Exhibit 4.2
EXACTTARGET, INC.
AMENDED AND RESTATED STOCKHOLDERS'
AGREEMENT
November 8, 2006
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THIS AMENDED AND RESTATED
STOCKHOLDERS' AGREEMENT , dated as of
November 8, 2006, by and among EXACTTARGET, INC. , a
Delaware corporation (the " Corporation "), and the
Stockholders identified on Annex I hereto. |
PREAMBLE
The
Stockholders believe it to be in the best interest of the
Corporation and the Stockholders to provide for the continued
stability of the business and policies of the Corporation and its
subsidiaries, as the same may exist from time to time, and, to that
end, the parties hereto set forth this Agreement.
The Company and
certain of the Stockholders were parties to that certain
Stockholders' Agreement, dated July 15, 2004 (the "Prior
Agreement"), and the Stockholders purchasing Series D
Preferred Stock desire to amend and restate the Prior Agreement to
provide the Stockholders purchasing Series D Preferred Stock
with the rights and privileges as set forth herein.
ACCORDINGLY, in
consideration of the mutual covenants and agreements contained in
this Agreement, the receipt and sufficiency of which is are hereby
acknowledged, the parties hereto agree to amend and restate the
Prior Agreement in its entirety as follows:
ARTICLE I.
DEFINITIONS; RULES OF
CONSTRUCTION
The following
terms have the following meanings:
"
Acceptance Notice "
shall have the meaning set forth in Section 3.3(a)(ii) .
"
Affiliate " means, with
respect to any Person, any (a) director, officer, limited or
general partner, member or stockholder holding 5% or more of the
outstanding capital stock or other equity interests of such Person,
(b) spouse, parent, sibling or descendant of such Person (or a
spouse, parent, sibling or descendant of a Person specified in
clause (a) above relating to such Person) and (c) other
Person that, directly or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common
control with, such Person. The term "control" includes, without
limitation, the possession, directly or indirectly, of the power to
direct the management and policies of a Person, whether through the
ownership of voting securities, by contract or
otherwise.
"
Approved Sale " shall
have the meaning set forth in Section 3.6 .
"
Board " means the Board
of Directors of the Corporation.
"
Charter " means the
Amended and Restated Certificate of Incorporation of the
Corporation in effect as of the date hereof, as the same may be
amended, modified or supplemented after the date hereof.
"
Common Stock " shall
mean the Common Stock of the Corporation, $0.001 par value per
share.
"
Common Stockholder Directors
" shall have the meaning set forth in Section
2.1(b)(iii) .
"
Co-Sale Notice " shall
have the meaning set forth in Section 3.4(a)(i) .
"
Co-Sale Offeree " shall
have the meaning set forth in Section 3.4(a) .
"
Co-Sale Offeror " shall
have the meaning set forth in Section 3.4(a) .
"
Director Indemnification Agreement
" means the Director Indemnification Agreements
between the Corporation and each of the directors of the
Corporation, as may be amended, modified or supplemented from time
to time.
"
Equity Securities "
means all shares of capital stock of the Corporation, all
securities convertible into or exchangeable for shares of capital
stock of the Corporation, and all options, warrants, and other
rights to purchase or otherwise acquire from the Corporation shares
of such capital stock, including any stock appreciation or similar
rights, contractual or otherwise.
"
Excluded Stock " shall
have the meaning set forth in the Charter.
"
First Offer " shall
have the meaning set forth in Section 3.3(a)(i) .
"
First Offer Number "
shall have the meaning set forth in Section 3.5(b) .
"
First Offeror " shall
have the meaning set forth in Section 3.3(a) .
"
First Offer Period "
shall have the meaning set forth in Section 3.5(a) .
"
Full Allotment " shall
have the meaning set forth in Section 3.3(a)(ii) .
"
Group "
means:
(a) in
the case of any Stockholder who is an individual, (i) such
Stockholder, (ii) the spouse or lineal descendants of such
Stockholder (or any guardian, trustee or custodian for the benefit
of such Persons), (iii) all trusts for the benefit of such
Stockholder, (iv) all Persons principally owned by and/or
organized or operating for the benefit of any of the foregoing and
(v) all Affiliates of such Stockholder;
(b) in
the case of any Stockholder that is a partnership, (i) such
Stockholder, (ii) its limited, special and general partners,
(iii) any Person to which such Stockholder shall Transfer all
or substantially all of its assets, and (iv) all Affiliates
and employees of and consultants to, such Stockholder or any of its
Affiliates; and
(c) in
the case of any Stockholder which is a corporation or a limited
liability company, (i) such Stockholder, (ii) its
stockholders or members as the case may be, (iii) any Person
to which such Stockholder shall Transfer all or substantially all
of its assets, and (iv) all Affiliates of such
Stockholder.
"
Insight Directors "
shall have the meaning set forth in Section 2.1(b)(i) .
"
Liquidation " shall
have the meaning set forth in the Charter.
"
Majority Holders "
shall mean the holders of a majority of the Equity Securities of
the Corporation, including the holders of a majority of the
Series C Investor Shares.
"
Management Stockholder "" means Scott Dorsey, Chris Baggott and Peter
McCormick.
"
Montagu Newhall "
means, collectively, Montagu Newhall Global
Partners II, L.P.; Montagu Newhall Global
Partners II-A, L.P.; Montagu Newhall Global
Partners II-B, L.P.; Montagu Newhall Global
Partners III, L.P.; Montagu Newhall Global
Partners III-A, L.P.; and Montagu Newhall Global
Partners III-B, L.P.
"
New Securities " means
all Equity Securities other than Excluded Stock and the
Series D Preferred Stock issued under that certain Securities
Purchase Agreement, dated as of November 8, 2006, by and among
the Company and the investors party thereto.
"
Non-Competitor " means
a Person that is not in the business of providing or selling any
services or products which are the same as, or substantially
similar to, any services or products primarily provided or sold by
the Company or otherwise engaged in a business that is primarily
the same as, or substantially similar to, the business of the
Company.
"
Offer " shall have the
meaning set forth in Section 3.5(a) .
"
Offered Shares " shall
have the meaning set forth in Section 3.3(a)(i) .
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"
Person " shall be
construed in the broadest sense and means and includes a natural
person, a partnership, a corporation, an association, a joint stock
company, a limited liability company, a trust, a joint venture, an
unincorporated organization and any other entity and any federal,
state, municipal, foreign or other government, governmental
department, commission, board, bureau, agency or instrumentality,
or any private or public court or tribunal.
"
Preferred Stock " means
the Series A Preferred Stock of the Corporation, par value
$0.001 per share, the Series B Preferred Stock of the
Corporation, par value $0.001 per share, the Series C
Preferred Stock, and the Series D Preferred Stock.
"
Pro Rata Amount "
means, with respect to any Stockholder, the quotient obtained by
dividing (i) the number of shares of Common Stock held by such
Stockholder by (ii) the aggregate number of shares of Common
Stock held by all Stockholders or class of Stockholders (as
applicable), assuming in each case the conversion or exchange of
all securities by their terms convertible into or exchangeable for
Common Stock and the exercise of all vested and "in the money"
options to purchase or rights to subscribe for Common Stock
(including warrants) or such convertible or exchangeable
securities.
"
Purchase Notice " shall
have the meaning set forth in Section 3.5(b).
"
QIPO " shall have the
meaning set forth per the term "Series C QIPO" in the
Chapter.
"
Registration Rights Agreement
" shall have the meaning set forth in Section
"Required Sale Notice" shall have the meaning set forth in
Section 3.6.
"
Rights Holder " shall
mean (i) each Series C Investor; (ii) each
Series D Investor for so long as such Series D Investor
holds at least twenty percent (20%) of the shares of Series D
Preferred Stock purchased by such Series D Investor on the
Series D Original Issue Date (as defined in the Charter);
(iii) each Management Stockholder; and (iv) each
Stockholder (other than the Series C Investors, Series D
Investors and Management Stockholders) holding at least five
percent (5%) of the Common Stock of the Corporation, on a
fully-diluted basis (assuming exercise or conversion of all then
outstanding convertible securities, options, and warrants that are
then exercisable or convertible).
"
Sale of the Corporation " shall have the meaning set forth in the Charter.
"
Series A Preferred Stock
" means the Series A Preferred Stock of the
Corporation, par value $0.001 per share.
"
Series A/B Director " shall have the meaning set forth in Section 2.1(b)(ii) .
"
Series B Preferred Stock
" means the Series B Preferred Stock of the
Corporation, par value $0.001 per share.
"
Series C Investors " means the Persons designated on Annex I hereto as "Series C
Investors" and any Transferee of such Persons who or which agrees
in writing to be treated as a Series C Investor hereunder and
to be bound by the terms and comply with all applicable provisions
hereof.
"
Series C Investor Nominee
" shall have the meaning set forth in
Section 3.6(c) .
"
Series C Investor Shares
" means all Equity Securities of the Corporation
held at any time during the teen of this Agreement by the
Series C Investors,
"
Series C Preferred Stock
" means the Series C Preferred Stock of the
Corporation, par value $0.001 per share.
"
Series D Investors " means the Persons designated on Annex I hereto as
"Series D Investors" and any Transferee of such Persons who or
which agrees in writing to be treated as a Series D Investor
hereunder and to be bound by the terms and comply with all
applicable provisions hereof.
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"
Series D Preferred Stock
" means the Series D Preferred Stock of the
Corporation, par value $0.001 per share.
"
Shares " means all
Equity Securities held at any time during the term of this
Agreement by any Stockholder. Any reference to a number of "Shares"
shall treat each share of Preferred Stock as the number of shares
of Common Stock into which it is then convertible pursuant to the
Charter and any warrants or convertible securities as the number of
shares of Preferred Stock or Common Stock for which it is then
exercisable or convertible.
"
Stockholders " means
the stockholders identified on Annex
I hereto, including without limitation
the holders of Common Stock, holders of Series A Preferred
Stock, holders of Series B Preferred Stock, Series C
Investors, Series D Investors and Management Stockholders, and
includes any transferee of any such Person who or which agrees in
writing to be treated as a Stockholder hereunder pursuant to
Section 3.1 and to be bound by the terms and comply with all
applicable provisions hereof,
"
Subsidiary " means,
with respect to any Person, any other Person the majority of whose
Equity Securities or voting securities are directly or indirectly
owned or controlled by such Person.
"
Tag-Along-Notice "
shall have the meaning set forth in Section 3.4(c) .
"
Termination Date "
means the earlier to occur of: (i) the closing of a QIPO and
(ii) the closing of a Liquidation.
"
Third Party " means,
with respect to any Stockholder, any Person that is not
(i) the Corporation or (ii) a member of the Group of such
Stockholder.
"
Transfer " means to
sell, transfer, assign, pledge, hypothecate or otherwise dispose of
Shares, either voluntarily or involuntarily and with or without
consideration excluding any (i) transfers to the Corporation
by employees, consultants or other service providers of the
Corporation upon a termination of employment or other consulting or
similar engagement or (ii) transfers to the Corporation by any
Stockholders.
"
Transferee " means any
Person to whom a Stockholder shall Transfer Shares.
"
Transferor " means any
Person who Transfers Shares.
ARTICLE II.
BOARD
REPRESENTATION
2.1 Board Representation.
(a) The
Corporation and the Stockholders shall take such corporate actions
as may be required to ensure that (i) the number of directors
constituting the Board is at all times five (5), and (ii) the
presence of three directors (including at least one director
nominated under Section 2.1(b)(i) hereof) is
required to constitute a quorum of the Board.
(b) Subject
to Section 2.1(c)
below:
-
(i) Insight
Venture Partners IV, L.P. and Insight Venture Partners
(Cayman) IV, L.P. shall each be entitled: (A) to
nominate one individual to the Board to serve as directors
(collectively, the " Insight
Directors ") until their respective
successors are elected and qualified, (B) to nominate each
successor to the Insight Directors and (C) to direct the
removal from the Board of any director nominated under the
foregoing clauses (A) or (B);
(ii) the
holders of a majority of Series A Preferred Stock and
Series B Preferred Stock, voting together as a single class
and on an as converted to Common Stock basis, shall be entitled:
(A) to nominate one individual to the Board to serve as a
director (the " Series A/B
Director ") until his or
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her successor is elected and qualified,
(B) to nominate each successor to the Series A/B Director
and (C) to direct the removal from the Board of any director
nominated under the foregoing clauses (A) or (B);
(iii) the
holder(s) of a majority of all shares of Common Stock shall be
entitled: (A) to nominate two individual(s) to the Board to
serve as directors (the " Common
Stockholder Directors ") until his or her
successors are elected and qualified, (B) to nominate each
successor to the Common Stockholder Directors, and (C) to
direct the removal from the Board of any director nominated under
the foregoing clauses (A) or (B); and
(iv) one
authorized representative of Montagu Newhall shall be entitled to
attend each meeting of the Board of Directors as an observer and
shall be given timely notice of the Board of Directors meeting in
the same manner and at the same time that the directors of the
Company are given notice of such meeting; provided that the Board of
Directors, acting in the best interest of the Company or upon the
advice of corporate legal counsel, may, in its sole discretion,
exclude any such observer from any meeting or portion thereof
(including, without limitation, in order to protect confidential
information not known by the observer or to protect the
attorney-client privilege). Each such observer shall receive the
same written information (including, without limitation reports,
financial statements and notices, but excluding any written
information that may breach or waive a privilege) as is provided to
the directors in connection with such meeting; provided further that each such
observer shall enter into a confidentiality and non disclosure
agreement acceptable to the Company if not already subject to such
agreement.
(c) Each
nomination or any proposal to remove from the Board any director
shall be made by delivering to the Corporation a notice signed by
the party or parties entitled to such nomination or proposal. As
promptly as practicable, but in any event within ten
(10) days, after delivery of such notice, the Corporation
shall take or cause to be taken such corporate actions as may be
reasonably required to cause the election or removal proposed in
such notice. Such corporate actions may include calling a meeting
or soliciting a written consent of the Board, or calling a meeting
or soliciting a written consent of the Stockholders.
(d) The
Corporation shall execute and deliver a Director Indemnification
Agreement, substantially in the form of that executed and delivered
in favor of the initial Insight Directors, in favor of any other
Persons who shall become directors after the date
hereof.
2.2 Voting Agreement.
Each
Stockholder shall vote all Shares held by such Stockholder for the
election to the Board of all individuals nominated in accordance
with Section 2.1
and for the removal from the Board of all directors
proposed to be removed in accordance with Section 2.1 and shall take
all actions required on its behalf to give effect to the agreements
set forth in this Section 2.2 . Each
Stockholder shall use all reasonable efforts to cause each director
originally nominated by such Stockholder to vote for the election
to the Board of all individuals nominated in accordance with
Section 2.1 .
2.3 Interim Director.
The Corporation
shall notify each Stockholder of the occurrence of any vacancy in
any seat of the Board. If the Stockholders entitled to nominate a
successor to fill such vacancy fail to do so within 15 days
after delivery of such notice, such vacancy may be filled in
accordance with the By-laws of the Corporation until a successor
has been nominated and elected to the Board in accordance
with Sections 2.1 and 2.2 .
2.4 Committees; Subsidiaries.
(a) Each
Stockholder shall use all reasonable efforts to cause each director
of the Corporation nominated by such Stockholder to take such
corporate actions as may be reasonably required to
ensure
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that (i) the Board has at all times a
compensation committee and an audit committee and (ii) one
director nominated under Section 2.1(b)(i) shall be
appointed to each such committee. The Compensation Committee shall
approve all increases in executive compensation, executive bonuses
and all option grants (including the vesting schedules with respect
to such option grants). The Audit Committee shall approve the
engagement of the Corporation's auditors and approve the audit
prior to its issuance each year.
(b) The
Corporation and each Stockholder shall take, and each Stockholder
shall use all reasonable efforts to cause each director of the
Corporation nominated by such Stockholder to take, such corporate
actions as may be reasonably required to ensure that the
composition of the board of directors of all direct and indirect
Subsidiaries of the Corporation is identical to the composition of
the Board.
2.5 Meetings; Expenses; Compensation.
(a) Corporation
shall convene meetings of the Board at least once every three
months. Upon any failure by the Corporation to convene any meeting
required by this paragraph, a director nominated under
Section 2.1(b)(i) shall be empowered to convene such meeting.
(b) The
Corporation shall reimburse each director and observer who is not
an employee of the Corporation for his or her reasonable
out-of-pocket expenses (including travel) incurred in connection
with the attendance of meetings of the Board or any committee
thereof or the performance of his or her duties.
2.6 Protective Provisions.
As long as at
least twenty percent (20%) of the Series C Investor Shares
outstanding as of the Original Series C Issue Date (as defined
in the Charter) remain outstanding, the Corporation shall not take,
nor shall it permit any of its Subsidiaries to take, after the
Original Series C Issue Date, any of the following actions
without the prior written approval of the holders of a majority of
all outstanding Series C Investor Shares:
(a) (A)
issue or authorize any options (other than options or other
convertible securities (not to exceed 1,113,232 options or
convertible securities) issued pursuant to any of the Corporation's
stock incentive plans), or (B) issue or authorize any Equity
Securities, warrants, or options (other than as set forth in
(A) above) or other rights to purchase Equity Securities of
the Corporation, or (C) issue any stock appreciation or
similar rights, (D) create a bonus plan or program or issue
any bonuses or agree to issue bonuses, the payment of which is
contingent upon the occurrence of a Liquidation, change of control
or similar event, or (E) redeem, repurchase or acquire any
debt or Equity Securities (other than the Series C Investor
Shares, repurchases upon termination of service or employment of
consultants, directors, or employees pursuant to equity restriction
agreements or the exercise by the Corporation of contractual rights
of first refusal);
(b) take
any action that could result in a Liquidation;
(c) effect
any acquisition by the Corporation of any business (whether by
purchase of stock or assets) for consideration in excess of
$250,000, not included in the annual operating budget;
(d) incur
or have outstanding any indebtedness for borrowed money in an
amount greater than $250,000 in the aggregate;
(e) effect
any changes in the Charter, By-laws, or other governing documents
of the Corporation;
(f) effect
the sale of a material part of the Corporation or effect any sales,
leases, pledging or other dispositions of assets outside the
ordinary course of business;
(g) make
any material deviation from the annual operating budget and
business plans approved by the Board, including at least one
Insight Director;
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(h) make
investments in any other Person;
(i) alter
the size of the Board;
(j) agree
to or take any action which may alter, adversely affect or amend
the preferences, privileges or rights of the Series C Investor
Shares or create any class of securities that is senior to
or pari passu with the Series C Investor Shares;
(k) declare
or pay any dividends (other than with respect to the Series C
Investor Shares);
(l) grant
any exclusive rights to any intellectual property of the
Corporation;
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