------------------------------------------------------------------------------ ** See Item 5 below *SEE INSTRUCTIONS BEFORE FILLING OUT! CUSIP NO. 760981100 SCHEDULE 13D Item 1. Security and Issuer - ---------------------------- This Schedule 13D relates to shares of common stock, $0.0001 par value per share (the "Common Stock") of Restoration Hardware, Inc., a Delaware corporation (the "Issuer"). The principal executive office and mailing address of the Issuer is 15 Koch Road, Suite J, Corte Madera, CA 94925. Item 2. Identity and Background - -------------------------------- This Schedule 13D is being filed by (i) Vardon Focus Fund, L.P., a Delaware limited partnership; (ii) Vardon Focus Fund II, L.P., a Delaware limited partnership; (together the "Domestic Funds"); (iii) Vardon International, Ltd., a Cayman Islands exempted company; (iv) Vardon Focus Fund International, Ltd., a Cayman Islands exempted company; (together the "Offshore Funds" and collectively with the Domestic Funds, the "Funds"); (v) Vardon Capital, L.L.C., a Delaware limited liability company that serves as the general partner of the Domestic Funds ("VC"); (vi) Vardon Capital Management, L.L.C., a Delaware limited liability company that serves as investment manager to the Funds ("VCM"), and (vii) Richard W. Shea, Jr. ("Mr. Shea"), the sole managing member of VC and VCM. The Funds, VC, VCM and Mr. Shea will be collectively referred to herein as "Reporting Persons". All disclosures made in this filing are made pursuant to the best knowledge and reasonable belief of the Reporting Persons. The Domestic Funds, as defined above, are each Delaware limited partnerships with a principal business office address of 120 West 45th Street, 17th Floor, New York, NY 10036. The principal business of each of the Domestic Funds is investment management. The Offshore Funds, as defined above, are each Cayman Islands exempted companies with a principal business office address of Admiral Financial Center, P.O. Box 32021 SMB, 90 Fort Street, Grand Cayman, Cayman Islands, B.W.I. The principal business of each of the Offshore Funds is investment management. The Directors of the Offshore Funds are Richard W. Shea, Jr., David Bree and Don Seymour. Mr. Shea's principal business is acting as managing member of VC and VCM. The principal business office address of Mr. Shea is 120 West 45th Street, 17th Floor, New York, NY 10036. Mr. Bree and Mr. Seymour are employed by dms Management, Ltd. and their principal business is providing director services to private investment funds. The principal business office address of Mr. Bree and Mr. Seymour is P.O. Box 31910, dms House, 20 Genesis Close, Grand Cayman KY1-1208, Cayman Islands. VC is a Delaware limited liability company. The sole managing member of VC is Mr. Shea. The principal business of VC is acting as general partner to the Domestic Funds. The principal business office address of VC is 120 West 45th Street, 17th Floor, New York, NY 10036. VCM is a Delaware limited liability company which serves as the investment manager to the Funds and had served as investment manager to certain separately managed accounts. The sole managing member of VCM is Mr. Shea. The principal business of VCM is providing investment advisory services to the Funds. The principal business office address of VCM is 120 West 45th Street, 17th Floor, New York, NY 10036. Mr. Shea, the sole managing member of VC and VCM, is a citizen of the United States of America. Mr. Shea's principal business is acting as managing member of VC and VCM. The principal business office address of Mr. Shea is 120 West 45th Street, 17th Floor, New York, NY 10036. To the best knowledge of the Reporting Persons, none of the entities or persons identified in this Item 2 has, during the past five years, been convicted of any criminal proceeding (excluding traffic violations or similar misdemeanors), nor been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Item 3. Source and Amount of Funds or Other Consideration - ---------------------------------------------------------- The source of funds for the purchases of the 3,449,375 shares of Common Stock beneficially owned by the Reporting Persons was $18,531,907, representing the working capital of the Domestic Funds and the Offshore Funds. Item 4. Purpose of Transaction - ------------------------------- The Issuer has disclosed that it will hold a special meeting of stockholders to consider and vote on a proposal to adopt the Agreement and Plan of Merger, dated as of November 8, 2007 (the "Merger Agreement"), among the Company, Home Holdings, LLC ("Parent"), and Home Merger Sub, Inc. ("Merger Sub"), as amended by the First Amendment thereto dated January 24, 2008 (the "Amended Merger Agreement"), pursuant to which Merger Sub will merge with and into the Company and the Company will become a direct wholly owned subsidiary of Parent. Parent is controlled by investment funds affiliated with Catterton Management Company, LLC, which is a private equity firm. The record date of the special meeting is May 2, 2008. For a more detailed description of the Merger Agreement we refer you to exhibit 2.1 of the Form 8-K filed by the Issuer with the SEC on November 8, 2007 and for a more detailed description of the Amended Merger Agreement we refer you to exhibit 2.1 of the Form 8-K filed by the Issuer with the SEC on January 24, 2008. The Reporting Persons currently hold the shares of Common Stock for the purpose of fulfilling VCM's obligations under the Amended Stockholder Voting Agreement described below. The Reporting Persons currently plan to sell all or a portion of their shares after fulfilling their obligation under the Amended Stockholder Voting Agreement. On November 8, 2007, in connection with the transactions contemplated by the Merger Agreement, VCM entered into a Stockholder Voting Agreement, dated as of November 8, 2007, with the Issuer (the "Stockholder Voting Agreement"), and an Investment Agreement, dated as of November 8, 2007, with Parent (the "Investment Agreement"). On January 24, 2008, in connection with the transactions contemplated by the Amended Merger Agreement, VCM executed an Amendment, dated as of January 24, 2008, to the Stockholder Voting Agreement with the Issuer (the "Amended Stockholder Voting Agreement") and executed an Equity Rollover Consent, dated January 24, 2008, with Parent (the "Equity Investment Consent"). Pursuant to the Amended Stockholder Voting Agreement, VCM agreed to vote for and support the Merger with Parent. If the Issuer terminates the Merger Agreement in connection with an alternative transaction that constitutes a Superior Proposal (as defined in the Merger Agreement) that is entered into prior to 11:59 p.m., New York City time, on December 13, 2007 or after such time if the alternative transaction is with an Excluded Party (as defined in the Merger Agreement) and such transaction provides for either an all cash offer or a combination of cash and non-cash consideration where holders of shares of Common Stock may elect to receive all cash consideration without any cutback or proration and the recommendation of the Board of Directors of the Issuer in favor of the adoption of such transaction has not been adversely modified or withdrawn, then VCM has agreed to vote in favor of the alternative transaction upon the written request of the Board of Directors of the Issuer or the Independent Committee thereof. The foregoing description of the Amended Stockholder Voting Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Stockholder Voting Agreement, which is attached as Exhibit 99.1 hereto, and the Amended Stockholder Voting Agreement, which is attached as Exhibit 99.2 hereto. Pursuant to the Investment Agreement, VCM has agreed to make a cash investment, immediately prior to the effective time of the Merger, equal to the value of 3,449,055 shares of Common Stock to Parent in exchange for a pro rata equity interest in Parent. The obligations of VCM pursuant to the Investment Agreement is subject to the satisfaction or waiver of certain conditions, as set forth in the Investment Agreement. The Issuer is an express third party beneficiary to the Investment Agreement. The foregoing description of the Investment Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Investment Agreement which is attached as Exhibit 99.3 hereto, and the Equity Investment Consent, which is attached as Exhibit 99.4 hereto. Except as expressly set forth above, the Reporting Persons have no present plans, proposals, commitments, arrangements or understandings with respect to any of the matters set forth in subparagraphs (a) through (j) of Item 4 of Schedule 13D. Item 5. Interest in Securities of the Issuer - --------------------------------------------- (a), (b) According to the Issuer's most recent Form 10-K, there were 38,968,596 shares of Common Stock issued and outstanding as of April 4, 2008. Based on such information, after taking into account the transactions described in Item 5(c) below, the Reporting Persons report beneficial ownership of the following shares of Common Stock: Amount Beneficially Owned: Vardon Capital, L.L.C. - 3,449,375 Vardon Capital Management, L.L.C. - 3,449,375 Richard W. Shea, Jr. - 3,449,375 Vardon International, Ltd. - 3,449,375 Vardon Focus Fund, L.P. - 3,449,375 Vardon Focus Fund II, L.P. - 3,449,375 Vardon Focus Fund International, Ltd. - 3,449,375 Percent of Class: Vardon Capital, L.L.C. - 8.9% Vardon Capital Management, L.L.C. - 8.9% Richard W. Shea, Jr. - 8.9% Vardon International, Ltd. - 8.9% Vardon Focus Fund, L.P. - 8.9% Vardon Focus Fund II, L.P. - 8.9% Vardon Focus Fund International, Ltd. - 8.9% Number of shares as to which such person has: Sole power to vote or to direct the vote Vardon Capital, L.L.C. - 0 Vardon Capital Management, L.L.C. - 0 Richard W. Shea, Jr. - 0 Vardon International, Ltd. - 0 Vardon Focus Fund, L.P. - 0 Vardon Focus Fund II, L.P. - 0 Vardon Focus Fund International, Ltd. - 0 Shared power to vote or to direct the vote Vardon Capital, L.L.C. - 3,449,375 Vardon Capital Management, L.L.C. - 3,449,375 Richard W. Shea, Jr. - 3,449,375 Vardon International, Ltd. - 3,449,375 Vardon Focus Fund, L.P. - 3,449,375 Vardon Focus Fund II, L.P. - 3,449,375 Vardon Focus Fund International, Ltd. - 3,449,375 Sole power to dispose or to direct the disposition of Vardon Capital, L.L.C. - 0 Vardon Capital Management, L.L.C. - 0 Richard W. Shea, Jr. - 0 Vardon International, Ltd. - 0 Vardon Focus Fund, L.P. - 0 Vardon Focus Fund II, L.P. - 0 Vardon Focus Fund International, Ltd. - 0 Shared power to dispose or to direct the disposition of Vardon Capital, L.L.C. - 3,449,375 Vardon Capital Management, L.L.C. - 3,449,375 Richard W. Shea, Jr. - 3,449,375 Vardon International, Ltd. - 3,449,375 Vardon Focus Fund, L.P. - 3,449,375 Vardon Focus Fund II, L.P. - 3,449,375 Vardon Focus Fund International, Ltd. - 3,449,375 c) During the last 60 days, the Reporting Persons purchased or sold the following shares of Common Stock: Entity Trade Date Shares Price/Share Transaction - ------ ---------- ------ ----------- ----------- Managed Accounts advised 04/11/2008 89,115 4.26 Sale By VCM Vardon Focus Fund, LP 04/11/2008 67,392 4.26 Purchase 04/29/2008 20,368 4.28 Purchase 04/29/2008 113,926 4.30 Purchase 04/29/2008 1,018,413 4.33 Purchase 04/29/2008 10,184 4.31 Purchase 04/29/2008 9,097 4.25 Purchase Vardon Focus Fund II, LP 04/11/2008 7,654 4.26 Purchase 04/29/2008 1,086 4.31 Purchase 04/29/2008 12,130 4.30 Purchase 04/29/2008 968 4.25 Purchase 04/29/2008 2,168 4.28 Purchase 04/29/2008 108,433 4.33 Purchase Vardon Focus Fund 04/11/2008 14,069 4.26 Purchase International, Ltd. 04/29/2008 1,765 4.25 Purchase 04/29/2008 3,953 4.28 Purchase 04/29/2008 22,117 4.30 Purchase 04/29/2008 1,976 4.31 Purchase 04/29/2008 197,683 4.33 Purchase Vardon International, Ltd. 04/29/2008 19,627 4.30 Purchase 04/29/2008 1,570 4.25 Purchase 04/29/2008 3,511 4.28 Purchase 04/29/2008 175,471 4.33 Purchase 04/29/2008 1,754 4.31 Purchase In addition, on April 29, 2008 the Reporting Persons purchased certain put options and sold certain call options of the Common Stock. The details of these transactions are set forth in Item 6 below. (d) and (e) Not applicable. - ----------------------------------------------------------------------------- Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer The Reporting Persons may together be deemed to be members of a group for purposes of Section 13(d) of the Exchange Act of 1934. Except as set forth in this Item 6, none of the Reporting Persons or, to the best knowledge of the Reporting Persons, the other persons named in Item 2, is a party to any contract, arrangement, understanding or relationship with respect to any securities of the Issuer, including but not limited to the transfer or voting of any securities of the Issuer, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. VCM has entered into the Amended Voting Agreement with the Issuer which is attached hereto as Exhibits 99.1 and 99.2 and is described in Item 4 above. VCM has entered in an Investment Agreement with the Parent which is attached hereto as Exhibit 99.3 and is described in Item 4 above. VCM entered into the Equity Investment Consent which is attached hereto as Exhibit 99.4 and is described in Item 4 above. On April 29, 2007, Vardon Focus Fund, LP purchased 10,184 put option contracts relating to the Common Stock, Vardon Focus Fund II, LP purchased 1,084 put option contracts relating to the Common Stock, Vardon Focus Fund International, Ltd. purchased 1,977 put option contracts relating to the Common Stock and Vardon International, Ltd. purchased 1,755 put option contracts relating to the Common Stock. The purchase price for each put option contract was $3.40. The exercise price of the put option contracts is $7.50. On April 29, 2007, Vardon Focus Fund, LP sold 10,184 call option contracts relating to the Common Stock, Vardon Focus Fund II, LP sold 1,084 call option contracts relating to the Common Stock, Vardon Focus Fund International, Ltd. sold 1,977 call option contracts relating to the Common Stock and Vardon International, Ltd. sold 1,755 call option contracts relating to the Common Stock. The sale price for each call option contract was $0.05. The exercise price of the call option contracts is $7.50. Item 7. Material to be Filed as Exhibits - ----------------------------------------- Exhibit A - Joint Filing Undertaking. Exhibit 99.1 - Stockholder Voting Agreement, dated as of November 8, 2007, by and between the Restoration Hardware, Inc. and Vardon Capital Management, LLC Exhibit 99.2 - Amendment to Stockholder Voting Agreement, dated as of January 24, 2008, by and between the Restoration Hardware, Inc. and Vardon Capital Management, LLC Exhibit 99.3 - Investment Agreement, dated as of November 8, 2007, by and between Home Holdings, LLC and Vardon Capital Management, LLC Exhibit 99.4 - Amendment to Investment Agreement, dated as of January 24, 2008, by and between Home Holdings, LLC and Vardon Capital Management, LLC SIGNATURES After reasonable inquiry and to the best of our knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. Dated: April 30, 2008 Vardon Focus Fund, L.P. Vardon Focus Fund II, L.P. By: Richard W. Shea, Jr. By: Richard W. Shea, Jr. as managing member of the as managing member of the general partner general partner By: /s/ Richard W. Shea, Jr. By: /s/ Richard W. Shea, Jr. ------------------------------- ----------------------------------- Richard W. Shea, Jr. Richard W. Shea, Jr. Managing Member of Managing Member of the General Partner the General Partner Vardon International, Ltd. Vardon Focus Fund International, Ltd. By: Richard W. Shea, Jr. By: Richard W. Shea, Jr. as director as director By: /s/ Richard W. Shea, Jr. By: /s/ Richard W. Shea, Jr. ------------------------------- ----------------------------------- Richard W. Shea, Jr. Richard W. Shea, Jr. Director Director Vardon Capital, L.L.C. Vardon Capital Management, L.L.C By: Richard W. Shea, Jr. By: Richard W. Shea, Jr. its managing member its managing member By: /s/ Richard W. Shea, Jr. By: /s/ Richard W. Shea, Jr. ------------------------------- ----------------------------------- Richard W. Shea, Jr. Richard W. Shea, Jr. Managing Member Managing Member RICHARD W. Shea, Jr. By: /s/ Richard W. Shea, Jr. ------------------------------- Richard W. Shea, Jr. Individually Exhibit A JOINT FILING UNDERTAKING The undersigned, being duly authorized thereunto, hereby executes this agreement as an exhibit to this Schedule 13D with respect to the shares of Common Stock of Restoration Hardware, Inc., par value 0.0001 per share, to evidence the agreement of the below-named parties, in accordance with the rules promulgated pursuant to the Securities Exchange Act of 1934, as amended, to file this Schedule 13D jointly on behalf of each such party. Dated: April 30, 2008 Vardon Focus Fund, L.P. Vardon Focus Fund II, L.P. By: Richard W. Shea, Jr. By: Richard W. Shea, Jr. as managing member of the as managing member of the general partner general partner By: /s/ Richard W. Shea, Jr. By: /s/ Richard W. Shea, Jr. ------------------------------- ----------------------------------- Richard W. Shea, Jr. Richard W. Shea, Jr. Managing Member of Managing Member of the General Partner the General Partner Vardon International, Ltd. Vardon Focus Fund International, Ltd. By: Richard W. Shea, Jr. By: Richard W. Shea, Jr. as director as director By: /s/ Richard W. Shea, Jr. By: /s/ Richard W. Shea, Jr. ------------------------------- ----------------------------------- Richard W. Shea, Jr. Richard W. Shea, Jr. Director Director Vardon Capital, L.L.C. Vardon Capital Management, L.L.C By: Richard W. Shea, Jr. By: Richard W. Shea, Jr. its managing member its managing member By: /s/ Richard W. Shea, Jr. By: /s/ Richard W. Shea, Jr. ------------------------------- ----------------------------------- Richard W. Shea, Jr. Richard W. Shea, Jr. Managing Member Managing Member RICHARD W. Shea, Jr. By: /s/ Richard W. Shea, Jr. ------------------------------- Richard W. Shea, Jr. Individually SK 03088 0008 874901 EX-99.1 2 d879284_ex99-1.txt EXECUTION COPY STOCKHOLDER VOTING AGREEMENT 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 has voting control over shares of Company Common Stock as is indicated on Exhibit A to this Agreement in an aggregate amount of not less than 3,449,055 shares (the "Minimum Share Number"), 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 all Shares (as defined below) over which it has voting control at the time of the votes referred to herein 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. "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 Investment 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 that would cause the Stockholder to have voting control over fewer than the Minimum Share Number for purposes of counting the number of votes that Stockholder can cause to be voted at the time of any vote for which Stockholder is required to vote or cause the voting of its Shares pursuant to Section 3 hereof. 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) at the time: (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; (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 Investment 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. (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 owns or has voting control over 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 Investment 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. 7. Stockholder Capacity. The Stockholder is hereby executing and performing this Agreement solely in its capacity as the investment advisor with respect to the Shares as indicated in Exhibit A, 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. 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. IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed as of the date first above written. RESTORATION HARDWARE, INC. By: -------------------------- Name: Gary G. Friedman Title: Chief Executive Officer VARDON CAPITAL MANAGEMENT, LLC By: _____________________________ Name: Richard W. Shea, Jr. Title: Managing Member EXHIBIT A NUMBER OF SHARES OF COMPANY COMMON STOCK COMPANY COMMON STOCK OWNED AND/OR NAME ADDRESS WITH VOTING CONTROL ---- ------- ------------------- Vardon Capital 120 West 45th Street 3,449,055 shares of Common Stock Management, LLC New York, NY 10036 EX-99.2 3 d879295_ex99-2.txt AMENDMENT TO STOCKHOLDER VOTING AGREEMENT THIS AMENDMENT TO STOCKHOLDER VOTING AGREEMENT (this "Amendment") is made as of January 24, 2008, by and between Restoration Hardware, Inc., a Delaware corporation (the "Company"), and the undersigned stockholder (the "Stockholder"). RECITALS WHEREAS, the Company and the Stockholder are parties to that certain Stockholder Voting Agreement dated as of November 8, 2007 (the "Voting Agreement"), which was executed and delivered concurrently with the execution of the Merger Agreement dated as of November 8, 2007 (the "Merger Agreement"), by and among the Company, Home Holdings, LLC, a Delaware limited liability company (the "Parent"), and Home Merger Sub, Inc., a Delaware corporation ("Merger Sub"). WHEREAS, concurrent with the execution and delivery hereof, the Company, Parent and Merger Sub are entering into a First Amendment to the Merger Agreement pursuant to which, among other things, the Merger Consideration (as defined in the Merger Agreement) is being reduced to $4.50 in cash per share of Company Common Stock. WHEREAS, Section 10 of the Voting Agreement provides that the Voting Agreement may be amended in a writing signed by the parties thereto. WHEREAS, the first recital in the Voting Agreement makes reference to the Merger Agreement as it may be amended from time to time so long as no amendment reduces the Merger Consideration. WHEREAS, the undersigned parties intend that the Voting Agreement shall remain applicable in all respects in accordance with its original terms to the Merger Agreement as amended including the revised Merger Consideration of $4.50 per share except that the final deadline expiration date of the Voting Agreement shall be extended from June 30, 2008 to August 31, 2008 consistent with the original structure of the Voting Agreement. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby amend the Agreement as follows: AMENDMENT 1. Amendment of Voting Agreement. Subject to the terms of this Amendment, the parties intend that the Voting Agreement shall remain applicable in all respects in accordance with its original terms to the Merger Agreement as amended including the revised Merger Consideration of $4.50 (except that the final expiration deadline of the Voting Agreement is to be extended to August 31, 2008) and accordingly the two references to "June 30,2008" in Section 6 of the Voting Agreement are hereby changed to read "August 31, 2008" and the first recital of the Voting Agreement is hereby amended and restated in its entirety to read as follows: "WHEREAS, concurrent with the execution and delivery of this amended Voting Agreement dated as of January 24, 2008, the 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 First Amendment to Merger Agreement of even date herewith (such Merger Agreement, as amended, and as it may be hereafter amended from time to time pursuant to the terms thereof other than an amendment that reduces the Merger Consideration below $4.50 in cash per share of Company Common Stock 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);" 2. Definitions. Except as otherwise provided herein, capitalized terms used in this Amendment shall have the definitions set forth in the Agreement. 3. Terms of Agreement. Except as expressly modified hereby, all terms, conditions and provisions of the Agreement shall continue in full force and effect. The Stockholder hereby agrees and confirms that its obligations under the Agreement, as amended by this Amendment, shall remain in full force and effective following execution of this Amendment by the parties hereto. 4. Conflicting Terms. In the event of any inconsistency or conflict between the Agreement and this Amendment, the terms, conditions and provisions of this Amendment shall govern and control. 5. Governing Law. This Amendment shall be governed by the laws of the State of Delaware, without reference to its principles of conflicts of law. 6. Counterparts. This Amendment 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. 7. Entire Agreement. This Amendment, together with the Agreement and the documents expressly referred to herein and therein, 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. [Signature pages follow] IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above written. RESTORATION HARDWARE, INC. By: --------------------------------------- Name: Chris Newman Title: Chief Financial Officer VARDON CAPITAL MANAGEMENT, LLC By: --------------------------------------- Name: Richard W. Shea, Jr. Title: Managing Member EX-99.3 4 d879312_ex99-3.txt [Vardon Capital Management, LLC Letterhead] November 8, 2007 To: Home Holdings, LLC Re: Equity Investment Ladies and Gentlemen: Reference is made to the Agreement and Plan of Merger, dated as of the date hereof (as it may be amended from time to time, the "Merger Agreement"), by and among Home Holdings, LLC, a Delaware limited liability company ("Parent"), Home Merger Sub, Inc., a Delaware corporation ("Merger Sub") and Restoration Hardware, Inc., a Delaware corporation (the "Company"), pursuant to which Merger Sub, or a permitted assignee of Merger Sub, will be merged into the Company (the "Merger"), with the Company as the Surviving Corporation. Capitalized terms used but not defined herein have the meanings ascribed to them in the Merger Agreement. This letter is being delivered to Parent in connection with the execution of the Merger Agreement by Parent, Merger Sub and the Company. For purposes of this letter, "Investors" means the parties delivering Equity Commitments (as defined herein) and other investors investing in Parent. This letter confirms the commitment of the undersigned, subject to the prior satisfaction or waiver of the conditions set forth herein, to make a cash investment, on its own behalf or on behalf of investment accounts that the undersigned manages, in the equity securities of Parent immediately prior to the Effective Time equal in value to the value of 3,449,055 Shares (the "Aggregate Investment Amount") for which investment, the undersigned shall receive a pro rata (in kind and amount) share of the equity of Parent based upon the value of the aggregate equity contributions of all of the Investors (the "Equity Commitment") (other than any equity securities or equity equivalents issued or available for issuance to management and employees) and assuming that the value of any Shares that are contributed by Investors to Parent on a rollover basis pursuant to Rollover Agreements are given a value equal to the Merger Consideration and the value of the Aggregate Investment Amount is equal to the Merger Consideration value of 3,449,055 Shares (such share of the equity of Parent, the "Subject Equity Securities"). All Shares owned by any Investors as of the Effective Time that are not subject to Rollover Agreements shall be converted in the Merger into the right to receive the Merger Consideration. The undersigned agrees and acknowledges that Catterton Partners VI, L.P. and Catterton Partners VI Offshore, L.P. (collectively "Catterton") may syndicate a portion of their Equity Commitment; provided that all such Catterton investments in Parent and all other investments in Parent, if any, made by Investors (meaning investments not in the form of contribution of Rollover Contribution Shares) in connection with Parent providing adequate financing to acquire the Shares in the Merger shall be made in the form of cash investments and any such cash investment for the Subject Equity Securities shall entitle the Investor to receive a pro rata share of the aggregate Subject Equity Securities assuming that the value of each Rollover Contribution Share is equal to the Merger Consideration. In connection with any additional financing that Parent may obtain to acquire the Shares in the Merger, the undersigned shall also have the right to co-invest on a pro rata basis in any senior equity security issued by Parent and in any other senior security issued by Parent to Catterton or to any of its affiliates (including limited partners that are not banks). The undersigned's obligation to make the investment in Parent contemplated hereby is subject to (i) the prior satisfaction or waiver by Parent of the conditions set forth in Sections 6.1 and 6.3 of the Merger Agreement (other than Section 6.3(e)), (ii) the terms of this letter including satisfactory agreement of the undersigned and Catterton on the customary terms of the shareholder's agreement referenced below, and (iii) the readiness of the Certificate of Merger for filing pursuant to Section 1.3 of the Merger Agreement. The undersigned's investment will occur contemporaneously with the Closing and immediately prior to the Effective Time and the simultaneous issuance to the undersigned of the Subject Equity Securities. The undersigned hereby represents, warrants and covenants to Parent as follows: (i) The undersigned is an "accredited investor" as such term is defined in Rule 501 of the Securities Act. (ii) None of the information supplied in writing by the undersigned for inclusion or incorporation by reference in the Proxy Statement or Schedule 13E-3 will cause a breach of the representation and warranty of Parent set forth in Section 4.4 of the Merger Agreement. In that regard, the undersigned shall provide Parent such information concerning the undersigned as it may reasonably request. Parent hereby represents, warrants and covenants to the undersigned as follows: (i) Parent is a legal entity duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization and has all requisite corporate or similar power and authority to own, lease and operate its properties and assets and to carry on its business as presently conducted. (ii) The Subject Equity Securities shall be (a) on contractual and structural parity as to voting rights, liquidation preference, rights to dividends and distributions (other than with respect to rights that are customarily afforded to a majority stockholder) with the other equity securities in Parent that are acquired by Catterton or any of its affiliates or any of the other Investors that are parties to Rollover Agreements and (b) shall be the same class as such other equity securities in Parent that are acquired by Catterton or any of its affiliates or any of the other Investors that are parties to Rollover Agreements. (iii) Parent has all requisite corporate power and authority to enter into this agreement and to consummate the transactions contemplated by this agreement, and the execution and delivery of this agreement and the consummation of the transactions contemplated by this agreement have been duly and validly authorized by the board of directors of Parent and by any other approvals required for this agreement to be binding upon Parent including approvals of any requisite managing members, stockholders or owners of limited liability interests. (iv) Upon issuance, the Subject Equity Securities shall be duly authorized, validly issued, fully paid and nonassessable and not be subject to or issued in violation of any option, call, right of first offer or refusal, preemptive right, subscription right or any similar right under any provision of the DGCL or the certificate of incorporation or bylaws of Parent. This letter, and the undersigned's obligation to make the investment contemplated hereby, will terminate and be of no further force and effect (a) at the election of the undersigned, upon an Adverse Recommendation Change made by the Board of Directors (or the Independent Committee) or (b) automatically, without any action of the parties hereto, on the earliest to occur of (i) the Effective Time (assuming that the undersigned has performed its obligations hereunder prior to the Effective Time), (ii) expiration or termination of the Merger Agreement in accordance with its terms, and (iii) June 30, 2008. Prior to the Closing, no Investor shall transfer, directly or indirectly, its right to acquire the equity interests in Parent pursuant to this letter, except for such transfers or assignments to one or more affiliated funds or affiliated entities (other than portfolio companies) or as approved by Parent; provided, that, except to the extent otherwise agreed to by Parent, any such assignment shall not relieve the undersigned of its obligations under this letter; provided further, that Parent agrees and acknowledges that nothing contained herein shall in any way prohibit the undersigned from entering into and fulfilling its obligations in accordance with that certain Stockholder Voting Agreement dated the date hereof by and between the Company and the undersigned. Parent and the undersigned hereby acknowledge and agree that the parties shall, on or prior to the Closing Date, enter into a customary shareholders agreement (the terms of which will be subject to mutual agreement of the parties) which shall contain customary provisions including, but not limited to, registration rights, "side-by-side" rights, drag along and tag along rights, dilution protection, and minority protection covenants as to discriminatory treatment of minority investors. Notwithstanding anything that may be expressed or implied in this letter, Parent, by its acceptance of the benefits of this agreement, covenants, agrees and acknowledges (i) that no Person other than the undersigned and its successors and permitted assigns shall have any obligation hereunder, (ii) that, notwithstanding that the undersigned or its successors or permitted assigns may be a partnership or limited liability company, no recourse hereunder or under any documents or instruments delivered in connection herewith shall be had against any former, current or future director, officer, agent, affiliate (as defined in the Merger Agreement), employee, general or limited partner, member, manager or stockholder of the undersigned or any of its successors or permitted assigns or any former, current or future director, officer, agent, affiliate, employee, general or limited partner, member, manager, stockholder, heir, legatee, beneficiary, devisee or estate of any of the foregoing, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable Law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any former, current or future director, officer, agent, affiliate, employee, general or limited partner, member, manager or stockholder of the undersigned or any former, current or future director, officer, agent, affiliate, employee, general or limited partner, member, manager, stockholder, heir, legatee, beneficiary, devisee or estate of any of the foregoing, as such, for any obligations of the undersigned or any of its successors or permitted assigns under this letter or any documents or instrument delivered in connection herewith or for any claim based on, in respect of, or by reason of such obligation or their creation, and (iii) that the maximum aggregate liability of the undersigned in connection with this letter shall be limited to the Aggregate Investment Amount. The undersigned is hereby executing and performing this letter solely in its capacity on its own behalf as an investor or on behalf of investment accounts that the undersigned manages, and nothing in this letter shall limit or restrict any partner, member, director, officer, employee or affiliate of the undersigned 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. This letter shall not be assignable by Parent without the undersigned's prior written consent, except that Parent may assign this letter, without the undersigned's prior written consent, to any person to which Parent assigns any of its rights and obligations under the Merger Agreement. The parties hereto acknowledge that the Company is an express third party beneficiary of this letter. This letter will inure to the benefit of and be enforceable by the Company, and this letter may not be amended, modified or waived in a manner adverse to the Company in any material respect without the prior written consent of the Company. Money damages would not be a sufficient remedy for any breach of this letter by the undersigned and Parent shall be entitled to equitable relief, including injunction and specific performance, as a remedy for any such breach; provided, however that under no circumstances shall the undersigned's maximum liability for any reason exceed the aggregate value of the undersigned's Aggregate Investment Amount. Parent shall reimburse the undersigned for all reasonable out-of-pocket costs and expenses incurred in connection with the transactions contemplated hereunder in an amount not to exceed $50,000. Such costs and expenses shall be reimbursed promptly by the Parent upon submission by the undersigned of an itemized expense report. This letter may be executed in counterparts. This letter and any related dispute shall be governed by, and construed and interpreted in accordance with, the laws of the State of Delaware applicable to contracts executed in and to be performed in that State. Each of the parties hereto irrevocably agrees that any legal action or proceeding with respect to this letter and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this letter and the rights and obligations arising hereunder brought by the other parties hereto or its successors or assigns, shall be brought and determined exclusively in the Delaware Court of Chancery, or in the event (but only in the event) that such court does not have subject matter jurisdiction over such action or proceeding, in the United States District Court for the District of Delaware. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LETTER OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. [Remainder of page intentionally left blank] Very truly yours, VARDON CAPITAL MANAGEMENT, LLC By: ----------------------------- Name: Richard W. Shea, Jr. Title: Managing Member Agreed and acknowledged: HOME HOLDINGS, LLC By: --------------------------- Name: Marc Magliacano Title: Secretary EX-99.4 5 d879308_ex99-4.txt January 24, 2008 To: Home Holdings, LLC Re: Equity Investment Ladies and Gentlemen, Reference is made to (i) the Agreement and Plan of Merger, dated November 8, 2007 (the "Merger Agreement"), between Home Holdings, LLC ("Parent"), Home Merger Sub, Inc., a Delaware corporation, and Restoration Hardware, Inc., a Delaware corporation (the "Company") and (ii) the letter agreement (the "Letter Agreement"), dated November 8, 2007, between Parent and the undersigned. Capitalized terms used herein but not defined herein shall have the meanings set forth in the Merger Agreement, as amended by the Amendment. The undersigned hereby (i) consents and agrees to the amendment to the Merger Agreement (the "Amendment"), in the form attached as Exhibit A hereto; (ii) agrees and acknowledges that its obligations under the Letter Agreement shall remain in full force and effect following execution of the Amendment by the parties thereto; (iii) agrees and acknowledges that the capitalized terms used but not defined in the Letter Agreement (including the term "Merger Consideration") shall have the meanings set forth in the Merger Agreement, as amended by the Amendment; (iv) acknowledges that in connection with the execution of the Amendment an affiliate of Parent will lend to the Company $25 million in exchange for a Junior PIK Promissory Note in the form attached as Exhibit B (the "Note"), which Note may be exchanged for equity of the Company upon completion of the Merger; and (v) waives any right under the Letter Agreement that the undersigned may have to co-invest in connection with the Company's issuance of the Note or the equity issued upon exchange of the Note for equity of the Company upon completion of the Merger. [Remainder of page intentionally left blank.] Very truly yours, VARDON CAPITAL MANAGEMENT, LLC By: ----------------------------- Name: Richard W. Shea, Jr. Title: Managing Member Agreed and Acknowledged by: Home Holdings, LLC By: ------------------------- Name: J. Michael Chu Title: President Consented to by (solely for purposes of providing its consent to the amendment of the Letter Agreement): Restoration Hardware, Inc. By: ------------------------- Name: Chris Newman Title: Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----