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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into as of October 11, 1999, (the
"Effective Date") by and between XXXXXXX X. XXXXX (the "Employee") and HYPERION
SOLUTIONS CORPORATION, a Delaware corporation (the "Company").
1. DUTIES AND SCOPE OF EMPLOYMENT.
(a) POSITION. For the term of his employment under
this Agreement ("Employment"), the Company agrees to employ the Employee in the
position of Chief Executive Officer, reporting to the Board of Directors. In
addition, the Company agrees to elect the Employee as Chairman of the Board of
Directors promptly following his acceptance of the terms of this Agreement. It
is expected that the Employee's primary office will be in Sunnyvale, California,
at the Company's headquarters.
(b) OBLIGATIONS TO THE COMPANY. During the term of
his Employment, the Employee shall devote his full business efforts and time to
the Company. During the term of his Employment, without the prior written
approval of the Company (which shall not be unreasonably withheld), the Employee
shall not render services in any capacity to any other person or entity and
shall not act as a sole proprietor, partner or managing member of any other
person or entity or as a shareholder owning more than one percent of the stock
of any other corporation. The foregoing, however, shall not preclude the
Employee from engaging in reasonable community, school or charitable activities.
The Employee shall comply with the Company's policies and rules, as they may be
in effect from time to time during the term of his Employment.
(c) NO CONFLICTING OBLIGATIONS. The Employee
represents and warrants to the Company that he is under no obligations or
commitments, whether contractual or otherwise, that are inconsistent with his
obligations under this Agreement. The Employee represents and warrants that he
will not use or disclose, in connection with his employment by the Company, any
trade secrets or other proprietary information or intellectual property in which
he or any other person has any right, title or interest and that his employment
by the Company as contemplated by this Agreement will not infringe or violate
the rights of any other person. The Employee represents and warrants to the
Company that he has returned all property and confidential information belonging
to any prior employer.
2. COMPENSATION.
(a) SALARY. The Company shall pay the Employee as
compensation for his services a base salary at a gross annual rate of not less
than $400,000. Such salary shall be payable in accordance with the Company's
standard payroll procedures. (The annual compensation specified in this
Subsection (a), together with any increases in such compensation that the
Company may grant from time to time, is referred to in this Agreement as "Base
Compensation.").
(b) INCENTIVE BONUSES. Commencing with the Company's
fiscal year ending June 30, 2002, the Employee shall be eligible to be
considered for an annual incentive
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bonus with a target amount equal to 50% of the Employee's Base Compensation with
the potential for a greater amount at the discretion of the Company's Board of
Directors (the "Board") or its Compensation Committee in the event of
exceptional performance. Such bonus (if any) shall be awarded based on objective
or subjective criteria established in advance by the Board or its Compensation
Committee. The determinations of the Board or such Committee with respect to
such bonus shall be final and binding.
(c) RESTRICTED STOCK. The Company hereby grants the
Employee 100,000 shares of the Company's Common Stock, subject to certain
restrictions (the "Restricted Stock"), at a purchase price equal to its par
value of $0.001 per share, subject to the following additional terms:
(i) The aggregate purchase price has been paid
by, or on behalf of, the Employee.
(ii) The Restricted Stock is subject to the
terms of an agreement (the "Restricted Stock Agreement") that shall be
presented to the Employee by the officers of the Company within ten
(10) days of the Effective Date containing terms substantially similar
to those of this Agreement and, where applicable, of the Company's 1995
Stock Option/Stock Issuance Plan as amended and restated as of August
21, 1998 (the "Option/Issuance Plan"), a copy of which has been
provided to the Employee.
(iii) The Employee's interest will become fully
vested and all restrictions will lapse on 6,250 shares on the day
corresponding to the Effective Date of each successive third month
following the Effective Date, so that the Employee's interest will
become fully vested in all of the shares of Restricted Stock on the
anniversary of the Effective Date in 2003.
(iv) As of the Effective Date, the Employee has
full stockholder rights with respect to the shares of Restricted Stock
including the right to vote the shares and to receive dividends,
whether or not his interest in such shares is vested, provided however
that should the Employee cease to remain in service to the Company
while holding one or more unvested shares of Restricted Stock, such
unvested shares will be immediately surrendered to the Corporation for
cancellation and the Employee will have no further stockholder rights
with respect to such unvested shares.
(v) In the event of a Change in Control or
Corporate Transaction, as those terms are defined in the
Option/Issuance Plan, unvested shares of Restricted Stock shall
accelerate to the same extent that options are accelerated under the
Option/Issuance Plan. Additionally, the terms of the loan to the
Employee and of the Note will not be affected by such Change in Control
or Corporate Transaction, so that the Company or the successor
corporation, whichever is applicable, will continue to lend to the
Employee such funds as are described herein upon acceleration or upon
vesting of Employee's interest in the securities to the extent such
acceleration occurs.
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(d) LOAN. If the Employee elects treatment under
Section 83(b) of the Internal Revenue Code for income he may be deemed to have
received in connection with his purchase of all of the shares of Restricted
Stock, the Company will loan the Employee One Million Dollars ($1,000,000.00) in
exchange for a full-recourse promissory note from the Employee (the "Note"),
subject to the following terms and conditions:
(i) The Company will fund such loan to the
Employee in the principal amount no later than fifteen (15) business
days following the Employee's purchase of the Restricted Stock.
(ii) The Note will accrue interest at the
applicable federal rate for mid-term loans of 6.02%, compounded
annually, and shall have a term of six (6) years. Payment on the
outstanding principal and all accrued interest will be due on the
maturity date. The Note will be secured by the Restricted Stock and/or
such other collateral (if any) as the officer executing the security
agreement deems appropriate. In the event that the Employee terminates
his service with the Company before the term of the Note has lapsed,
the Note will become due and payable in full within thirty (30) days of
such termination.
(e) STOCK OPTIONS. The Company hereby agrees grant
to the Employee, as of the Effective Date, options to purchase 1,100,000 shares
of the Corporation's Common Stock, 500,000 of which (the "Plan Options") are to
be granted pursuant to the Option/Stock Issuance Plan and 600,000 of which (the
"Non-Plan Options") are to be granted under an option agreement between the
Corporation and the Employee, which agreement is attached as EXHIBIT A (the
"Option Agreement"). All of the granted options shall be subject to the
following terms:
(i) The Plan Options shall be considered
Incentive Stock Options to the maximum extent permitted in each
calendar year under Section 422(d) of the Internal Revenue Code of
1986, as amended. All other of the options granted shall be
non-statutory stock options.
(ii) All options shall have a term of ten (10)
years from the Effective Date, subject to earlier termination following
the optionee's cessation of service with the Company. The exercise
price of the options granted shall be equal to the closing price per
share on the Effective Date, as such price is reported by the Nasdaq
Stock Market, which price is deemed for purposes of the Option/Issuance
Plan and the Option Agreement to be the fair market value per share of
Common Stock as of the Effective Date.
(iii) One-quarter of the shares covered by such
options shall become exercisable on the anniversary of the Effective
Date and 1/48 of the shares covered by such options shall become
exercisable upon the day corresponding to the Effective Date of each of
the thirty-six months following the first anniversary of the Effective
Date, so that the options will be fully exercisable on the fourth
anniversary of the Effective Date in 2003.
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(iv) Should the Employee for any reason (other
than for Cause, as defined in Section 6 of this Agreement) cease to
remain in Service (as defined in the applicable option agreement) to
the Corporation while such options are outstanding, then the Employee
shall have a period of time as specified in the option agreements for
the Plan Options and the Non-Plan Options during which to exercise such
options, but in no event shall such options be exercisable at any time
after their expiration date.
(v) In each fiscal year of the Company that the
Employee chooses to exercise such options, he shall exercise those
options that are exercisable in the following order:
(A) First, the Employee shall exercise
exercisable Non-Plan Options until the aggregate spread
between the exercise price and the fair market value of option
shares on the date of exercise is equal to any excess of One
Million Dollars ($1,000,000.00) over the amount of
compensation other than from exercise of Plan Options that the
Employee reasonably expects to receive in such fiscal year.
(B) Second, the Employee shall exercise
exercisable Plan Options.
(C) The Employee shall not exercise
additional Non-Plan Options in such fiscal year until he has
exercised all of his then exercisable Plan Options.
(vi) The remaining terms and conditions of such
Plan Options shall be substantially as set forth in the Company's
standard form option agreement and the Option/Issuance Plan and the
remaining terms and conditions of the Non-Plan options are as set forth
in the Option Agreement in EXHIBIT A.
3. VACATION AND EMPLOYEE BENEFITS. During the term
of his Employment, the Employee shall be eligible for four weeks of paid
vacation per year of Employment. During the term of his Employment, the Employee
shall be eligible to participate in any employee benefit plans maintained by the
Company for senior executives, subject in each case to the generally applicable
terms and conditions of the plan in question and to the determinations of any
person or committee administering such plan. In addition, the Company will
reimburse Employee for the costs of membership in a health club of his choice.
4. BUSINESS EXPENSES. During the term of his
Employment, the Employee shall be authorized to incur necessary and reasonable
travel (including first class air travel), entertainment and other business
expenses in connection with his duties hereunder. The Company shall reimburse
the Employee for such expenses upon presentation of an itemized account and
appropriate supporting documentation, all in accordance with the Company's
generally applicable policies. For a period of two years from the date of this
Agreement, the Company will also reimburse Employee for all travel between his
family residence in Southern California and Hyperion locations in conjunction
with Company business and provide Employee
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with temporary living arrangements near such office of the Company as shall be
agreed upon by the Board and the Employee. Should Employee decide within the
first two years of his Employment to relocate his family to the vicinity of such
office of the Company as shall be agreed upon by the Board and the Employee, the
Company will reimburse Employee for all reasonable and customary expenses
associated with the relocation. This includes, but is not limited to, closing
costs associated with the sale of and purchase of a home, mortgage loan closing
costs and moving costs.
5. TERM OF EMPLOYMENT.
(a) BASIC RULE. The Company agrees to continue the
Employee's Employment, and the Employee agrees to remain in Employment with
the Company, from the Effective Date until the earlier of:
(i) The close of the applicable Initial Term
or Renewal Period, as determined under Subsection (b) below; or
(ii) The date when the Employee's Employment
terminates pursuant to Subsection (c) below.
(b) INITIAL TERM AND RENEWAL PERIODS. The initial
term of this Agreement shall end on October 11, 2001 (the "Initial Term").
Thereafter this Agreement shall automatically be renewed for successive 12-month
periods (the "Renewal Periods"), unless either party has given the other party
written notice of non-renewal not less than 90 days prior to the close of the
Initial Term or Renewal Period then in effect.
(c) EARLY TERMINATION. The Employee may terminate
his Employment at any time other than under Section 5(b) and for any reason (or
no reason) by giving the Company 30 days advance notice in writing. The Company
may terminate the Employee's Employment at any time and for any reason (or no
reason), and with or without Cause, by giving the Employee 30 days advance
notice in writing or, at the Company's option, pay in lieu of some or all of the
notice period. The Company may also, subject to applicable laws, terminate the
Employee's active Employment due to Disability by giving the Employee notice in
writing. For all purposes under this Agreement, "Disability" shall mean a
"disability" as defined by the Americans with Disabilities Act that renders the
Employee unable to perform one or more of the essential functions of his job and
which the Company is unable to accommodate reasonably without undue hardship.
The Employee's Employment shall terminate automatically in the event of his
death.
(d) EMPLOYMENT AT WILL. At all times, the Employee's
Employment with the Company shall be "at will." Any contrary representations
which may have been made to the Employee shall be superseded by this Agreement.
This Agreement shall constitute the full and complete agreement between the
Employee and the Company on the "at will" nature of the Employee's Employment,
which may only be changed in an express written agreement signed by the Employee
and a duly authorized officer of the Company.
(e) RIGHTS AND OBLIGATIONS UPON TERMINATION. Except
as expressly
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provided in Section 6, upon the termination of the Employee's Employment
pursuant to this Section 5, the Employee shall only be entitled to the
compensation, benefits and reimbursements described in Sections 2, 3 and 4 for
the period preceding the effective date of the termination. No incentive bonus
under Section 2(b) shall be payable for the year in which the Employee's
Employment terminates, unless the Employee is terminated without Cause, in which
the case the Employee shall be entitled to the payment of a prorated bonus for
such year. The payments under this Agreement shall fully discharge all
compensatory obligations of the Company to the Employee. The termination of this
Agreement shall not limit or otherwise affect the Employee's obligations under
Section 7. The Employee will also be required to repay the Note pursuant to
Section 2(d)(ii).
(f) COVENANT. Employee hereby agrees to resign
immediately upon the request of the Company from all offices and directorships
he may hold with the Company or any of its affiliates upon the termination of
his Employment for any reason.
6. TERMINATION BENEFITS.
(a) GENERAL MUTUAL RELEASE. Within seven (7) days of
the Employee's termination date, the Employee shall execute a general release
(in a form prescribed by the Company) of all known and unknown claims that he
may then have against the Company or persons affiliated with the Company and the
Company also agrees to provide the Employee with the same general release and
agreement for the benefit of the Employee.
(b) SEVERANCE PAY. Any other provision of this
Agreement notwithstanding, this Section (b) and Section (c) below shall not
apply unless (x) the Employee has executed the general release pursuant to
subsection (a) above, and (y) the Employee has agreed not to (and does not)
prosecute any legal action or other proceeding based upon any of such claims. If
such conditions are met, the Company shall pay the Employee his Base
Compensation for a thirty (30)-month period following the effective date of the
termination of his Employment as a full-time employee (the "Continuation
Period"), provided the Employee does not breach any provision of this Agreement
and:
(i) The Company terminates the Employee's
Employment as a full-time employee under Section 5(b) or Section 5(c)
for any reason other than Cause, Disability or death; or
(ii) The Employee resigns his Employment as
a full-time employee for Good Reason within 12 months following a
Change in Control, as defined below.
The Base Compensation under this Subsection (b) shall be paid at the rate in
effect at the time of the termination of Employment and in accordance with the
Company's standard payroll procedures.
The Company reserves the right to pay such severance pay to the Employee in any
combination of the following: x) cash; y) by accelerating vesting in some or all
of those shares of Restricted Stock that are unvested as of the termination
date; and z) by accelerating vesting in some or all of
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such stock options granted to the Employee that remain unvested as of the
termination date.
If the Company so chooses to accelerate vesting of either or both the Restricted
Stock and such stock options, the value of such Restricted Stock or stock option
shares will be calculated using the average of the closing trade price of the
Company's Common Stock for the twenty (20) trading days preceding the Employee's
termination date (the "Average Price"). The value of such severance pay which
the Company chooses to pay in the form of such accelerated Restricted Stock, if
any, will be equal to the number of shares so accelerated multiplied by the
excess of the Average Price over $0.001. The value of such severance pay which
the Company chooses to pay in the form of such accelerated stock option shares,
if any, will be equal to the number of shares so accelerated multiplied by the
excess of the Average Price over the exercise price of the stock option shares.
(c) EMPLOYEE BENEFITS. If Subsection (b) above
applies, the Company shall continue the coverage of the Employee and his
dependents (if applicable) under the employee benefit plans described in Section
3 during the Continuation Period. To the extent that such plans or the insurance
contracts or provider agreements associated with such plans do not permit the
extension of the Employee's coverage following the termination of his active
employment, the Company shall pay the Employee cash in an amount equal to the
cost to the Company of the coverage that cannot be provided. The cash payments
shall be made in accordance with Subsection (b) above.
(d) COBRA. If Subsection (b) above applies, and if
the Employee elects to continue his health insurance coverage under the
Consolidated Omnibus Budget Reconciliation Act ("COBRA") following the
termination of his Employment, then the date of the "qualifying event" for
purposes of COBRA shall be the Employee's last day of active employment.
(e) DEFINITION OF "CAUSE." For all purposes under
this Agreement, "Cause" shall mean:
(i) The Employee's failure to perform in a
satisfactory fashion one or more reasonable and lawful duties assigned
to the Employee by the Company under this Agreement, if such failure
continues for 15 days or more after the Company has given the Employee
written notice describing such failure and advising him of the
consequences of such failure under this Agreement, provided that such
notice shall be required only with respect to the first failure;
(ii) The Employee's conviction of, or a plea
of "guilty" or "no contest" to, a felony under the laws of the United
States or any state thereof;
(iii) The Employee's failure or refusal to
carry out the reasonable directives of the Company, if such failure
continues for three days or more after the Company has given the
Employee written notice describing such failure and advising him of the
consequences of such failure under this Agreement, provided that such
notice shall be required only with respect to the
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first failure;
(iv) Any breach of this Agreement, the
Proprietary Information and Inventions Agreement between the Employee
and the Company, or any other agreement between the Employee and the
Company;
(v) Threats or acts of violence directed at any
present, former or prospective employee, independent contractor,
vendor, customer or business partner of the Company (or any of the
Company's affiliates); or
(vi) The commission of any act of fraud,
embezzlement or dishonesty by Employee, any unauthorized use or
disclosure by Employee of confidential information or trade secrets of
the Company (or any of the Company's affiliates), or any other
intentional misconduct by Employee affecting the business or affairs of
the Company (or any of the Company's affiliates) in a material manner.
(f) DEFINITION OF "CHANGE IN CONTROL." For all
purposes under this Agreement except where indicated in Section 2(c), "Change
in Control" shall mean:
(i) The consummation of a merger or
consolidation of the Company with or into another entity or any other
corporate reorganization, if persons who were not stockholders of the
Company immediately prior to such transaction own immediately after
such transaction 50% or more of the voting power of the outstanding
securities of each of (A) the continuing or surviving entity or (B) any
direct or indirect parent corporation of such continuing or surviving
entity;
(ii) The sale, transfer or other disposition of
all or substantially all of the Company's assets, if persons who were
not stockholders of the Company immediately prior to such transaction
own immediately after such transaction 50% or more of the voting power
of the outstanding securities of each of (A) the continuing or
surviving entity or (B) any direct or indirect parent corporation of
such continuing or surviving entity;
(iii) A change in the composition of the Board,
as a result of which fewer than a majority of the incumbent directors
are directors who either (A) had been directors of the Company on the
date 24 months prior to the date of the event that may constitute a
Change in Control (the "original directors") or (B) were elected, or
nominated for election, to the Board with the affirmative votes of at
least a majority of the aggregate of the original directors who were
still in office at the time of the election or nomination and the
directors whose election or nomination was previously so approved;
(iv) Any transaction as a result of which any
person is the "beneficial owner" (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")),
directly or indirectly, of
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securities of the Company representing more than 50% of the total
voting power represented by the Company's then outstanding voting
securities. For purposes of this Paragraph (iv), the term "person"
shall have the same meaning as when used in sections 13(d) and 14(d) of
the Exchange Act but shall exclude (A) a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or of
a parent or subsidiary of the Company and (B) a corporation owned
directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of the common
stock of the Company; or
(v) Any change in control required to be
reported by Item 1 of Form 8-K of the Securities and Exchange
Commission or by Item 6(e) of Schedule 14A set forth in Rule 14a-101
under the Exchange Act (or by any successor of either).
A transaction shall not constitute a Change in Control if its sole purpose is to
change the state of the Company's incorporation or to create a holding company
that will be owned in substantially the same proportions by the persons who held
the Company's securities immediately before such transaction.
(g) DEFINITION OF "GOOD REASON." For all purposes
under this Agreement, "Good Reason" shall mean:
(i) A significant diminution in the nature or
scope of the Employee's authority, duties or responsibilities in effect
immediately prior to the Change in Control;
(ii) Any reduction in the rate of the Employee's
Base Compensation in effect immediately prior to the Change in Control
or a reduction of 25% or more in the value of the Employee's aggregate
compensation and benefits in effect immediately prior to the Change in
Control;
(iii) The relocation of the Employee's principal
place of employment to a site more than 25 miles removed from his
principal place of employment immediately prior to the Change in
Control; or
(iv) An increase of 25% or more in the
average amount of time per month that the Employee is required to be
away from his principal place of employment, relative to the average
amount of time per month that the Employee was required to be away from
his principal place of employment immediately prior to the Change in
Control.
7. EMPLOYEE'S COVENANTS.
(a) NON-SOLICITATION. During the period commencing
on the date of this Agreement and continuing until the second anniversary of the
date when the Employee's Employment terminated for any reason, the Employee
shall not directly or indirectly, personally or through others, solicit or
attempt to solicit (on the Employee's own behalf or on behalf of any
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other person or entity) either (i) the employment of any employee of the Company
or any of the Company's affiliates or (ii) the business of any customer of the
Company that is of the nature of the business being provided by the Company, or
of any of the Company's affiliates, with whom the Employee had contact during
his Employment. During the portion of such period following termination of the
Employee, the Employee shall not encourage or induce, or take any action that
has the effect of encouraging or inducing, any employee of the Company or any of
the Company's affiliates to terminate his or her employment.
(b) NON-DISCLOSURE. The Employee has entered into a
Proprietary Information and Inventions Agreement with the Company, which is
incorporated herein by reference.
(c) NON-COMPETITION. If Section 6(b) applies, the
Employee during the Continuation Period shall not, directly or indirectly (other
than on behalf of the Company or with the Company's prior written consent),
engage in a Competitive Business Activity in any of the locations listed in
Schedule A attached hereto. The term "Competitive Business Activity" shall mean:
(i) Engaging in, or managing or directing
persons engaged in, any business in which the Company or any of the
Company's affiliates is engaged at the time of the termination of the
Employee's Employment, whether independently or as an employee, agent,
consultant, advisor, independent contractor, proprietor, partner,
officer, director or otherwise;
(ii) Acquiring or having an ownership interest
in any entity that derives more than 15% of its gross revenues from any
business in which the Company or any of the Company's affiliates is
engaged at the time of the termination of the Employee's Employment,
except for ownership of 1% or less of any entity whose securities are
freely tradable on an established market; or
(iii) Participating in the financing, operation,
management or control of any firm, partnership, corporation, entity or
business described in Paragraph (ii) above.
(d) NON-DISPARAGEMENT. During the period commencing
on the date of this Agreement and continuing until the second anniversary of the
date when the Employee's Employment terminated for any reason, (i) the Employee
shall not directly or indirectly, personally or through others, disparage the
Company, its affiliates, its management, officers, employees or members of its
Board of Directors and (ii) the Company shall not, and it shall take reasonable
steps to cause its management and members of its Board of Directors not to,
directly or indirectly, personally or through others, disparage the Employee,
except that such disclosures by the Company that are made (a) to fulfill its
obligations under federal securities statutes and rules; (b) in response to a
valid order of a court or other governmental body of the United States or any
political subdivision thereof, or (c) pursuant to other of the Company's or such
individuals' duties required by law, will not violate the Company's obligation
under this subsection (d).
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(e) INJUNCTIVE RELIEF. The Employee acknowledges and
agrees that his failure to perform any of his covenants in this Section 7 would
cause irreparable injury to the Company and cause damages to the Company that
would be difficult or impossible to ascertain or quantify. Accordingly, without
limiting any other remedies that may be available with respect to any breach of
this Agreement, the Employee consents to the entry of an injunction to restrain
any breach of this Section 7, without any requirement to post a bond.
(f) SURVIVAL. The covenants in this Section 7 shall
survive any termination or expiration of this Agreement and the termination of
the Employee's Employment with the Company for any reason.
8. SUCCESSORS.
(a) COMPANY'S SUCCESSORS. This Agreement shall be
binding upon any successor (whether direct or indirect and whether by
purchase, lease, merger, consolidation, liquidation or otherwise) to all or
substantially all of the Company's business and/or assets. For all purposes
under this Agreement, the term "Company" shall include any successor to the
Company's business and/or assets which becomes bound by this Agreement.
(b) EMPLOYEE'S SUCCESSORS. This Agreement and all
rights of the Employee hereunder shall inure to the benefit of, and be
enforceable by, the Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
9. MISCELLANEOUS PROVISIONS.
(a) NOTICE. Notices and all other communications
contemplated by this Agreement shall be in writing and shall be deemed to have
been duly given when (i) personally delivered, (ii) delivered to the U.S. Postal
Service for delivery by registered or certified mail or (iii) delivered to a
comparable private service offering guaranteed deliveries in the ordinary course
of its business. Notice under clauses (ii) and (iii) shall be valid only if
delivery charges have been prepaid and a return receipt will be furnished. In
the case of the Employee, notice under clauses (ii) and (iii) shall be addressed
to him at the home address which he most recently communicated to the Company in
writing. In the case of the Company, notice under clauses (ii) and (iii) shall
be addressed to its corporate headquarters and directed to the attention of its
Secretary.
(b) MODIFICATIONS AND WAIVERS. No provision of this
Agreement shall be modified, waived or discharged unless the modification,
waiver or discharge is agreed to in writing and signed by the Employee and by an
authorized officer of the Company (other than the Employee). No waiver by either
party of any breach of, or of compliance with, any condition or provision of
this Agreement by the other party shall be considered a waiver of any other
condition or provision or of the same condition or provision at another time.
(c) WHOLE AGREEMENT. This Agreement supersedes any
prior employment agreement between the Employee and the Company. No other
agreements, representations or understandings (whether oral or written and
whether express or implied)
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which are not expressly set forth in this Agreement have been made or entered
into by either party with respect to the subject matter hereof. This Agreement
and the Proprietary Information and Inventions Agreement between the Employee
and the Company contain the entire understanding of the parties with respect to
the subject matter hereof.
(d) WITHHOLDING TAXES. All payments made under this
Agreement shall be subject to reduction to reflect taxes or other charges
required to be withheld by law.
(e) CHOICE OF LAW. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of California (except their provisions governing the choice of law).
(f) SEVERABILITY. The invalidity or unenforceability
of any provision or provisions of this Agreement shall not affect the validity
or enforceability of any other provision hereof, which shall remain in full
force and effect. If any provision hereof is unenforceable in any jurisdiction,
it shall be adjusted rather than voided so that it may be enforced to the
maximum extent possible.
(g) ARBITRATION. Subject to Section 7(e), any
controversy or claim arising out of or relating to this Agreement or the breach
thereof, or the Employee's Employment or the termination thereof, shall be
settled in Santa Xxxxx County, California, by arbitration in accordance with the
National Rules for the Resolution of Employment Disputes of the American
Arbitration Association. The decision of the arbitrator shall be final and
binding on the parties, and judgment on the award rendered by the arbitrator may
be entered in any court having jurisdiction thereof. The parties hereby agree
that the arbitrator shall be empowered to enter an equitable decree mandating
specific enforcement of the terms of this Agreement. The Company and the
Employee shall share equally all fees and expenses of the arbitrator; provided,
however, that the Company or the Employee, as the case may be, shall bear all
fees and expenses of the arbitrator and all of the legal fees and out-of-pocket
expenses of the other party if the arbitrator determines that the claim or
position of the Company or the Employee, as the case may be, was without
reasonable foundation. The Employee hereby consents to personal jurisdiction of
the state and federal courts located in the State of California for any action
or proceeding arising from or relating to this Agreement or relating to any
arbitration in which the parties are participants.
(h) NO ASSIGNMENT. This Agreement and all rights and
obligations of the Employee hereunder are personal to the Employee and may not
be transferred or assigned by the Employee at any time. The Company may assign
its rights under this Agreement to any entity that assumes the Company's
obligations hereunder in connection with any sale or transfer of all or a
substantial portion of the Company's assets to such entity.
(i) COUNTERPARTS. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed this
Agreement, in the
12
13
case of the Company by its duly authorized officer, as of the day and year first
above written.
HYPERION SOLUTIONS CORPORATION
By: /s/ Xxxxxxx Xxxxxx
---------------------------------
Title:
------------------------------
/s/ Xxxxxxx X. Xxxxx
------------------------------------
Xxxxxxx X. Xxxxx
00
00
EXHIBIT A TO OCTOBER 11, 1999 EMPLOYMENT AGREEMENT WITH XXXXXXX X. XXXXX
OPTION AGREEMENT WITH XXXXXXX X. XXXXX
00
00
HYPERION SOLUTIONS CORPORATION
STOCK OPTION AGREEMENT
- RELATING TO AN OPTION GRANT OF 500,000 SHARES
PURSUANT TO THE HYPERION SOLUTIONS CORPORATION 1995 STOCK OPTION/STOCK
ISSUANCE PLAN AS AMENDED AND RESTATED AS OF AUGUST 21, 1998. -
EFFECTIVE AS OF OCTOBER 11, 1999
RECITALS
A. The Board has adopted the Plan for the purpose of retaining the
services of selected Employees, non-employee members of the Board or the board
of directors of any Parent or Subsidiary and consultants and other independent
advisors who provide services to the Corporation (or any Parent or Subsidiary).
B. Optionee is to render valuable services to the Corporation (or a Parent
or Subsidiary), and this Agreement is executed pursuant to, and is intended to
carry out the purposes of, the Plan in connection with the Corporation's grant
of an option to Optionee.
C. All capitalized terms in this Agreement shall have the meaning assigned
to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Corporation hereby grants to Optionee,
as of the Grant Date, an option to purchase up to the number of Option Shares
specified in the Grant Notice. The Option Shares shall be purchasable from time
to time during the option term specified in Paragraph 2 at the Exercise Price.
2. OPTION TERM. This option shall have a term of ten (10)
years measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.
3. LIMITED TRANSFERABILITY. This option shall be neither
transferable nor assignable by Optionee other than by will or by the laws of
descent and distribution following Optionee's death and may be exercised, during
Optionee's lifetime, only by Optionee.
4. DATES OF EXERCISE.
i) This option shall become exercisable for the
Option Shares in one or more installments as specified in the
Grant Notice. As the option becomes exercisable for such
installments, those installments shall accumulate and the
option shall remain exercisable for the accumulated
installments until the Expiration Date or sooner termination
of the option term under Paragraph 5 or 6.
PAGE 1
16
ii) In each fiscal year of the Company that the
Optionee chooses to exercise such options, he shall exercise
those options that are exercisable in the following order:
(A) First, the Optionee shall exercise
exercisable Non-Plan Options until the aggregate
spread between the exercise price and the fair market
value of option shares on the date of exercise is
equal to any excess of One Million Dollars
($1,000,000.00) over the amount of compensation other
than from exercise of Plan Options that the Optionee
reasonably expects to receive in such fiscal year.
(B) Second, the Optionee shall exercise
exercisable Plan Options.
(C) The Optionee shall not exercise
additional Non-Plan Options in such fiscal year until
he has exercised all of his then exercisable Plan
Options.
5. CESSATION OF SERVICE. The option term specified in
Paragraph 2 shall terminate (and this option shall cease to be outstanding)
prior to the Expiration Date should any of the following provisions become
applicable:
(i) Should Optionee cease to remain in Service for any reason
(other than death, Permanent Disability or Cause) while this option is
outstanding, then Optionee shall have a period of three (3) months
(commencing with the date of such cessation of Service) ), or such
period of time greater than three (3) months as may be determined by
the Board to be in the best interests of the Corporation, during which
to exercise this option, but in no event shall this option be
exercisable at any time after the Expiration Date.
(ii) Should Optionee die while this option is outstanding,
then the personal representative of Optionee's estate or the person or
persons to whom the option is transferred pursuant to Optionee's will
or in accordance with the laws of descent and distribution shall have
the right to exercise this option. Such right shall lapse and this
option shall cease to be outstanding upon the earlier of (A) the
expiration of the twelve (12)- month period measured from the date of
Optionee's death or (B) the Expiration Date.
(iii) Should Optionee cease Service by reason of Permanent
Disability while this option is outstanding, then Optionee shall have a
period of twelve (12) months (commencing with the date of such
cessation of Service) during which to exercise this option. In no event
shall this option be exercisable at any time after the Expiration Date.
PAGE 2
17
(iv) Should Optionee's Service be terminated for Cause, then
this option shall terminate immediately and cease to remain
outstanding.
(v) During the limited period of post-Service exercisability,
this option may not be exercised in the aggregate for more than the
number of vested Option Shares for which the option is exercisable at
the time of Optionee's cessation of Service. Upon the expiration of
such limited exercise period or (if earlier) upon the Expiration Date,
this option shall terminate and cease to be outstanding for any vested
Option Shares for which the option has not been exercised. To the
extent Optionee is not vested in the Option Shares at the time of
Optionee's cessation of Service, this option shall immediately
terminate and cease to be outstanding with respect to those shares.
(vi) In the event of a Corporate Transaction, the provisions
of Paragraph 6 shall govern the period for which this option is to
remain exercisable following Optionee's cessation of Service and shall
supersede any provisions to the contrary in this paragraph.
6. SPECIAL ACCELERATION OF OPTION.
a. In the event of a Corporate Transaction, the
exercisability of this option, to the extent outstanding at
such time but not otherwise fully exercisable, shall
automatically accelerate so that this option shall,
immediately prior to the effective date of the Corporate
Transaction, become exercisable for any or all of the Option
Shares at the time subject to this option as fully-vested
shares of Common Stock. No such acceleration of this option,
however, shall occur if and to the extent: (i) this option is,
in connection with the Corporate Transaction, either to be
assumed by the successor corporation (or parent thereof) or to
be replaced with a comparable option to purchase shares of the
capital stock of the successor corporation (or parent thereof)
or (ii) this option is to be replaced with a cash incentive
program of the successor corporation which preserves the
spread existing on the Option Shares for which this option is
not exercisable at the time of the Corporate Transaction (the
excess of the Fair Market Value of such Option Shares over the
aggregate Exercise Price payable for such shares) and provides
for subsequent pay-out in accordance with the same exercise
schedule in effect for the option pursuant to the option
exercise schedule set forth in the Grant Notice. The
determination of option comparability under clause (i) shall
be made by the Plan Administrator, and such determination
shall be final, binding and conclusive.
b. Immediately following the Corporate Transaction,
this option, to the extent not previously exercised, shall
terminate and cease to be outstanding, except to the extent
assumed by the successor corporation (or parent thereof) in
connection with the Corporate Transaction.
PAGE 3
18
c. If this option is assumed in connection with a
Corporate Transaction, then this option shall be appropriately
adjusted, immediately after such Corporate Transaction, to
apply to the number and class of securities which would have
been issuable to Optionee in consummation of such Corporate
Transaction had the option been exercised immediately prior to
such Corporate Transaction, and appropriate adjustments shall
also be made to the Exercise Price, provided the aggregate
Exercise Price shall remain the same.
d. Upon an Involuntary Termination of Optionee's
Service within eighteen (18) months following a Corporate
Transaction in which this option is assumed or replaced, the
exercisability of this option, to the extent outstanding at
such time but not otherwise fully exercisable, shall
automatically accelerate so that this option shall immediately
become fully exercisable for all the Option Shares at the time
subject to this option as fully-vested shares of Common Stock
and may be exercised for any or all of those shares at any
time prior to the earlier of (i) the Expiration Date or (ii)
the expiration of the one (1)-year period measured from the
effective date of the Involuntary Termination.
e. This Agreement shall not in any way affect the
right of the Corporation to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to
merge, consolidate, dissolve, liquidate or sell or transfer
all or any part of its business or assets.
7. ADJUSTMENT IN OPTION SHARES. Should any change be made to
the Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.
8. STOCKHOLDER RIGHTS. The holder of this option shall not
have any stockholder rights with respect to the Option Shares until such person
shall have exercised the option, paid the Exercise Price and become a holder of
record of the purchased shares.
9. MANNER OF EXERCISING OPTION.
a. In order to exercise this option with respect to all or any
part of the Option Shares for which this option is at the time
exercisable, Optionee (or any other person or persons exercising the
option) must take the following actions:
(i) Execute and deliver to the Corporation a Notice
of Exercise for the Option Shares for which the option is
exercised.
PAGE 4
19
(ii) Pay the aggregate Exercise Price for the
purchased shares in one or more of the following forms:
(A) cash or check made payable to the
Corporation;
(B) a promissory note payable to the
Corporation, but only to the extent authorized by the
Plan Administrator in accordance with Paragraph 13;
(C) shares of Common Stock held by Optionee
(or any other person or persons exercising the
option) for the requisite period necessary to avoid a
charge to the Corporation's earnings for financial
reporting purposes and valued at Fair Market Value on
the Exercise Date; or
(D) through a special sale and remittance
procedure pursuant to which Optionee (or any other
person or persons exercising the option) shall
concurrently provide irrevocable written instructions
(I) to a Corporation-designated brokerage firm to
effect the immediate sale of the purchased shares and
remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to
cover the aggregate Exercise Price payable for the
purchased shares plus all applicable Federal, state
and local income and employment taxes required to be
withheld by the Corporation by reason of such
exercise and (II) to the Corporation to deliver the
certificates for the purchased shares directly to
such brokerage firm in order to complete the sale
transaction.
Except to the extent the sale and remittance
procedure is utilized in connection with the option exercise, payment
of the Exercise Price must accompany the Notice of Exercise delivered
to the Corporation in connection with the option exercise.
(iii) Furnish to the Corporation appropriate
documentation that the person or persons exercising
the option (if other than Optionee) have the right to
exercise this option.
(iv) Make appropriate arrangements with the
Corporation (or Parent or Subsidiary employing or
retaining Optionee) for the satisfaction of all
Federal, state and local income and employment tax
withholding requirements applicable to the option
exercise.
b. As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other
person or persons
PAGE 5
20
exercising this option) a certificate for the purchased Option Shares,
with the appropriate legends affixed thereto.
c. In no event may this option be exercised for any fractional
shares.
10. COMPLIANCE WITH LAWS AND REGULATIONS.
a. The exercise of this option and the issuance of the Option
Shares upon such exercise shall be subject to compliance by the
Corporation and Optionee with all applicable requirements of law
relating thereto and with all applicable regulations of any stock
exchange (or the Nasdaq National Market, if applicable) on which the
Common Stock may be listed for trading at the time of such exercise and
issuance.
b. The inability of the Corporation to obtain approval from
any regulatory body having authority deemed by the Corporation to be
necessary to the lawful issuance and sale of any Common Stock pursuant
to this option shall relieve the Corporation of any liability with
respect to the non-issuance or sale of the Common Stock as to which
such approval shall not have been obtained. The Corporation, however,
shall use its best efforts to obtain all such approvals.
11. SUCCESSORS AND ASSIGNS. Except to the extent otherwise
provided in Paragraphs 3 and 6, the provisions of this Agreement shall inure to
the benefit of, and be binding upon, the Corporation and its successors and
assigns and Optionee, Optionee's assigns and the legal representatives, heirs
and legatees of Optionee's estate.
12. NOTICES. Any notice required to be given or delivered to
the Corporation under the terms of this Agreement shall be in writing and
addressed to the Corporation at its principal corporate offices. Any notice
required to be given or delivered to Optionee shall be in writing and addressed
to Optionee at the address indicated below Optionee's signature line on the
Grant Notice. All notices shall be deemed effective upon personal delivery or
upon deposit in the U.S. mail, postage prepaid and properly addressed to the
party to be notified.
13. FINANCING. The Plan Administrator may, in its absolute
discretion and without any obligation to do so, permit Optionee to pay the
Exercise Price for the purchased Option Shares by delivering a promissory note.
The terms of any such promissory note (including the interest rate, the
requirements for collateral and the terms of repayment) shall be established by
the Plan Administrator in its sole discretion.(1)
(1) Authorization of payment of the Exercise Price by a promissory note may,
under currently proposed Treasury Regulations, result in the loss of
incentive stock option treatment under the Federal tax laws.
PAGE 6
21
14. CONSTRUCTION. This Agreement and the option evidenced
hereby are made and granted pursuant to the Plan and are in all respects limited
by and subject to the terms of the Plan. All decisions of the Plan Administrator
with respect to any question or issue arising under the Plan or this Agreement
shall be conclusive and binding on all persons having an interest in this
option.
15. GOVERNING LAW. The interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of
California without resort to that State's conflict-of-laws rules.
16. EXCESS SHARES. If the Option Shares covered by this
Agreement exceed, as of the Grant Date, the number of shares of Common Stock
which may without stockholder approval be issued under the Plan, then this
option shall be void with respect to such excess shares, unless stockholder
approval of an amendment sufficiently increasing the number of shares of Common
Stock issuable under the Plan is obtained in accordance with the provisions of
the Plan.
17. ADDITIONAL TERMS APPLICABLE TO AN INCENTIVE OPTION. In the
event this option is designated an Incentive Option in the Grant Notice, the
following terms and conditions shall also apply to the grant:
(i) This option shall cease to qualify for favorable
tax treatment as an Incentive Option if (and to the extent)
this option is exercised for one or more Option Shares: (A)
more than three (3) months after the date Optionee ceases to
be an Employee for any reason other than death or Permanent
Disability or (B) more than twelve (12) months after the date
Optionee ceases to be an Employee by reason of Permanent
Disability.
(ii) No installment under this option shall qualify
for favorable tax treatment as an Incentive Option if (and to
the extent) the aggregate Fair Market Value (determined at the
Grant Date) of the Common Stock for which such installment
first becomes exercisable hereunder would, when added to the
aggregate value (determined as of the respective date or dates
of grant) of any earlier installments of the Common Stock and
any other securities for which this option or any other
Incentive Options granted to Optionee prior to the Grant Date
(whether under the Plan or any other option plan of the
Corporation or any Parent or Subsidiary) first become
exercisable during the same calendar year, exceed One Hundred
Thousand Dollars ($100,000) in the aggregate. Should such One
Hundred Thousand Dollar ($100,000) limitation be exceeded in
any calendar year, this option shall nevertheless become
exercisable for the excess shares in such calendar year as a
Non-Statutory Option.
(iii) Should the exercisability of this option be
accelerated upon a Corporate Transaction, then this option
shall qualify for favorable tax treatment as an Incentive
Option only to the extent the aggregate Fair Market Value
(determined at the Grant Date) of the Common Stock for
PAGE 7
22
which this option first becomes exercisable in the calendar
year in which the Corporate Transaction occurs does not, when
added to the aggregate value (determined as of the respective
date or dates of grant) of the Common Stock or other
securities for which this option or one or more other
Incentive Options granted to Optionee prior to the Grant Date
(whether under the Plan or any other option plan of the
Corporation or any Parent or Subsidiary) first become
exercisable during the same calendar year, exceed One Hundred
Thousand Dollars ($100,000) in the aggregate. Should the
applicable One Hundred Thousand Dollar ($100,000) limitation
be exceeded in the calendar year of such Corporate
Transaction, the option may nevertheless be exercised for the
excess shares in such calendar year as a Non-Statutory Option.
(iv) Should Optionee hold, in addition to this
option, one or more other options to purchase Common Stock
which become exercisable for the first time in the same
calendar year as this option, then the foregoing limitations
on the exercisability of such options as Incentive Options
shall be applied on the basis of the order in which such
options are granted.
18. COUNTERPARTS. This Agreement may be executed in two counterparts,
each of which shall be deemed an original, and all of which together shall
constitute one and the same instrument.
PAGE 8
23
IN WITNESS WHEREOF the parties have executed this Agreement as
of the date first above written.
HYPERION SOLUTIONS CORPORATION
/s/ Xxxxxxx Xxxxxx
By:________________________
Xxxxxxx Xxxxxx
Name:______________________
Title:_____________________
/s/ Xxxxxxx X. Xxxxx
___________________________
Xxxxxxx X. Xxxxx
Address:___________________
___________________
___________________
PAGE 9
24
EXHIBIT I
NOTICE OF EXERCISE
- RELATING TO AN OPTION GRANT OF 500,000 SHARES
PURSUANT TO THE HYPERION SOLUTIONS CORPORATION 1995 STOCK OPTION/STOCK
ISSUANCE PLAN AS AMENDED AND RESTATED AS OF AUGUST 21, 1998. -
I hereby notify Hyperion Solutions Corporation (the
"Corporation") that I elect to purchase shares of the Corporation's Common
Stock (the "Purchased Shares") at the option exercise price of $ per share
(the "Exercise Price") pursuant to that certain option (the "Option") granted to
me under the Corporation's 1995 Stock Option /Stock Issuance Plan on ,
199 .
Concurrently with the delivery of this Exercise Notice to the
Corporation, I shall hereby pay to the Corporation the Exercise Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect payment of the Exercise
Price.
I hereby certify that this Exercise Notice is being executed
in accordance with the order of exercise specified in Section 2(e)(v) of the
Employment Agreement Between the Corporation and the Optionee dated as of
October 11, 1999.
_______________________, 199__
Date
______________________
Optionee
Address:______________
______________________
Print name in exact manner
it is to appear on the
stock certificate: _______________________
Address to which certificate
is to be sent, if different
from address above: _______________________
_______________________
_______________________
Social Security Number: _______________________
PAGE 10
25
Optionee Number: _______________________
APPENDIX
The following definitions shall be in effect under the
Agreement:
A. AGREEMENT shall mean this Stock Option Agreement.
B. BOARD shall mean the Corporation's Board of Directors.
C. CAUSE shall mean: (i) The Optionee's failure to perform in a
satisfactory fashion one or more reasonable and lawful duties assigned to the
Optionee by the Corporation under this Agreement, if such failure continues for
15 days or more after the Corporation has given the Optionee written notice
describing such failure and advising him of the consequences of such failure
under this Agreement; provided that such notice shall be required only with
respect to the first failure;
(ii) The Optionee's conviction of, or a plea of
"guilty" or "no contest" to, a felony under the laws of the
United States or any state thereof;
(iii) The Optionee's failure or refusal to carry out
the reasonable directives of the Corporation, if such failure
continues for three days or more after the Corporation has
given the Optionee written notice describing such failure and
advising him of the consequences of such failure under this
Agreement; provided that such notice shall be required only
with respect to the first failure;
(iv) Any breach of this Agreement, the Proprietary
Information and Inventions Agreement between the Optionee and
the Corporation, or any other agreement between the Optionee
and the Corporation;
(v) Threats or acts of violence directed at any
present, former or prospective employee, independent
contractor, vendor, customer or business partner of the
Corporation (or any of the Corporation's affiliates); or
(vi) The commission of any act of fraud, embezzlement
or dishonesty by Optionee, any unauthorized use or disclosure
by Optionee of confidential information or trade secrets of
the Corporation (or any of the Corporation's affiliates), or
any other intentional misconduct by Optionee affecting the
business or affairs of the Corporation (or any of the
Corporation's affiliates) in a material manner.
PAGE 11
26
D. CODE shall mean the Internal Revenue Code of 1986, as amended.
E. COMMON STOCK shall mean the Corporation's common stock.
F. CORPORATE TRANSACTION shall mean either of the following
stockholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities
possessing more than fifty percent (50%) of the total combined
voting power of the Corporation's outstanding securities are
transferred to a person or persons different from the persons
holding those securities immediately prior to such
transaction, or
(ii) the sale, transfer or other disposition of all
or substantially all of the Corporation's assets in complete
liquidation or dissolution of the Corporation.
G. CORPORATION shall mean Hyperion Solutions Corporation, a Delaware
corporation.
H. EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
I. EXERCISE DATE shall mean the date on which the option shall have been
exercised in accordance with Paragraph 9 of the Agreement.
J. EXERCISE PRICE shall mean the exercise price per share as specified in
the Grant Notice.
K. EXPIRATION DATE shall mean the date on which the option expires as
specified in the Grant Notice.
L. FAIR MARKET VALUE per share of Common Stock on any relevant date shall
be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the
Nasdaq National Market, then the Fair Market Value shall be
the closing selling price per share of Common Stock on the
date in question, as the price is reported by the National
Association of Securities Dealers on the Nasdaq National
Market or any successor system. If there is no closing selling
price for the Common Stock on the date in question, then the
Fair Market Value shall be the closing selling price on the
last preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any
Stock Exchange, then the Fair Market Value shall be the
closing selling price per share of Common Stock on the date in
question on the Stock Exchange
PAGE 12
27
determined by the Plan Administrator to be the primary market
for the Common Stock, as such price is officially quoted in
the composite tape of transactions on such exchange. If there
is no closing selling price for the Common Stock on the date
in question, then the Fair Market Value shall be the closing
selling price on the last preceding date for which such
quotation exists.
X. XXXXX DATE shall mean the date of grant of the option as specified in
the Grant Notice.
X. XXXXX NOTICE shall mean the Notice of Grant of Stock Option
accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.
O. INCENTIVE OPTION shall mean an option which satisfies the requirements
of Code Section 422.
P. INVOLUNTARY TERMINATION shall mean the termination of Optionee's
Service which occurs by reason of:
(i) Optionee's involuntary dismissal or discharge by
the Corporation for reasons other than for Cause, or
(ii) Optionee's voluntary resignation following (A) A
significant diminution in the nature or scope of the
Optionee's authority, duties or responsibilities in effect
immediately prior to the Change in Control; (B) Any reduction
in the rate of the Optionee's Base Compensation in effect
immediately prior to the Change in Control or a reduction of
25% or more in the value of the Optionee's aggregate
compensation and benefits in effect immediately prior to the
Change in Control; (C) The relocation of the Optionee's
principal place of employment to a site more than 25 miles
removed from his principal place of employment immediately
prior to the Change in Control; or (D) An increase of 25% or
more in the average amount of time per month that the Optionee
is required to be away from his principal place of employment,
relative to the average amount of time per month that the
Optionee was required to be away from his principal place of
employment immediately prior to the Change in Control.
Q. NON-PLAN OPTIONS shall mean the Option Shares granted to the Optionee
pursuant to the Option Agreement Between the Corporation and the Optionee
Relating to an Option Grant of 600,000 Shares, dated as of October 11, 1999; and
any other Option Shares granted to the Optionee that were not granted pursuant
to the Plan or any other such plan adopted by the Corporation.
R. NON-STATUTORY OPTION shall mean an option not intended to satisfy the
requirements of Code Section 422.
PAGE 13
28
S. NOTICE OF EXERCISE shall mean the notice of exercise in the form
attached hereto as Exhibit I.
T. OPTION SHARES shall mean the number of shares of Common Stock subject
to stock options granted to the Optionee by the Corporation.
U. OPTIONEE shall mean the person to whom the option is granted as
specified in the Grant Notice.
V. PARENT shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
W. PERMANENT DISABILITY shall mean the inability of Optionee to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment which is expected to result in death or has lasted
or can be expected to last for a continuous period of twelve (12) months or
more.
X. PLAN shall mean the Corporation's 1995 Stock Option/Stock Issuance
Plan.
Y. PLAN ADMINISTRATOR shall mean either the Board or a committee of Board
members, to the extent the committee is at the time responsible for the
administration of the Plan.
Z. PLAN OPTIONS shall mean the Option Shares granted pursuant to this
Agreement and any other Option Shares granted to the Optionee under the Plan or
any other such plan adopted by the Corporation.
AA. SERVICE shall mean the Optionee's performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a
non-employee member of the board of directors or a consultant or independent
advisor.
BB. STOCK EXCHANGE shall mean the American Stock Exchange or the New York
Stock Exchange.
CC. SUBSIDIARY shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations beginning with the Corporation, provided each
corporation (other than the last corporation) in the unbroken chain owns, at the
time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
PAGE 14
29
Hyperion Solutions Corporation
HYPERION SOLUTIONS CORPORATION ID: 77-027777
NOTICE OF GRANT OF STOCK OPTIONS 0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
OPTION NUMBER: ___________
PLAN: 1995 STOCK OPTION/STOCK
ISSUANCE PLAN
ID: ____________
Notice is hereby given of the following option grant (the "Option") to purchase
shares of the Common Stock of Hyperion Solutions Corporation (the
"Corporation").
Optionee: Xxxxxxx X. Xxxxx
Grant Date: October 11, 1999
Vesting Commencement Date: October 11, 1999
Exercise Price: $19.063 per share
Expiration Date: October 11, 2009
Number of Option Shares: 500,000 Total Option Shares
Exercise Schedule: The Option shall become exercisable with
respect to (i) twenty-five percent (25%) of the Total Option
Shares upon Optionee's completion of one (1) year of Service
measured from the Vesting Commencement Date and (ii) the
balance of the Option Shares in successive equal monthly
installments upon Optionee's completion of each of the next
thirty-six (36) months of Service measured from and after the
first anniversary of the Vesting Commencement Date. In no
event shall the Option become exercisable for any additional
Option Shares after Optionee's cessation of Service.
Exercise Order: In each fiscal year of the Corporation that
the Optionee chooses to exercise this option, he shall
exercise this option for those Option Shares that are then
exercisable in conjunction with the Non-Plan Option(s) in the
order of exercise specified in Section 4(ii) of the Stock
Option Agreement between the Corporation and the Optionee
relating to a grant of 500,000 shares (the "Agreement") dated
as of October 11, 1999.
Optionee understands and agrees that the Option is granted
subject to and in accordance with the terms of the Hyperion Solutions
Corporation 1995 Stock Option/Stock Issuance Plan (the "Plan"). Optionee further
agrees to be bound by the terms of the Plan and the terms of the Option as set
forth in the Agreement.
Optionee hereby acknowledges access to and receipt of the
official prospectus for the Plan via GlobalSource (the Corporation's intranet at
xxxx://xxxxxxxxxxxx). A copy of the Plan is available upon request made to the
Corporate Secretary at the Corporation's principal offices.
The Option shall be considered an Incentive Stock Option to
the maximum extent permitted in each calendar year under Section 422(d) of the
Internal Revenue Code of 1986, as amended.
No Employment or Service Contract. Nothing in this Notice or
in the attached Stock Option Agreement or Plan shall confer upon Optionee any
right to continue in Service for any period of specific duration or interfere
with or otherwise restrict in any way the rights of the Corporation (or any
Parent or Subsidiary employing or retaining Optionee) or of Optionee, which
rights are hereby expressly reserved by each, to terminate Optionee's Service at
any time for any reason, with or without cause.
Definitions. All capitalized terms in this Notice shall have
the meaning assigned to them in this Notice or in the attached Stock Option
Agreement.
HYPERION SOLUTIONS CORPORATION
OPTIONEE
/s/ Xxxxxxx X. Xxxxx /s/ Xxxxxxx X. Xxxxxx
------------------------------ -----------------------------
Xxxxxxx X. Xxxxxx
Interim President and CEO
30
HYPERION SOLUTIONS CORPORATION
STOCK OPTION AGREEMENT
- RELATING TO AN OPTION GRANT OF 600,000 SHARES -
EFFECTIVE AS OF OCTOBER 11, 1999
RECITALS
A. The Compensation Committee has approved this Stock Option Agreement
for the purpose of retaining the services of XXXXXXX X. XXXXX (the "Optionee").
B. Optionee is to render valuable services to the Corporation (or a
Parent or Subsidiary), and this Agreement is intended to promote the interests
of the Corporation by providing Optionee with the opportunity to acquire a
proprietary interest, or otherwise increase his proprietary interest, in the
Corporation as an incentive for him to remain in the service of the Corporation.
C. All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Corporation hereby grants to Optionee,
as of the Grant Date, an option to purchase up to the number of Option Shares
specified in the Grant Notice. The option granted herein shall be a
Non-Statutory Option. The Option Shares shall be purchasable from time to time
during the option term specified in Paragraph 2 at the Exercise Price.
2. OPTION TERM. This option shall have a term of ten (10)
years measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.
3. LIMITED TRANSFERABILITY. This option shall be neither
transferable nor assignable by Optionee other than by will or by the laws of
descent and distribution following Optionee's death and may be exercised, during
Optionee's lifetime, only by Optionee. However, this option may be assigned in
whole or in part during the Optionee's lifetime in accordance with the terms of
a Qualified Domestic Relations Order. The assigned portion may only be exercised
by the person or persons who acquire a proprietary interest in the option
pursuant to such Qualified Domestic Relations Order. The terms applicable to the
assigned portion shall be the same as those in effect for the option immediately
prior to such assignment and shall be set forth in such documents issued to the
assignee as the Compensation Committee may deem appropriate.
4. DATES OF EXERCISE.
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i) This option shall become exercisable for the Option Shares
in one or more installments as specified in the Grant Notice. As the
option becomes exercisable for such installments, those installments
shall accumulate and the option shall remain exercisable for the
accumulated installments until the Expiration Date or sooner
termination of the option term under Paragraph 5 or 6.
(ii) In each fiscal year of the Company that the Optionee
chooses to exercise this option, he shall exercise those Option Shares
that are exercisable in the following order:
(A) First, the Optionee shall exercise exercisable
Non-Plan Options until the aggregate spread between the
exercise price and the fair market value of option shares on
the date of exercise is equal to any excess of One Million
Dollars ($1,000,000.00) over the amount of compensation other
than from exercise of Plan Options that the Optionee
reasonably expects to receive in such fiscal year.
(B) Second, the Optionee shall exercise exercisable
Plan Options.
(C) The Optionee shall not exercise additional
Non-Plan Options in such fiscal year until he has exercised
all of his then exercisable Plan Options.
5. CESSATION OF SERVICE. The option term specified in
Paragraph 2 shall terminate (and this option shall cease to be outstanding)
prior to the Expiration Date should any of the following provisions become
applicable:
(i) Should Optionee cease to remain in Service for
any reason (other than death or for Cause) while this option
is outstanding, then Optionee shall have a period of three (3)
months (commencing with the date of such cessation of
Service), or such period of time greater than three (3) months
as may be determined by the Board to be in the best interests
of the Corporation, during which to exercise this option, but
in no event shall this option be exercisable at any time after
the Expiration Date.
(ii) Should Optionee die while this option is
outstanding, then the personal representative of Optionee's
estate or the person or persons to whom the option is
transferred pursuant to Optionee's will or in accordance with
the laws of descent and distribution shall have the right to
exercise this option. Such right shall lapse and this option
shall cease to be outstanding upon the earlier of (A) the
expiration of the twelve (12)- month period measured from the
date of Optionee's death or (B) the Expiration Date.
(iii) Should Optionee cease Service by reason of
Permanent Disability while this option is outstanding, then
Optionee shall have a period of twelve (12) months (commencing
with the date of such cessation of Service) during which to
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exercise this option. In no event shall this option be
exercisable at any time after the Expiration Date.
(iv) Should Optionee's Service be terminated for
Cause, then this option shall terminate immediately and cease
to remain outstanding.
(v) During the limited period of post-Service
exercisability, this option may not be exercised in the
aggregate for more than the number of vested Option Shares for
which the option is exercisable at the time of Optionee's
cessation of Service. Upon the expiration of such limited
exercise period or (if earlier) upon the Expiration Date, this
option shall terminate and cease to be outstanding for any
vested Option Shares for which the option has not been
exercised. To the extent Optionee is not vested in the Option
Shares at the time of Optionee's cessation of Service, this
option shall immediately terminate and cease to be outstanding
with respect to those shares.
(vi) In the event of a Corporate Transaction, the
provisions of Paragraph 6 shall govern the period for which
this option is to remain exercisable following Optionee's
cessation of Service and shall supersede any provisions to the
contrary in this paragraph.
6. SPECIAL ACCELERATION OF OPTION.
(i) In the event of a Corporate Transaction, the
exercisability of this option, to the extent outstanding at
such time but not otherwise fully exercisable, shall
automatically accelerate so that this option shall,
immediately prior to the effective date of the Corporate
Transaction, become exercisable for any or all of the Option
Shares at the time subject to this option as fully-vested
shares of Common Stock. No such acceleration of this option,
however, shall occur if and to the extent: (x) this option is,
in connection with the Corporate Transaction, either to be
assumed by the successor corporation (or parent thereof) or to
be replaced with a comparable option to purchase shares of the
capital stock of the successor corporation (or parent thereof)
or (y) this option is to be replaced with a cash incentive
program of the successor corporation which preserves the
spread existing on the Option Shares for which this option is
not exercisable at the time of the Corporate Transaction (the
excess of the Fair Market Value of such Option Shares over the
aggregate Exercise Price payable for such shares) and provides
for subsequent pay-out in accordance with the same exercise
schedule in effect for the option pursuant to the option
exercise schedule set forth in the Grant Notice. The
determination of option comparability under clause (x) shall
be made by the Compensation Committee, and such determination
shall be final, binding and conclusive.
(ii) Immediately following the Corporate Transaction,
this option, to the extent not previously exercised, shall
terminate and cease to be outstanding, except to the extent
assumed by the successor corporation (or parent thereof) in
connection with the Corporate Transaction.
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(iii) If this option is assumed in connection with a
Corporate Transaction, then this option shall be appropriately
adjusted, immediately after such Corporate Transaction, to
apply to the number and class of securities which would have
been issuable to Optionee in consummation of such Corporate
Transaction had the option been exercised immediately prior to
such Corporate Transaction, and appropriate adjustments shall
also be made to the Exercise Price, provided the aggregate
Exercise Price shall remain the same.
(iv) Upon an Involuntary Termination of Optionee's
Service within eighteen (18) months following a Corporate
Transaction in which this option is assumed or replaced, the
exercisability of this option, to the extent outstanding at
such time but not otherwise fully exercisable, shall
automatically accelerate so that this option shall immediately
become fully exercisable for all the Option Shares at the time
subject to this option as fully-vested shares of Common Stock
and may be exercised for any or all of those shares at any
time prior to the earlier of (x) the Expiration Date or (y)
the expiration of the one (1)-year period measured from the
effective date of the Involuntary Termination.
(v) The Compensation Committee shall have the
discretion, exercisable either at the time the option is
granted or at any time while the option remains outstanding,
to (x) provide for the automatic acceleration of vesting in
this option upon the occurrence of a Change in Control or (y)
condition any such option acceleration (and the termination of
any outstanding repurchase rights) upon the subsequent
Involuntary Termination within a specified period following
the effective date of such Change in Control. Any Option
Shares accelerated in connection with a Change in Control
shall remain fully exercisable until the expiration or sooner
termination of the option term.
(vi) This Agreement shall not in any way affect the
right of the Corporation to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to
merge, consolidate, dissolve, liquidate or sell or transfer
all or any part of its business or assets.
7. ADJUSTMENT IN OPTION SHARES. Should any change be
made to the Common Stock by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Corporation's
receipt of consideration, appropriate adjustments shall be made to (i) the total
number and/or class of securities subject to this option and (ii) the Exercise
Price in order to reflect such change and thereby preclude a dilution or
enlargement of benefits hereunder.
8. STOCKHOLDER RIGHTS. The holder of this option shall
not have any stockholder rights with respect to the Option Shares until such
person shall have exercised the option, paid the Exercise Price and become a
holder of record of the purchased shares.
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9. MANNER OF EXERCISING OPTION.
(i) In order to exercise this option with respect to
all or any part of the Option Shares for which this option is
at the time exercisable, Optionee (or any other person or
persons exercising the option) must take the following
actions:
A. Execute and deliver to the Corporation a
Notice of Exercise for the Option Shares for which
the option is exercised.
B. Pay the aggregate Exercise Price for the
purchased shares in one or more of the following
forms:
a. cash or check made payable to
the Corporation;
b. a promissory note payable to the
Corporation, but only to the extent
authorized by the Compensation Committee in
accordance with Paragraph 13;
c. shares of Common Stock held by
Optionee (or any other person or persons
exercising the option) for the requisite
period necessary to avoid a charge to the
Corporation's earnings for financial
reporting purposes and valued at Fair Market
Value on the Exercise Date; or
d. through a special sale and
remittance procedure pursuant to which
Optionee (or any other person or persons
exercising the option) shall concurrently
provide irrevocable written instructions (x)
to a Corporation-designated brokerage firm
to effect the immediate sale of the
purchased shares and remit to the
Corporation, out of the sale proceeds
available on the settlement date, sufficient
funds to cover the aggregate Exercise Price
payable for the purchased shares plus all
applicable Federal, state and local income
and employment taxes required to be withheld
by the Corporation by reason of such
exercise and (y) to the Corporation to
deliver the certificates for the purchased
shares directly to such brokerage firm in
order to complete the sale transaction.
Except to the extent the sale and remittance procedure is
utilized in connection with the option exercise, payment of the Exercise Price
must accompany the Notice of Exercise delivered to the Corporation in connection
with the option exercise.
C. Furnish to the Corporation appropriate
documentation that the person or persons exercising the option
(if other than Optionee) have the right to exercise this
option.
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D. Make appropriate arrangements with the Corporation
(or Parent or Subsidiary employing or retaining Optionee) for
the satisfaction of all Federal, state and local income and
employment tax withholding requirements applicable to the
option exercise. Such arrangements may include, but are not
limited to, the following:
a. Stock Withholding: The election to have
the Corporation withhold, from the shares of Common
Stock otherwise issuable upon the exercise of this
option, a portion of those shares with an aggregate
Fair Market Value equal to the percentage of the
Taxes (not to exceed one hundred percent (100%))
designated by the holder.
b. Stock Delivery: The election to deliver
to the Corporation, at the time this option is
exercised or the shares vest, one or more shares of
Common Stock previously acquired by Optionee (other
than in connection with the option exercise
triggering the Taxes) with an aggregate Fair Market
Value equal to the percentage of the Taxes (not to
exceed one hundred percent (100%)) designated by the
Optionee.
(ii) As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other
person or persons exercising this option) a certificate for the
purchased Option Shares, with the appropriate legends affixed thereto.
(iii) In no event may this option be exercised for any
fractional shares.
10. COMPLIANCE WITH LAWS AND REGULATIONS.
(i) The exercise of this option and the issuance of the Option
Shares upon such exercise shall be subject to compliance by the
Corporation and Optionee with all applicable requirements of law
relating thereto and with all applicable regulations of any stock
exchange (or the Nasdaq National Market, if applicable) on which the
Common Stock may be listed for trading at the time of such exercise and
issuance.
(ii) The inability of the Corporation to obtain approval from
any regulatory body having authority deemed by the Corporation to be
necessary to the lawful issuance and sale of any Common Stock pursuant
to this option shall relieve the Corporation of any liability with
respect to the non-issuance or sale of the Common Stock as to which
such approval shall not have been obtained. The Corporation, however,
shall use its best efforts to obtain all such approvals.
11. REGISTRATION. The Company agrees to take all actions necessary
to file with the U.S. Securities and Exchange Commission, within sixty (60) days
from the date of this Agreement, a Registration Statement on Form S-8 with
respect to the shares of the
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Company's common stock issuable upon exercise of the options pursuant to this
Agreement and to use commercially reasonable efforts to maintain the
effectiveness of such registration statement.
12. SUCCESSORS AND ASSIGNS. Except to the extent otherwise
provided in Paragraphs 3 and 6, the provisions of this Agreement shall inure to
the benefit of, and be binding upon, the Corporation and its successors and
assigns and Optionee, Optionee's assigns and the legal representatives, heirs
and legatees of Optionee's estate.
13. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices. Any notice required to be
given or delivered to Optionee shall be in writing and addressed to Optionee at
the address indicated below Optionee's signature line on the Grant Notice. All
notices shall be deemed effective upon personal delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.
14. FINANCING. The Compensation Committee may, in its absolute
discretion and without any obligation to do so, permit Optionee to pay the
Exercise Price for the purchased Option Shares by delivering a promissory note.
The terms of any such promissory note (including the interest rate, the
requirements for collateral and the terms of repayment) shall be established by
the Compensation Committee in its sole discretion. Promissory notes may be
authorized with or without security or collateral. In all events, the maximum
credit available to the Optionee may not exceed the sum of (i) the aggregate
option exercise price or purchase price payable for the purchased shares plus
(ii) any Federal, state and local income and employment tax liability incurred
by the Optionee in connection with the option exercise. The Compensation
Committee may, in its discretion, determine that one or more such promissory
notes shall be subject to forgiveness by the Corporation in whole or in part
upon such terms as the Compensation Committee may deem appropriate.
15. CANCELLATION AND REGRANT OF THIS OPTION. The Compensation
Committee shall have the authority to effect, at any time and from time to time,
with the consent of the Optionee, the cancellation of any or all outstanding
Option Shares under this Agreement and to grant in substitution new options
covering the same or different number of shares of Common Stock but with an
exercise price per share based on the Fair Market Value per share of Common
Stock on the new option grant date.
16. CONSTRUCTION. This Agreement and the option evidenced hereby
are made and granted pursuant to resolutions approved by the Compensation
Committee and are in all respects limited by and subject to the terms of such
resolutions.
17. GOVERNING LAW. The interpretation, performance and enforcement
of this Agreement shall be governed by the laws of the State of California
without resort to that State's conflict-of-laws rules.
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18. COUNTERPARTS. This Agreement may be executed in two
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF the parties have executed this Agreement as
of the date first above written.
HYPERION SOLUTIONS CORPORATION
By: /s/ Xxxxxxx Xxxxxx
--------------------------------------
Name: Xxxxxxx Xxxxxx
------------------------------------
Title:
------------------------------------
/s/ Xxxxxxx X. Xxxxx
------------------------------------
Xxxxxxx X. Xxxxx
Address:
------------------------------------
------------------------------------
------------------------------------
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EXHIBIT A
NOTICE OF EXERCISE
- RELATING TO AN OPTION GRANT OF 600,000 SHARES -
I hereby notify Hyperion Solutions Corporation (the
"Corporation") that I elect to purchase shares of the Corporation's
Common Stock (the "Purchased Shares") at the option exercise price of $ per
share (the "Exercise Price") pursuant to that certain option (the "Option")
granted to me under the Stock Option Agreement between the Corporation and me
dated October __, 1999.
Concurrently with the delivery of this Exercise Notice to the
Corporation, I shall hereby pay to the Corporation the Exercise Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect payment of the Exercise
Price.
I hereby certify that this Exercise Notice is being executed
in accordance with the order of exercise specified in Section 2(e)(v) of the
Employment Agreement Between the Corporation and the Optionee dated as of
October 11, 1999.
, 200__
------------------------
Date
----------------------
Optionee
Address:
--------------
----------------------
Print name in exact manner
it is to appear on the
stock certificate: ----------------------
Address to which certificate
is to be sent, if different
from address above: ----------------------
Social Security Number: ----------------------
Employee Number: ----------------------
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APPENDIX
The following definitions shall be in effect under the
Agreement:
A. AGREEMENT shall mean this Stock Option Agreement.
B. BOARD shall mean the Corporation's Board of Directors.
C. CAUSE shall mean: (i) The Optionee's failure to perform in a
satisfactory fashion one or more reasonable and lawful duties assigned to the
Optionee by the Corporation under this Agreement, if such failure continues for
15 days or more after the Corporation has given the Optionee written notice
describing such failure and advising him of the consequences of such failure
under this Agreement; provided that such notice shall be required only with
respect to the first failure;
(ii) The Optionee's conviction of, or a plea of
"guilty" or "no contest" to, a felony under the laws of the
United States or any state thereof;
(iii) The Optionee's failure or refusal to carry out
the reasonable directives of the Corporation, if such failure
continues for three days or more after the Corporation has
given the Optionee written notice describing such failure and
advising him of the consequences of such failure under this
Agreement; provided that such notice shall be required only
with respect to the first failure;
(iv) Any breach of this Agreement, the Proprietary
Information and Inventions Agreement between the Optionee and
the Corporation, or any other agreement between the Optionee
and the Corporation;
(v) Threats or acts of violence directed at any
present, former or prospective employee, independent
contractor, vendor, customer or business partner of the
Corporation (or any of the Corporation's affiliates); or
(vi) The commission of any act of fraud, embezzlement
or dishonesty by Optionee, any unauthorized use or disclosure
by Optionee of confidential information or trade secrets of
the Corporation (or any of the Corporation's affiliates), or
any other intentional misconduct by Optionee affecting the
business or affairs of the Corporation (or any of the
Corporation's affiliates) in a material manner.
D. CHANGE IN CONTROL shall mean a change in ownership or control of the
Corporation effected through either of the following transactions:
(i) the acquisition, directly or indirectly, by any
person or related group of persons (other than the Corporation
or a person that directly or indirectly
A-1
41
controls, is controlled by, or is under common control with,
the Corporation), of beneficial ownership (within the meaning
of Rule 13d-3 of the 0000 Xxx) of securities possessing more
than fifty percent (50%) of the total combined voting power of
the Corporation's outstanding securities pursuant to a tender
or exchange offer made directly to the Corporation's
stockholders which the Board does not recommend such
stockholders to accept, or
(ii) a change in the composition of the Board over a
period of thirty-six (36) consecutive months or less such that
a majority of the Board members ceases, by reason of one or
more contested elections for Board membership, to be comprised
of individuals who either (A) have been Board members
continuously since the beginning of such period or (B) have
been elected or nominated for election as Board members during
such period by at least a majority of the Board members
described in clause (A) who were still in office at the time
the Board approved such election or nomination.
E. CODE shall mean the Internal Revenue Code of 1986, as amended.
F. COMMON STOCK shall mean the Corporation's common stock.
G. COMPENSATION COMMITTEE shall mean a subcommittee of the Board composed
of outside members of the Board which makes policy determinations regarding
executive compensation.
H. CORPORATE TRANSACTION shall mean either of the following
stockholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities
possessing more than fifty percent (50%) of the total combined
voting power of the Corporation's outstanding securities are
transferred to a person or persons different from the persons
holding those securities immediately prior to such
transaction, or
(ii) the sale, transfer or other disposition of all
or substantially all of the Corporation's assets in complete
liquidation or dissolution of the Corporation.
I. CORPORATION shall mean Hyperion Solutions Corporation, a Delaware
corporation.
J. DOMESTIC RELATIONS ORDER shall mean any judgment, decree or order
(including approval of a property settlement agreement) which provides or
otherwise conveys, pursuant to applicable State domestic relations laws
(including community property laws), marital property rights to any spouse or
former spouse of the Optionee.
K. EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
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L. EXERCISE DATE shall mean the date on which the option shall have been
exercised in accordance with Paragraph 9 of the Agreement.
M. EXERCISE PRICE shall mean the exercise price per share as specified in
the Grant Notice.
N. EXPIRATION DATE shall mean the date on which the option expires as
specified in the Grant Notice.
O. FAIR MARKET VALUE per share of Common Stock on any relevant date shall
be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the
Nasdaq National Market, then the Fair Market Value shall be
the closing selling price per share of Common Stock on the
date in question, as the price is reported by the National
Association of Securities Dealers on the Nasdaq National
Market or any successor system. If there is no closing selling
price for the Common Stock on the date in question, then the
Fair Market Value shall be the closing selling price on the
last preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any
Stock Exchange, then the Fair Market Value shall be the
closing selling price per share of Common Stock on the date in
question on the Stock Exchange determined by the Plan
Administrator to be the primary market for the Common Stock,
as such price is officially quoted in the composite tape of
transactions on such exchange. If there is no closing selling
price for the Common Stock on the date in question, then the
Fair Market Value shall be the closing selling price on the
last preceding date for which such quotation exists.
X. XXXXX DATE shall mean the date of grant of the option as specified in
the Grant Notice.
X. XXXXX NOTICE shall mean the Notice of Grant of Stock Option
accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.
R. INVOLUNTARY TERMINATION shall mean the termination of Optionee's
Service which occurs by reason of:
(i) Optionee's involuntary dismissal or discharge by
the Corporation for reasons other than for Cause, or
(ii) Optionee's voluntary resignation following (A) A
significant diminution in the nature or scope of the
Optionee's authority, duties or responsibilities in effect
immediately prior to the Change in Control; (B) Any reduction
in the rate of the Optionee's Base Compensation in effect
immediately prior to the Change in Control or a reduction of
25% or more in the value of the Optionee's aggregate
compensation and benefits in effect immediately prior to the
Change in Control; (C) The
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relocation of the Optionee's principal place of employment to
a site more than 25 miles removed from his principal place of
employment immediately prior to the Change in Control; or (D)
An increase of 25% or more in the average amount of time per
month that the Optionee is required to be away from his
principal place of employment, relative to the average amount
of time per month that the Optionee was required to be away
from his principal place of employment immediately prior to
the Change in Control.
S. NON-PLAN OPTIONS shall mean the Option Shares granted pursuant to this
Agreement and any other Option Shares which the Optionee may seek to exercise
that were not granted under the Option/Issuance Plan or any other such plan as
may be adopted by the Corporation.
T. NON-STATUTORY OPTIONS shall mean Option Shares not intended to satisfy
the requirements of Code Section 422.
U. NOTICE OF EXERCISE shall mean the notice of exercise in the form
attached hereto as Exhibit I.
V. OPTION/ISSUANCE PLAN shall mean the Corporation's 1995 Stock
Option/Stock Issuance Plan as amended and restated as of August 21, 1998.
W. OPTION SHARES shall mean the number of shares of Common Stock subject
to the stock options granted by the Corporation to the Optionee.
X. OPTIONEE shall refer to Xx. Xxxxxxx X. Xxxxx.
Y. PARENT shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
Z. PERMANENT DISABILITY shall mean the inability of Optionee to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment which is expected to result in death or has lasted
or can be expected to last for a continuous period of twelve (12) months or
more.
AA. PLAN OPTIONS shall mean Option Shares issued under the Option/Issuance
Plan or under any other such plan as may be adopted by the Corporation.
BB. QUALIFIED DOMESTIC RELATIONS ORDER shall mean a Domestic Relations
Order that would substantially comply with the requirements of Code Section
414(p) if the Plan were subject to such section. The Compensation Committee
shall have the sole discretion to determine whether a Domestic Relations Order
is a Qualified Domestic Relations Order.
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XX. SERVICE shall mean the Optionee's performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a
non-employee member of the board of directors or a consultant or independent
advisor.
DD. STOCK EXCHANGE shall mean the American Stock Exchange or the New York
Stock Exchange.
EE. SUBSIDIARY shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations beginning with the Corporation, provided each
corporation (other than the last corporation) in the unbroken chain owns, at the
time of the determination, stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
FF. TAXES shall mean the Federal, state and local income and employment tax
liabilities incurred by the Optionee.
A-5
45
Hyperion Solutions Corporation
ID: 77-027777
HYPERION SOLUTIONS CORPORATION 0000 Xxxxxxxx Xxxxxx
NOTICE OF GRANT OF STOCK OPTIONS Xxxxxxxxx, XX 00000
OPTION NUMBER: ____________
PLAN: Not Applicable
ID: ____________
Notice is hereby given of the following option grant (the "Option") to purchase
shares of the Common Stock of Hyperion Solutions Corporation (the
"Corporation").
Optionee: Xxxxxxx X. Xxxxx
Grant Date: October 11, 1999
Vesting Commencement Date: October 11, 1999
Exercise Price: $19.063 per share
Expiration Date: October 11, 2009
Number of Option Shares: 600,000 Total Option Shares
Exercise Schedule: The Option shall become exercisable with
respect to (i) twenty-five percent (25%) of the Total Option
Shares upon Optionee's completion of one (1) year of Service
measured from the Vesting Commencement Date and (ii) the
balance of the Option Shares in successive equal monthly
installments upon Optionee's completion of each of the next
thirty-six (36) months of Service measured from and after the
first anniversary of the Vesting Commencement Date. In no
event shall the Option become exercisable for any additional
Option Shares after Optionee's cessation of Service.
Exercise Order: In each fiscal year of the Corporation that
the Optionee chooses to exercise this option, he shall
exercise this option for those Option Shares that are then
exercisable in conjunction with the option(s) granted to him
under the Option/Issuance Plan in the order of exercise
specified in Section 4(ii) of the Stock Option Agreement
between Hyperion Solutions Corporation and the Optionee dated
as of October 11, 1999 relating to the issuance of 600,000
shares (the "Agreement").
Optionee understands and agrees that the Option is granted
subject to and in accordance with the terms of the Agreement. Optionee further
agrees to be bound by the terms of the Agreement attached hereto as Exhibit A.
The Option shall be considered a Non-Statutory Stock Option
that is not intended to satisfy the provisions of Section 422(d) of the Internal
Revenue Code of 1986, as amended.
No Employment or Service Contract. Nothing in this Notice or
in the attached Agreement shall confer upon Optionee any right to continue in
Service for any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Corporation (or any Parent or Subsidiary
employing or retaining Optionee) or of Optionee, which rights are hereby
expressly reserved by each, to terminate Optionee's Service at any time for any
reason, with or without cause.
Definitions. All capitalized terms in this Notice shall have
the meaning assigned to them in this Notice or in the attached Stock Option
Agreement.
HYPERION SOLUTIONS CORPORATION
OPTIONEE
/s/ Xxxxxxx X. Xxxxx /s/ Xxxxxxx X. Xxxxxx
------------------------------ -------------------------
Xxxxxxx X. Xxxxxx
Interim President and CEO
46
SCHEDULE A
Alabama New York
Alaska North Carolina
Arizona North Dakota
Arkansas Ohio
California Oklahoma
Colorado Oregon
Connecticut Pennsylvania
Delaware Rhode Island
Florida South Carolina
Georgia South Dakota
Hawaii Tennessee
Idaho Texas
Illinois Utah
Indiana Vermont
Iowa Virginia
Kansas Washington
Kentucky West Virginia
Louisiana Wisconsin
Maine Wyoming
Maryland Australia
Massachusetts Brazil
Michigan Canada
Minnesota England
Mississippi France
Missouri Germany
Montana Hong Kong
Nebraska Israel
Nevada Japan
New Hampshire Mexico
New Jersey Netherlands
New Mexico Singapore
United Kingdom
