EXHIBIT 10.12
MATRIXONE, INC.
AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
THIS AGREEMENT is made as of June 17, 1999, between MatrixOne, Inc.,
formerly called Adra Systems, Inc., a Delaware corporation (the "Company"),
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Xxxxxxx X. Xxxxx, Xxxxx X. Xxxxxxx, Xxxxx X. Xxxxxxx and Xxxxx X. Xxxxx (the
"Founders"), each of the investors listed on the Schedule of Investors attached
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hereto (the "Investors"), each of the investors listed on the Schedule of G
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Investors attached hereto (the "G Investors"), each of the investors listed on
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the Schedule of H Investors attached hereto (the "H Investors") and each of the
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executives listed on the Schedule of Executives attached hereto (the
"Executives"). The Founders, the Investors, the G Investors, the H Investors
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and the Executives are collectively referred to as the "Stockholders" and
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individually as a "Stockholder." Capitalized terms used herein are defined in
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paragraph 7 hereof.
The H Investors shall purchase shares of the Company's Class H Convertible
Preferred Stock pursuant to a purchase agreement between the H Investors and the
Company dated as of the date hereof (the "Class H Purchase Agreement").
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The Company and the Stockholders desire to enter into this Agreement for
the purposes, among others, of (i) establishing the composition of the Company's
Board of Directors (the "Board"), (ii) assuring continuity in the management and
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ownership of the Company and (iii) limiting the manner and terms by which the
Stockholders' Preferred and Common Stock may be transferred. The execution and
delivery of this Agreement is a condition to the H Investors' purchase of the
Company's stock pursuant to the Class H Purchase Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties to this Agreement hereby agree as follows:
1. Board of Directors.
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(a) From and after the date hereof and until the provisions of this
paragraph 1 cease to be effective, each holder of Stockholder Shares shall vote
all of such holder's Stockholder Shares which are voting shares and any other
voting securities of the Company over which such holder has voting control and
shall take all other necessary or desirable actions within such holder's control
(whether in such holder's capacity as a stockholder, director, member of a board
committee or officer of the Company or otherwise, and including, without
limitation, attendance at meetings in person or by proxy for purposes of
obtaining a quorum and execution of written consents in lieu of meetings), and
the Company shall take all necessary or desirable actions within its control
(including, without limitation, calling special board and stockholder meetings),
to:
(i) subject to paragraph 1(g) below, establish the authorized number
of directors on the Board at six (6) directors when each of the following
individuals is elected to fill newly created directorships or vacancies;
(ii) elect the following individuals to the Board
(A) one representative designated by the Investors determined by
the affirmative vote of Investors holding the majority of the Class A, B, C, D
and F Convertible Preferred Stock of the Company (the "Old Preferred") held by
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all Investors (the "Investor Director"), provided that the right of any and all
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Investors to designate one representative to the Board pursuant to this
paragraph 1(a)(ii)(A) shall terminate and be of no force and effect in the event
that such Old Preferred be converted to Common Stock. Xxxxxx Xxxxxxx shall be
the initial nominated Investor Director until his replacement is nominated
pursuant to the terms hereof.
(B) one representative designated by the G Investors determined
affirmative vote of the G Investors holding two-thirds of the Stockholder Shares
held by all G Investors (the "G Investor Director"), provided that Xxxxxxx Xxxxx
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Capital Partners V, L.P. ("Xxxxxxx Xxxxx") shall designate the G Investor
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Director from and after the date hereof so long as Xxxxxxx Xxxxx is a holder of
Class G Convertible Preferred Stock ("G Preferred") and provided that the right
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of any and all G Investors to designate one representative to the Board
pursuant to this paragraph 1(a)(ii)(B) shall terminate and be of no force and
effect in the event that such G Preferred be converted to Common Stock. Xxxxx
Xxxxxxxx shall be the initial nominated G Investor Director until her
replacement is nominated pursuant to the terms hereof.
(C) the chief executive officer of the Company elected by the
Board (the "CEO Director").
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(D) three representatives designated by, and mutually acceptable
to, the Investors, the G Investors and the H Investors determined on the basis
of an annual vote of a majority of the Stockholder Shares held by all Investors
and a majority of the Stockholder Shares held by all G Investors and H Investors
provided that:
(1) two of such directors (the "Industry Directors") shall
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be individuals with considerable operating experience and stature in the
software industry. Xxxxxxx Xxxxxxx shall be one of the Industry Directors until
his replacement is nominated pursuant to the terms hereof, and the other
Industry Director shall be elected in the manner set forth above, it being
acknowledged that this position is vacant as of the date hereof; and
(2) one of such directors (the "Outside Director") shall not
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be required to meet the profile in (1) above. Xxxxx X. Xxxxxx shall be the
initial Outside Director until his replacement is nominated pursuant to the
terms hereof.
(3) the removal from the Board (with or without cause) of
any representative designated hereunder by the Investors, the G Investors or the
Investors, the
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G Investors and the H Investors voting together as described in subparagraph
(ii)(D), pursuant to subparagraphs (ii)(A), (B) or (D), respectively, shall be
at the Investors', the G Investors' or the Investors, the G Investors and the H
Investors voting together as described in subparagraph (ii)(D), written request,
respectively, but only upon such written request and under no other
circumstances (in each case, determined on the basis of a vote of the holders of
a majority of the Stockholder Shares held by such Persons), provided that the
removal from the Board (with or without cause) of any representative designated
hereunder pursuant to subparagraph (ii)D(1) shall be approved by all holders of
Stockholder Shares if so directed by the affirmative vote of a majority of the
Board at any time; and
(4) in the event that any representative designated
hereunder by the Investors, the G Investors or by the Investors, the G Investors
and the H Investors voting together as described in subparagraph (ii)(D) ceases
to serve as a member of the Board during his or her term of office, the
resulting vacancy on the Board shall be filled by a representative designated by
the Investors, the G Investors or the Investors, the G Investors and the H
Investors voting together as described in subparagraph (ii)(D), respectively, as
provided hereunder.
(b) The Company shall pay the reasonable out-of-pocket expenses
incurred by each director in connection with attending the meetings of the Board
and any committee thereof.
(c) The rights of the Investors under this paragraph 1 shall terminate
at such time as the Investors and their Permitted Transferees (as defined in
paragraph 4d hereof) hold in the aggregate less than 50% of the Stockholder
Shares held by such Persons on October 1, 1997.
(d) The rights of the G Investors under this paragraph 1 shall
terminate at such time as the G Investors and their Permitted Transferees (as
defined in paragraph 4d hereof) hold in the aggregate less than 50% of the
Stockholder Shares held by such Persons on October 1, 1997.
(e) The rights of the H Investors under this paragraph 1 shall
terminate at such time as the H Investors and their Permitted Transferees (as
defined in Paragraph 4(d) hereof) hold in the aggregate less than 50% of the
Stockholder Shares held by such Persons on the date hereof.
(f) The provisions of this paragraph 1 shall terminate automatically
and be of no further force and effect upon a Qualified Public Offering (as
defined in paragraph 7 hereof).
(g) If any party fails to designate a representative to fill a
directorship pursuant to the terms of this paragraph 1, the individual
previously holding such directorship shall be elected to such position, or if
such individual fails or declines to serve, the election of an individual to
such directorship shall be accomplished in accordance with the Company's Bylaws
and applicable law; provided that the Stockholders shall vote to remove such
individual if the party which failed to designate such directorship so directs.
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(h) Notwithstanding anything to the contrary contained in this paragraph 1,
in the event the holder or holders of the Preferred Stock exercise their right
to elect a director or directors to the Board upon the occurrence of an Event of
Noncompliance under the Company's Restated Certificate of Incorporation, the
provisions of this paragraph 1 shall remain in effect; provided that the size of
the Board shall be increased by the number of directors who are elected by the
holders of the Preferred Stock in accordance with the Restated Certificate of
Incorporation.
(i) If the member of the Board nominated by the holders of the G Investor
is unable to attend a meeting of the Board, the Company shall permit a
representative of such holders to attend as an observer all meetings of its
Board.
2. Representations and Warranties. Each Stockholder represents and
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warrants that (i) such Stockholder is the record owner of the number of
Stockholder Shares set forth opposite its name on the Schedule of Investors,
Schedule of G Investors, Schedule of H Investors or Schedule of Executives, as
the case may be, attached hereto, (ii) this Agreement has been duly authorized,
executed and delivered by such Stockholder and constitutes the valid and binding
obligation of such Stockholder, enforceable in accordance with its terms, and
(iii) such Stockholder has not granted and is not a party to any proxy, voting
trust or other agreement which is inconsistent with, conflicts with or violates
any provision of this Agreement. No holder of Stockholder Shares shall grant
any proxy or become party to any voting trust or other agreement which is
inconsistent with, conflicts with or violates any provision of this Agreement.
3. Retention of Stockholder Shares. So long as the G Investors or H
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Investors hold 75% of the Class G Stockholder Shares or Class H Stockholder
Shares, respectively, held by such persons as of the date hereof, no Executive
shall sell, transfer, assign, pledge or otherwise dispose of any Stockholder
Shares held by such Executive on the date hereof or hereafter acquired, except
pursuant to a Sale of the Company or a Public Sale provided that nothing
contained in this paragraph 3 shall prohibit any Executive from transferring
Stockholder Shares as permitted by paragraph 4(d) hereof; and provided further
that the provisions of this paragraph 3 shall terminate and cease to be
effective upon the consummation of a Public Offering, an Approved Sale, a Sale
of the Company or when such Executive ceases to be employed by the Company or
any Subsidiary.
4. Restrictions on Transfer of Stockholder Shares.
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(a) Transfer of Stockholder Shares. No holder of Stockholder Shares shall
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sell, transfer, assign, pledge or otherwise dispose of (whether with or without
consideration and whether voluntarily or involuntarily or by operation of law)
any interest in his Stockholder Shares (a "Transfer"), except pursuant to the
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provisions of this paragraph 4 hereof, pursuant to a Public Sale or an Approved
Sale; provided that in no event shall any Transfer of Stockholder Shares
pursuant to this paragraph 4 be made for any consideration other than cash
payable upon consummation of such Transfer or in installments over time and no
Stockholder Shares may be pledged (except for a pledge of Stockholder Shares by
a transferee to secure indebtedness to the transferor thereof hereunder). No
Stockholder shall consummate any Transfer (other than a Public Sale or an
Approved Sale) until 30 days after the later of the delivery to the Company and
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the other Stockholders of such Stockholder's Offer Notice or Sale Notice (if
any), unless the parties to the Transfer have been finally determined pursuant
to this paragraph 4 prior to the expiration of such 30-day period (the "Election
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Period").
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(b) First Offer Right. At least 30 days prior to making any Transfer of
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any Stockholder Shares (other than a Public Sale), the transferring Stockholder
(the "Transferring Stockholder") shall deliver a written notice (an "Offer
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Notice") to the Company and the other Stockholders, excluding the Founders (the
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"Other Stockholders"). The Offer Notice shall disclose in reasonable detail the
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proposed number of Stockholder Shares to be transferred, the proposed terms and
conditions of the Transfer and the identity of the prospective transferee(s) (if
known). First, the Company may elect to purchase all (but not less than all) of
the Stockholder Shares specified in the Offer Notice at the price and on the
terms specified therein by delivering written notice of such election to the
Transferring Stockholder and the Other Stockholders as soon as practical but in
any event within ten days after the delivery of the Offer Notice. If the
Company has not elected to purchase all of the Stockholder Shares within such
ten-day period, each Other Stockholder may elect to purchase all (but not less
than all) of his, her or its Pro Rata Share (as defined below) of the remaining
Stockholder Shares specified in the Offer Notice at the price and on the terms
specified therein by delivering written notice of such election to the
Transferring Stockholder as soon as practical but in any event within 20 days
after delivery of the Offer Notice. Any Stockholder Shares not elected to be
purchased by the end of such 20-day period shall be reoffered for the ten-day
period prior to the expiration of the Election Period by the Transferring
Stockholder on a pro rata basis to the Other Stockholders who have elected to
purchase their Pro Rata Share and, if there are any such Stockholder Shares
remaining after such allocation, the Company shall have the right to purchase
such remaining Stockholder Shares. If the Company or any Other Stockholders
have elected to purchase Stockholder Shares from the Transferring Stockholder,
the transfer of such shares shall be consummated as soon as practical after the
delivery of the election notice(s) to the Transferring Stockholder, but in any
event within 15 days after the expiration of the Election Period. To the extent
that the Company and the Other Stockholders have not elected to purchase all of
the Stockholder Shares being offered, the Transferring Stockholder may, within
90 days after the expiration of the Election Period and subject to the
provisions of subparagraph (c) below, transfer such Stockholder Shares to one or
more third parties at a price no less than the price per share specified in the
Offer Notice and on other terms no more favorable to the transferees thereof
than offered to the Company and the Other Stockholders in the Offer Notice. Any
Stockholder Shares not transferred within such 90-day period shall be reoffered
to the Company and the Other Stockholders under this paragraph 4(b) prior to any
subsequent Transfer. The purchase price specified in any Offer Notice shall be
payable solely in cash at the closing of the transaction or in installments over
time. Each Stockholder's "Pro Rata Share" shall be based upon such
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Stockholder's proportionate ownership of all Stockholder Shares owned by
Stockholders other than the Transferring Stockholder.
(c) Participation Rights. At least 30 days prior to any Transfer of
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Stockholder Shares (other than a Public Sale, an Approved Sale or a Transfer to
the Company or the Other Stockholders pursuant to paragraph 4(b), the
Transferring Stockholder shall deliver a written notice (the "Sale Notice") to
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the Company and the other Stockholders, excluding the Founders (the "Other
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Stockholders"), specifying in reasonable detail the identity of the prospective
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transferee(s), the number of shares to be transferred and the terms and
conditions of the Transfer (which notice may be the same notice and given at the
same time as the Offer Notice under paragraph 4(b)). The Other Stockholders may
elect to participate in the contemplated Transfer at the same price per share
and on the same terms by delivering written notice to the Transferring
Stockholder within 30 days after delivery of the Sale Notice. If any Other
Stockholders have elected to participate in such Transfer, the Transferring
Stockholder and such Other Stockholders shall be entitled to sell in the
contemplated Transfer, at the same price and on the same terms, a number of
Stockholder Shares equal to the product of (i) the quotient determined by
dividing the percentage of Stockholder Shares owned by such Person by the
aggregate percentage of Stockholder Shares owned by the Transferring Stockholder
and the Other Stockholders participating in such sale and (ii) the number of
Stockholder Shares to be sold in the contemplated Transfer. For purposes of
this paragraph 4(c), the number of Stockholder Shares represented by shares of
Preferred Stock shall be the number of shares of Common Stock issuable upon
conversion of the Preferred Stock immediately preceding the consummation of the
Transfer.
For example, if the Sale Notice contemplated a sale of 100
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Stockholder Shares by the Transferring Stockholder, and if
the Transferring Stockholder at such time owns 30% of all
Stockholder Shares and if one Other Stockholder elects to
participate and owns 20% of all Stockholder Shares, the
Transferring Stockholder would be entitled to sell 60 shares
(30% divided by 50% x 100 shares) and the Other Stockholder
would be entitled to sell 40 shares (20% divided by 50% x
100 shares).
Each Transferring Stockholder shall use best efforts to obtain the agreement of
the prospective transferee(s) to the participation of the Other Stockholders in
any contemplated Transfer, and to the inclusion (in the case of the Investors)
of the Old Preferred in the contemplated Transfer and to the inclusion (in the
case of the G Investors or H Investors) of the Class G Preferred or Class H
Preferred in the contemplated Transfer, and no Transferring Stockholder shall
transfer any of its Stockholder Shares to any prospective transferee if such
prospective transferee(s) declines to allow the participation of the Other
Stockholders or the inclusion of the Preferred Stock. Each Stockholder
transferring Stockholder Shares pursuant to this paragraph 4(c) shall pay its
pro rata share (based on the number of Stockholder Shares to be sold) of the
expenses incurred by the Stockholders in connection with such transfer and shall
be obligated to join on a pro rata basis (based on the number of Stockholder
Shares to be sold) in any indemnification or other obligations that the
Transferring Stockholder agrees to provide in connection with such transfer
(other than any such obligations that relate specifically to a particular
Stockholder such as indemnification with respect to representations and
warranties given by a Stockholder regarding such Stockholder's title to and
ownership of Stockholder Shares; provided that no holder shall be obligated in
connection with such Transfer to agree to indemnify or hold harmless the
transferees with respect to an amount in excess of the net cash proceeds paid to
such holder in connection with such Transfer).
(d) Permitted Transfers. The restrictions set forth in this paragraph
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4 shall not apply with respect to any Transfer of Stockholder Shares by any
Stockholder (i) in the case of an
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Executive or Founder, pursuant to applicable laws of descent and distribution or
among such Executive's or Founder's Family Group or (ii) in the case of an
Investor, a G Investor, or an H Investor among its Affiliates (collectively
referred to herein as "Permitted Transferees"); provided that the restrictions
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contained in this paragraph 4 shall continue to be applicable to the Stockholder
Shares after any such Transfer and provided further that the transferees of such
Stockholder Shares shall have agreed in writing to be bound by the provisions of
this Agreement affecting the Stockholder Shares so transferred. For purposes of
this Agreement, "Family Group" means an Executive's or Founder's spouse and
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descendants (whether natural or adopted) mother-in-law, father-in-law, brother-
in-law and/or sister-in-law, and the Executive's or Founder's father, mother,
brother or sister, niece or nephew or a trust established for the Executive or
Founder and/or one or more of the foregoing individuals and "Affiliate" of an
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Investor, a G Investor or an H Investor means any other Person, directly or
indirectly controlling, controlled by or under common control with such Investor
and any partner of an Investor which is a partnership.
Notwithstanding the foregoing, no party hereto shall avoid the
provisions of this Agreement by making one or more transfers to one or more
Permitted Transferees and then disposing of all or any portion of such party's
interest in any such Permitted Transferee.
(e) Termination of Restrictions. The restrictions set forth in this
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paragraph 4 shall continue with respect to each Stockholder Share until the
earlier of (i) the date on which such Stockholder Share has been transferred in
a Public Sale (or pursuant to paragraph 8 hereof), or (ii) the date on which
such Stockholder Share has been transferred pursuant to this paragraph 4 (other
than subparagraph 4(d)).
5. Legend. Each certificate evidencing Stockholder Shares and each
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certificate issued in exchange for or upon the transfer of any Stockholder
Shares (if such shares remain Stockholder Shares after such transfer) shall be
stamped or otherwise imprinted with a legend in substantially the following
form:
"The securities represented by this certificate are subject
to an Amended and Restated Stockholders Agreement dated as
of June [_ ], 1999 among the issuer of such securities (the
"Company") and certain of the Company's stockholders, as
amended and modified from time to time. A copy of such
Stockholders Agreement shall be furnished without charge by
the Company to the holder hereof upon written request."
The Company shall imprint such legend on certificates evidencing Stockholder
Shares outstanding as of the date hereof. The legend set forth above shall be
removed from the certificates evidencing any shares which cease to be
Stockholder Shares in accordance with this Agreement.
6. Transfer. Prior to transferring any Stockholder Shares (other
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than a Public Sale, an Approved Sale or a Sale of the Company) to any Person,
the holders of Stockholder Shares shall cause the prospective transferee to be
bound by this Agreement and to execute and
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deliver to the Company and the other holders of Stockholder Shares a counterpart
of this Agreement.
7. Definitions.
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"Board" has the meaning set forth in the preamble.
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"Class G Stockholder Shares" means (i) any Common Stock purchased or
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otherwise acquired by any G Investor, (ii) any Class G Preferred Stock purchased
or otherwise acquired by any Stockholder, (iii) any capital stock or other
equity securities issued or issuable directly or indirectly upon conversion of
the Class G Preferred Stock, and (iv) any Common Stock issued or issuable with
respect to the securities referred to in clauses (i), (ii) and (iii) above by
way of stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization. As to
any particular shares constituting Class G Stockholder Shares, such shares shall
cease to be Stockholder Shares when they have been (x) effectively registered
under the Securities Act and disposed of in accordance with the registration
statement covering them or (y) sold to the public through a broker, dealer or
market maker pursuant to Rule 144 (or any similar provision then in force) under
the Securities Act.
"Class H Purchase Agreement" has the meaning set forth in the
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preamble.
"Class H Stockholder Shares" means (i) any Common Stock purchased or
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otherwise acquired by any H Investor, (ii) any Class H Preferred Stock purchased
or otherwise acquired by any Stockholder, (iii) any capital stock or other
equity securities issued or issuable directly or indirectly upon conversion of
the Class H Preferred Stock, and (iv) any Common Stock issued or issuable with
respect to the securities referred to in clauses (i), (ii) and (iii) above by
way of stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization. As to
any particular shares constituting Class H Stockholder Shares, such shares shall
cease to be Stockholder Shares when they have been (x) effectively registered
under the Securities Act and disposed of in accordance with the registration
statement covering them or (y) sold to the public through a broker, dealer or
market maker pursuant to Rule 144 (or any similar provision then in force) under
the Securities Act.
"Common Stock" means the Company's Class A Common Stock, par value
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$.01 per share.
"Company" has the meaning set forth in the preamble.
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"Executives" has the meaning set forth in the preamble.
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"G Investor Director" has the meaning set forth in paragraph
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1(a)(ii)(B).
"Independent Third Party" means any Person who, immediately prior to
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the contemplated transaction, does not own in excess of 5% of the Company's
Common Stock on a
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fully-diluted basis (a "5% Owner"), who is not controlling, controlled by or
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under common control with any such 5% Owner and who is not the spouse or
descendent (by birth or adoption) of any such 5% Owner or a trust for the
benefit of such 5% Owner and/or such other Persons.
"Industry Directors" has the meaning set forth in paragraph
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1(a)(ii)(D)(1).
"Initial Conversion Price" of the Class G Convertible Preferred Stock
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shall be equal to $5.80 per share and for the Class H Convertible Preferred
Stock shall be equal to $8.00 per shall (each as adjusted to reflect stock
splits, stock dividends, combinations of shares and the like).
"Investor Directors" has the meaning set forth in paragraph
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1(a)(ii)(A).
"Investors" has the meaning set forth in the preamble.
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"Outside Director" has the meaning set forth in paragraph
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1(a)(ii)(D)(2).
"Permitted Transferee" has the meaning set forth in paragraph 4(d)
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hereof.
"Person" means an individual, a partnership, a corporation, a limited
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liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Preferred Stock" means the Company's Class A Convertible Preferred
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Stock, Class B Convertible Preferred Stock, Class C Convertible Preferred
Stock, Class D Convertible Preferred Stock, Class E Convertible Preferred
Stock, Class G Convertible Preferred Stock and Class H Convertible
Preferred Stock.
"Public Sale" means any sale of Stockholder Shares to the public
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pursuant to an offering registered under the Securities Act or sales
pursuant to the provisions of Rule 144 adopted under the Securities Act or
similar rule then in effect.
"Qualified Public Offering" means the sale in an underwritten public
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offering of shares of Common Stock (a "Public Offering") in which the price
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paid for each such share by the public shall be at least equal to 3.0
multiplied by the Initial Conversion Price.
"Sale of the Company" means the sale of the Company to an Independent
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Third Party or group of Independent Third Parties pursuant to which such
party or parties acquire (i) capital stock of the Company possessing the
voting power under normal circumstances to elect a majority of the
Company's board of directors (whether by merger, consolidation or sale or
transfer of the Company's capital stock) or (ii) all or substantially all
of the Company's assets determined on a consolidated basis.
"Securities Act" means the Securities Act of 1933, as amended from
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time to time.
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"Stockholder Shares" means (i) any Common Stock purchased or otherwise
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acquired by any Stockholder, (ii) any Preferred Stock purchased or
otherwise acquired by any Stockholder, (iii) any capital stock or other
equity securities issued or issuable directly or indirectly upon conversion
of the Preferred Stock, and (iv) any Common Stock issued or issuable with
respect to the securities referred to in clauses (i), (ii) and (iii) above
by way of stock dividend or stock split or in connection with a combination
of shares, recapitalization, merger, consolidation or other reorganization.
As to any particular shares constituting Stockholder Shares, such shares
shall cease to be Stockholder Shares when they have been (x) effectively
registered under the Securities Act and disposed of in accordance with the
registration statement covering them or (y) sold to the public through a
broker, dealer or market maker pursuant to Rule 144 (or any similar
provision then in force) under the Securities Act.
"Stockholders" has the meaning set forth in the preamble.
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"Subsidiary" means, with respect to any Person, any corporation,
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limited liability company, partnership, association or other business
entity of which (i) if a corporation, a majority of the total voting power
of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a
combination thereof, or (ii) if a limited liability company, partnership,
association or other business entity, a majority of the limited liability
company, partnership or other similar ownership interest thereof is at the
time owned or controlled, directly or indirectly, by any Person or one or
more Subsidiaries of that Person or a combination thereof. For purposes
hereof, a Person or Persons shall be deemed to have a majority ownership
interest in a limited liability company, partnership, association or other
business entity if such Person or Persons shall be allocated a majority of
limited liability company, partnership, association or other business
entity gains or losses or shall be or control the managing director or
general partner of such limited liability company, partnership, association
or other business entity.
"Transfer" has the meaning set forth in paragraph 4(a).
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8. Sale of the Company.
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(a) If the Board and the G Investor Director approve a Sale of the
Company (the "Approved Sale"), the holders of Stockholder Shares shall consent
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to and raise no objections against the Approved Sale of the Company, and if the
Approved Sale of the Company is structured as a sale of stock, the holders of
Stockholder Shares shall agree to sell their Stockholder Shares on the terms and
conditions approved by the Board and the G Investor Director provided, however,
that (i) the terms of such Approved Sale are no more favorable to the G
Investors or H Investors than to the holders of Stockholder Shares; and (ii)
such Approved Sale is to an Independent Third Party . If the provisions of this
paragraph 8(a) are met, the holders of Stockholder Shares shall take all
necessary and desirable actions in connection with the
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consummation of the Approved Sale of the Company. The provisions of this Section
8 shall only apply after the occurrence of an Event of Noncompliance under the
Company's Restated Certificate of Incorporation and if a majority of the
Company's Board has been elected by the G Investors or H Investors in accordance
with Section 8B(ii) of the Company's Restated Certificate of Incorporation.
(b) The obligations of the holders of Stockholder Shares with respect
to the Approved Sale of the Company are subject to the satisfaction of the
following conditions: (i) upon the consummation of the Approved Sale, all of the
holders of Common Stock shall receive the same form and amount of consideration
per share of Common Stock, or if any holders of Common Stock are given an option
as to the form and amount of consideration to be received, all holders shall be
given the same option; and (ii) all holders of then currently exercisable rights
to acquire shares of Common Stock shall be given an opportunity to either (A)
exercise such rights prior to the consummation of the Approved Sale and
participate in such sale as holders of Common Stock or (B) upon the consummation
of the Approved Sale, receive in exchange for such rights consideration equal to
the amount determined by multiplying (1) the same amount of consideration per
share of Common Stock received by the holders of Common Stock in connection with
the Approved Sale less the exercise price per share of Common Stock of such
rights to acquire Common Stock by (2) the number of shares of Common Stock
represented by such rights.
(c) If the Company or the holders of the Company's securities enter
into any negotiation or transaction for which Rule 506 (or any similar rule then
in effect) promulgated by the Securities Exchange Commission may be available
with respect to such negotiation or transaction (including a merger,
consolidation or other reorganization), the holders of Executive Stock shall at
the request of the Company, appoint a "purchaser representative" (as such term
is defined in Rule 501) reasonably acceptable to the Company. If any holder of
Executive Stock appoints a purchaser representative designated by the Company,
the Company shall pay the fees of such purchaser representative. However, if
any holder of Executive Stock declines to appoint the purchaser representative
designated by the Company, such holder shall appoint another purchaser
representative (reasonably acceptable to the Company), and such holder shall be
responsible for the fees of the purchaser representative so appointed.
(d) Stockholders and any other holders of Stockholder Shares (if any)
shall bear their pro-rata share (based upon the number of shares sold) of the
costs of any sale of Stockholder Shares pursuant to an Approved Sale to the
extent such costs are incurred for the benefit of all holders of Stockholder
Shares and are not otherwise paid by the Company or the acquiring party. Costs
incurred by Stockholders and the other holders of Stockholder Shares on their
own behalf shall not be considered costs of the transaction hereunder.
(e) The provisions of this paragraph 8 shall terminate upon the
completion of a Qualified Public Offering.
9. Transfers in Violation of Agreement. Any Transfer or attempted
-----------------------------------
Transfer of any Stockholder Shares in violation of any provision of this
Agreement shall be void, and the
-11-
Company shall not record such Transfer on its books or treat any purported
transferee of such Stockholder Shares as the owner of such shares for any
purpose.
10. Amendment and Waiver. Except as otherwise provided herein, no
--------------------
modification, amendment or waiver of any provision of this Agreement shall be
effective against the Company or the Stockholders unless such modification,
amendment or waiver is approved in writing by the Company; the Founders and the
Investors holding a majority of Stockholder Shares held by the Founders and the
Investors as a group; the holders of 60% of the Class G Stockholder Shares; and
the holders of 60% of the Class H Stockholder Shares, respectively. The failure
of any party to enforce any of the provisions of this Agreement shall in no way
be construed as a waiver of such provisions and shall not affect the right of
such party thereafter to enforce each and every provision of this Agreement in
accordance with its terms.
11. Severability. Whenever possible, each provision of this
------------
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
the validity, legality or enforceability of any other provision of this
Agreement in such jurisdiction or affect the validity, legality or
enforceability of any provision in any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.
12. Entire Agreement. Except as otherwise expressly set forth
----------------
herein, this Agreement embodies the complete agreement and understanding among
the parties hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way, including, without limitation: (i) the Amended and Restated
Stockholders Agreement dated December 18, 1985 as amended by Amendment No.1 to
the Amended and Restated Stockholders Agreement dated October 11, 1988; (ii) the
Stockholders Agreement dated August 24, 1983 as amended by Amendment No. 1 to
Stockholders Agreement dated December 20, 1984; or (iii) the Amended and
Restated Stockholders Agreement dated October 1, 1997.
13. Successors and Assigns. Except as otherwise provided herein,
----------------------
this Agreement shall bind and inure to the benefit of and be enforceable by the
Company and its successors and assigns and the Stockholders and any subsequent
holders of Stockholder Shares and the respective successors and assigns of each
of them, so long as they hold Stockholder Shares.
14. Counterparts. This Agreement may be executed in multiple
------------
counterparts, each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
15. Remedies. The Company, the Investors, the G Investors and the H
--------
Investors shall be entitled to enforce their rights under this Agreement
specifically, to recover damages by reason of any breach of any provision of
this Agreement and to exercise all other
-12-
rights existing in their favor. The parties hereto agree and acknowledge that
money damages would not be an adequate remedy for any breach of the provisions
of this Agreement and that the Company, any Investor, any G Investor and any H
Investor may in its sole discretion apply to any court of law or equity of
competent jurisdiction for specific performance and/or injunctive relief
(without posting a bond or other security) in order to enforce or prevent any
violation of the provisions of this Agreement.
16. Notices. Any notice provided for in this Agreement shall be in
-------
writing and shall be either personally delivered, or mailed first class mail
(postage prepaid) or sent by reputable overnight courier service (charges
prepaid) to the Company at the address set forth below and to any other
recipient at the address indicated on the schedules hereto and to any subsequent
holder of Stockholder Shares subject to this Agreement at such address as
indicated by the Company's records, or at such address or to the attention of
such other person as the recipient party has specified by prior written notice
to the sending party. Notices shall be deemed to have been given hereunder when
delivered personally, three days after deposit in the U.S. mail and one day
after deposit with a reputable overnight courier service. The Company's address
is:
MatrixOne, Inc.
Two Executive Drive
Chelmsford, MA 01824
Xxxxxxx X. Xxxxxxxxxx
Chief Financial Officer
with copies (which shall not constitute notice) to:
--------------------------------------------------
Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
High Street Tower
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Xx., Esq.
17. Governing Law. All issues and questions concerning the
-------------
construction, validity, interpretation and enforceability of this Agreement and
the exhibits and schedules hereto shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without giving effect to any
choice of law or conflict of law rules or provisions (whether of the
Commonwealth of Massachusetts or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Delaware.
In furtherance of the foregoing, the internal law of the State of Delaware shall
control the interpretation and construction of this Agreement (and all schedules
and exhibits hereto), even though under that jurisdiction's choice of law or
conflict of law analysis, the substantive law of some other jurisdiction would
ordinarily apply.
18. Business Days. If any time period for giving notice or taking
-------------
action hereunder expires on a day which is a Saturday, Sunday or legal holiday
in the state in which the Company's chief-executive office is located, the time
period shall automatically be extended to the business day immediately following
such Saturday, Sunday or legal holiday.
-13-
19. Descriptive Headings. The descriptive headings of this Agreement
--------------------
are inserted for convenience only and do not constitute a part of this
Agreement.
* * * *
-14-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
MATRIXONE, INC.
By: /s/ Xxxx X. X'Xxxxxxx
---------------------------------
Xxxx X. X'Xxxxxxx
Its: Chief Executive Officer
FOUNDERS:
--------
/s/ Xxxxxxx X. Xxxxx
--------------------------------------
Xxxxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxxxx
--------------------------------------
Xxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxxx
--------------------------------------
Xxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxx
--------------------------------------
Xxxxx X. Xxxxx
H INVESTORS:
-----------
GILDE IT FUND
By: /s/ Authorized Signatory
------------------------------
Title: Investment Director
------------------------------
-15-
XXXXXXX XXXXX CAPITAL PARTNERS V, L.P.
By: Xxxxxxx Xxxxx Capital Management
Company, L.L.C., its General Partner
By: /s/ Xxxxx Xxxxxxxx
---------------------------------
Xxxxx Xxxxxxxx
Its: Managing Director
G INVESTORS:
-----------
AMERICAN RESEARCH &
DEVELOPMENT I, L.P.
By: /s/ Authorized Signatory
---------------------------------
Vice President
PRIVATE EQUITY INVESTMENT FUND, L.P.
By: Private Equity Investors, Inc.
By: /s/ Authorized Signatory
---------------------------------
Title: Managing Director
---------------------------------
FAIRFIELD INVESTORS II, L.P.
By: /s/ Authorized Signatory
----------------------------------
Title: General Partner
--------------------------------
-16-
GILDE IT FUND
By: /s/ Authorized Signatory
-----------------------------------
Title: Investment Director
-----------------------------------
THE XXXXX FOUNDATION
By: /s/ Xxxxx Xxxxx
-----------------------------------
Xxxxx Xxxxx
By: /s/ Xxxxxx X. Xxxxx, Xx.
-----------------------------------
Xxxxxx X. Xxxxx, Xx.
XXXXXXX XXXXX CAPITAL PARTNERS V, L.P.
By: Xxxxxxx Xxxxx Capital Management
Company, L.L.C., its General Partner
By: /s/ Xxxxx Xxxxxxxx
----------------------------------
Xxxxx Xxxxxxxx
Its: Managing Director
-17-
INVESTORS:
---------
AMERICAN RESEARCH &
DEVELOPMENT I, L.P.
By: /s/ Authorized Signatory
-----------------------------------------
General Partner
XXXXXX CIP, L.P.
By: /s/ Authorized Signatory
-----------------------------------------
BERKSHIRE PARTNERS II, L.P.
By: /s/ Authorized Signatory
-----------------------------------------
DSV PARTNERS III, L.P.
By: /s/ Authorized Signatory
-----------------------------------------
DSV PARTNERS IV, L.P.
By: /s/ Authorized Signatory
-----------------------------------------
EVERGREEN I LIMITED PARTNERSHIP
By its General Partner,
Back Bay Partners L.P.
By one of its General Partners, Xxxx Xxxxxxx
Venture Capital Management Inc.
By: /s/ Authorized Signatory
-----------------------------------------
-18-
XXXXXX, HOLLAND FUND, L.P.
By its General Partner,
Xxxxxx, Xxxxxxx Partners
By: /s/ Authorized Signatory
----------------------------------------
Managing General Partner
OXFORD VENTURE FUND III, LIMITED
PARTNERSHIP
By its General Partner,
Oxford Partners III, Limited Partnership
By: /s/ Authorized Signatory
----------------------------------------
General Partner
OXFORD VENTURE FUND II LIMITED
PARTNERSHIP
By its General Partner,
Oxford Partners II
By: /s/ Authorized Signatory
----------------------------------------
Partner
PRIVATE EQUITY INVESTMENT FUND, L.P.
By: /s/ Authorized Signatory
----------------------------------------
LOMBARD ASSOCIATES
By: /s/ Authorized Signatory
----------------------------------------
-19-
THE XXXXXX XXXXX FUND
By: /s/ Authorized Signatory
--------------------------------------
VENTURE FOUNDERS 1983, LIMITED
PARTNERSHIP
By its General Partner,
Venture Management Limited Partnership
By: /s/ Xxxxxx Xxxxxxxx
--------------------------------------
General Partner
VENTURE FOUNDERS CAPITAL LIMITED
PARTNERSHIP
By its General Partner,
Venture Founders Partners Limited Partnership
By: /s/ Xxxxxx Xxxxxxxx
--------------------------------------
General Partner
/s/ Xxxxxxx X. Xxxxx
------------------------------------------
Xxxxxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxxx
------------------------------------------
Xxxxxxx X. Xxxxx
/s/ Xxxxxx Xxxxxxx, Jr.
------------------------------------------
Xxxxxx Xxxxxxx, Jr.
-20-
/s/ Xxxx X'Xxxxxxx
-------------------------------
Xxxx X'Xxxxxxx
/s/ Xxxxxxx Xxxxx
-------------------------------
Xxxxxxx Xxxxx
/s/ Xxxxx XxXxxxx
-------------------------------
Xxxxx XxXxxxx
/s/ Xxxxxxx Xxxxx Xxxxxxx
-------------------------------
Xxxxxxx Xxxxx-Xxxxxxx
/s/ Xxx Xxxxxxxx
-------------------------------
Xxx Xxxxxxxx
/s/ Xxxx Xxxxxxxxx
-------------------------------
Xxxx Xxxxxxxxx
/s/ Xxxxx Xxxxxxxxx
-------------------------------
Xxxxx Xxxxxxxxx
-21-
SCHEDULE OF EXECUTIVES
----------------------
---------------------------------------------------------------------------
Xxxx X'Xxxxxxx President & CEO
---------------------------------------------------------------------------
Xxxxxxx Xxxxx V.P. & General Manager Matrix
---------------------------------------------------------------------------
Xxxxx XxXxxxx V.P. Engineering Matrix
---------------------------------------------------------------------------
Xxxxxxx Xxxxx-Xxxxxxx V.P. Matrix Applications
---------------------------------------------------------------------------
Xxx Xxxxxxxx V.P. Matrix Professional Services
---------------------------------------------------------------------------
Xxxx Xxxxxxxxx V.P. Marketing
---------------------------------------------------------------------------
Xxxxx Xxxxxxxxx V.P. Research
---------------------------------------------------------------------------
-22-
SCHEDULE OF INVESTORS
---------------------
Xxxxxxx X. Xxxxx
Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxx
American Research & Development I, L.P.
Berkshire Partners II, X.X.
Xxxxxx CIP, L.P.
DSV Partners III, L.P.
DSV Partners IV, L.P.
Evergreen I Limited Partnership
Xxxxxx Xxxxxxx, Jr.
Xxxxxxx Family Growth Portfolio
Lombard Associates
Xxxxxx, Xxxxxxx Fund, L.P.
Oxford Venture Fund II, Limited Partnership
Oxford Venture Fund III, Limited Partnership
Private Equity Investment Fund, L.P.
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
The Xxxxxx Xxxxx Fund
Venture Founders Capital Limited Partnership
Venture Founders 1983, Limited Partnership
-23-
SCHEDULE OF G INVESTORS
-----------------------
Name and Address Number of Stockholder Shares
---------------- ----------------------------
American Research & Development I, L.P. 43,103
00 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attn: Xxx Xxxxxx
Private Equity Investment Fund, L.P. 51,724
Private Equity Investors, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
Fairfield Investors II, L.P. 34,483
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
The Xxxxx Foundation 43,103
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxx
Xxxxxx Xxxxx, Xx. 0,000
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxx Xxxxxx
Xxxx Xxxxxx Xxxxx
Xxxxxx, XX 00000
Gilde IT Fund 463,000
Xxxx Averink
Gilde Investment Management
Xxxxxxxxxx 00
X.X. Xxx 00000
Xxxxxxx 0000XX
Xxxxxxxxxxx
Xxxxxxx Xxxxx Capital Partners V, L.P. 1,261,139
000 Xxxx Xxxxxx, Xxx. 0000
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
TOTAL 1,899,138
-24-
SCHEDULE OF H INVESTORS
-----------------------
Name and Address Number of Stockholder Shares
---------------- ----------------------------
Gilde IT Fund 201,405
Xxxx Averink
Gilde Investment Management
Xxxxxxxxxx 00
X.X. Xxx 00000
Xxxxxxx 0000XX
Xxxxxxxxxxx
Xxxxxxx Xxxxx Capital Partners V, L.P. 548,595
000 Xxxx Xxxxxx, Xxx. 0000
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
TOTAL 750,000
-25-
