<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT /X/ FILED BY A PARTY OTHER THAN THE REGISTRANT / /
--------------------------------------------------------------------------------
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 14a-11(c) or 14a-12
IMRS INC.
(Name of Registrant as Specified In Its Charter)
IMRS INC.
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(3).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act
Rule 0-11:1
4) Proposed maximum aggregate value of transaction:
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
--------------------------------------------------------------------------------
<PAGE> 2
[IMRS LOGO]
-------------------------------------------------------------------------------
777 Long Ridge Road
Stamford, CT 06902
Tel: 203-321-3500
Fax: 203-322-3904
October , 1995
Dear Stockholder:
You are invited to attend the Annual Meeting of Stockholders of IMRS Inc.
to be held at 9:00 A.M., Wednesday, November 15, 1995 at the Stamford Marriott,
2 Stamford Forum, Stamford, Connecticut.
The notice of meeting and proxy statement that follow describe the business
to be conducted at the meeting. Whether or not you plan to attend this meeting
in person, we urge you to sign and return the enclosed proxy so that your shares
will be represented and voted at the meeting. If you so desire, you can withdraw
your proxy and vote in person at the Annual Meeting.
Cordially,
/s/ James A. Perakis
James A. Perakis
President and CEO
<PAGE> 3
IMRS INC.
777 LONG RIDGE ROAD
STAMFORD, CONNECTICUT 06902
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TO THE STOCKHOLDERS OF IMRS Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of IMRS
Inc., a Delaware corporation (the "Company"), will be held on Wednesday,
November 15, 1995 at 9:00 A.M., at the Stamford Marriott, 2 Stamford Forum,
Stamford, Connecticut, for the following purposes:
1. To elect two members to the Board of Directors to serve for a
three-year term as Class III Directors.
2. To approve an amendment to the Company's Amended and Restated
Certificate of Incorporation (the "Certificate of Incorporation") to
change the name of the Company to Hyperion Software Corporation.
3. To approve an amendment to the Company's Certificate of Incorporation
to increase the number of authorized shares of common stock, $.01 par
value per share ("Common Stock"), from 15,000,000 to 50,000,000 shares.
4. To consider and act upon an amendment to the Company's 1991 Stock Plan
to increase the number of shares of Common Stock authorized for
issuance under the plan from 1,200,000 to 2,500,000 shares and to
permit grants thereunder to comply with Section 162(m) of the Internal
Revenue Code.
5. To ratify the selection of the firm of Ernst & Young LLP as independent
auditors for the fiscal year ending June 30, 1996.
6. To transact such other business as may properly come before the meeting
and any adjournments thereof.
Only stockholders of record at the close of business on September 29, 1995,
the record date fixed by the Board of Directors, are entitled to notice of and
to vote at the meeting and any adjournment thereof.
By Order of the Board of Directors,
Craig M. Schiff
Secretary
Stamford, Connecticut
October , 1995
------------------------
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN
THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED STAMPED ENVELOPE BY RETURN
MAIL.
<PAGE> 4
IMRS INC.
777 LONG RIDGE ROAD
STAMFORD, CONNECTICUT 06902
PROXY STATEMENT
OCTOBER , 1995
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of IMRS Inc. (the "Company") for use at the
Annual Meeting of Stockholders of the Company to be held at the Stamford
Marriott, 2 Stamford Forum, Stamford, Connecticut, on November 15, 1995, at 9:00
A.M., and any adjournments thereof (the "Meeting").
Only stockholders of record at the close of business on September 29, 1995
will be entitled to notice of and to vote at the Meeting. As of that date,
shares of Common Stock, par value $.01 per share, of the Company ("Common
Stock") were outstanding and entitled to vote at the Meeting. Stockholders are
entitled to cast one vote for each share held of record at the close of business
on September 29, 1995 on each matter submitted to a vote at the Meeting. Any
stockholder may revoke a proxy at any time prior to its exercise by filing a
later-dated proxy or a written notice of revocation with the Secretary of the
Company, or by voting in person at the Meeting. If a stockholder is not
attending the Meeting, any proxy or notice should be returned in time for
receipt no later than the close of business on the day preceding the Meeting.
At the Meeting, proposals to elect Messrs. Gruner and Thomson as Class III
Directors, to formally change the name of the Company to Hyperion Software
Corporation, to increase the number of authorized shares of Common Stock of the
Company from 15,000,000 to 50,000,000 shares, to amend the Company's 1991 Stock
Plan to increase the number of shares of Common Stock authorized for issuance
under the plan to 2,500,000 shares and to permit grants thereunder to comply
with Section 162(m) of the Internal Revenue Code, and to ratify the selection of
the firm of Ernst & Young LLP as the Company's independent auditors for the
fiscal year ending June 30, 1996 will be subject to a vote of stockholders.
Where a choice has been specified on the proxy with respect to the foregoing
matters, the shares represented by the proxy will be voted in accordance with
the specifications, and will be voted FOR the proposal if no specification is
indicated. The persons named as attorneys in the proxies are directors and/or
officers of the Company.
The Board of Directors of the Company knows of no other matters to be
presented at the Meeting. If any other matter should be presented at the Meeting
upon which a vote properly may be taken, shares represented by all proxies
received by the Board of Directors will be voted with respect thereto in
accordance with the judgment of the persons named in the proxies.
An Annual Report to Stockholders, containing audited financial statements
of the Company for the fiscal year ended June 30, 1995, is being mailed together
with this proxy statement to all stockholders entitled to vote. This proxy
statement and the accompanying notice and form of proxy were first sent or given
to stockholders on or about the date hereof.
<PAGE> 5
PRINCIPAL HOLDERS OF VOTING SECURITIES
--------------------------------------------------------------------------------
The following table sets forth, as of September 12, 1995, certain information
regarding beneficial ownership of the Company's Common Stock (i) by each person
who, to the knowledge of the Company, beneficially owned more than 5% of the
shares of Common Stock of the Company outstanding at such date, (ii) by each
director of the Company, (iii) by each Named Officer of the Company (as defined
below under the caption "COMPENSATION INFORMATION CONCERNING DIRECTORS AND
OFFICERS -- Executive Compensation Summary"), and (iv) by all executive officers
and directors of the Company as a group.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
NAME AND ADDRESS OWNERSHIP(1) OF CLASS
---------------- ------------ --------
<S> <C> <C>
James A. Perakis(2)................................................ 491,666 5.8%
c/o Hyperion Software Corporation
777 Long Ridge Road
Stamford, CT 06902
Marco Arese Lucini(3).............................................. 52,000 *
Gary G. Greenfield(4).............................................. 2,000 *
Harry S. Gruner(5)................................................. 15,666 *
William W. Helman IV(6)............................................ 10,666 *
Aldo Papone(7)..................................................... 7,333 *
Robert W. Thomson(8)............................................... 7,000 *
Gordon O. Rapkin(9)................................................ 47,500 *
Terence W. Rogers(10).............................................. 14,227 *
David M. Sample(11)................................................ 77,000 *
Craig M. Schiff(12)................................................ 103,000 1.3%
All executive officers and directors as a group (14 persons)(13)... 947,471 10.7%
<FN>
---------------
* less than 1%.
(1) The persons and entities named in the table have sole voting and investment power with respect to all
shares shown as beneficially owned by them, except as noted below.
(2) Includes options to purchase 391,666 shares of Common Stock.
(3) Includes options to purchase 2,000 shares of Common Stock.
(4) Consists of options to purchase Common Stock.
(5) Includes options to purchase 6,666 shares of Common Stock.
(6) Includes options to purchase 6,666 shares of Common Stock.
(7) Includes options to purchase 5,333 shares of Common Stock.
(8) Includes options to purchase 5,000 shares of Common Stock.
(9) Consists of options to purchase Common Stock.
(10) Includes options to purchase 13,000 shares of Common Stock.
(11) Includes options to purchase 69,000 shares of Common Stock.
(12) Includes options to purchase 75,000 shares of Common Stock.
(13) Includes options to purchase 731,997 shares of Common Stock.
</TABLE>
2
<PAGE> 6
ELECTION OF DIRECTORS
--------------------------------------------------------------------------------
Pursuant to the Company's Amended and Restated Certificate of Incorporation (the
"Certificate of Incorporation"), the Company's Board of Directors is divided
into three classes -- Class I, II and III Directors. Each director is elected
for a three year term of office, with one class of directors being elected at
each annual meeting of stockholders. Each director holds office until his
successor is elected and qualified or until his earlier death, resignation or
removal.
The nominees for Class III Directors, Messrs. Gruner and Thomson, are
presently serving as directors of the Company. Shares represented by all proxies
received by the Board of Directors and not so marked as to withhold authority to
vote for any individual director (by writing that individual director's name
where indicated on the proxy) or for all directors will be voted (unless one or
both nominees are unable or unwilling to serve) FOR the election of the nominees
for Class III Directors named below. The Board of Directors knows of no reason
why such nominees would be unable or unwilling to serve, but if such should be
the case, proxies may be voted for the election of some other person.
The information below sets forth the current members of the Board of
Directors, including the nominees for Class III Directors:
NOMINEES TO SERVE AS DIRECTORS FOR A TERM EXPIRING AT THE 1998 ANNUAL MEETING OF
STOCKHOLDERS
(CLASS III DIRECTORS):
Harry S. Gruner
Mr. Gruner, age 36, has served as a director of the Company since
October 1989; he is a member of the Compensation and Stock Option
Committees. He has been a general partner of JMI Equity Fund, a private
equity investment partnership, since November 1992. From August 1986 to
October 1992, Mr. Gruner was a Principal of Alex. Brown & Sons
Incorporated, which firm served as the lead manager of the Company's
initial public offering in November 1991. Mr. Gruner is also a director of
Brock Control Systems, Inc., a publicly held company that develops, markets
and supports software systems, and several privately held companies.
Robert W. Thomson
Mr. Thomson, age 45, has served as a director of the Company since
1981. Mr. Thomson was the founder of the Company. He served as its Chief
Executive Officer until September 1985 and as President until December
1987. He has also served as a software consultant for International
Interactive Media, Ltd. ("IIM") since 1987. Mr. Thomson is the sole
stockholder of IIM. Since January 1988, Mr. Thomson has provided consulting
services to the Company pursuant to an agreement between the Company and
IIM.
3
<PAGE> 7
DIRECTORS SERVING FOR A TERM EXPIRING AT THE 1997 ANNUAL MEETING OF STOCKHOLDERS
(CLASS I DIRECTORS):
James A. Perakis
Mr. Perakis, age 51, has served as Chief Executive Officer and as a
director of the Company since September 1985 and as President since
December 1987. Mr. Perakis is also Chairman of the Board of Directors and a
member of the Compensation Committee. From 1983 to September 1985, Mr.
Perakis served as Senior Vice President and General Manager of Chase
Decision Systems, a division of Interactive Data Corporation, a developer
and marketer of mainframe software for planning and financial applications.
From 1979 to 1983, Mr. Perakis was Chief Financial Officer of Interactive
Data Corporation, a supplier of data and software to financial and
corporate markets. Mr. Perakis is also a director of MapInfo Corporation, a
publicly held company which develops, markets and supports desktop mapping
software, mapping application development tools and geographic and
demographic information products.
Gary G. Greenfield
Mr. Greenfield, age 40, was elected to the Board in June 1992; he is a
member of the Audit Committee. He currently serves as Executive Vice
President, Chief Operating Officer and a director of INTERSOLV Inc., a
publicly held company which is a leading provider of software development
solutions for client/server and object-oriented development, software
configuration management and data warehousing. Mr. Greenfield joined Sage
Software (which merged with INDEX Technology in 1991 to form INTERSOLV
Inc.) in 1987 as Vice President of Marketing. Prior to that he served as
President of Frey Associates Inc., a provider of artificial intelligence
software and services.
DIRECTORS SERVING FOR A TERM EXPIRING AT THE 1996 ANNUAL MEETING OF STOCKHOLDERS
(CLASS II DIRECTORS):
Marco Arese Lucini
Mr. Arese Lucini, age 45, served as Vice President -- International
from June 1988 to December 1992 and has served as a director of the Company
since August 1985; he is a member of the Audit Committee. From 1979 to June
1988, Mr. Arese Lucini served as Managing Director of Fienco S.p.A., a
software company based in Milan, Italy.
William W. Helman IV
Mr. Helman, age 37, has served as a director of the Company since
August 1991; he is a member of the Compensation and Stock Option
Committees. Mr. Helman has been a general partner of Greylock Investments
Limited Partnership, Greylock Equity Limited Partnership, Greylock Limited
Partnership and Greylock Capital Limited Partnership since 1988 and has
been associated with Greylock since 1984. Mr. Helman serves as a director
of Filene's Basement Corporation, Vertex Pharmaceuticals Incorporated and
several privately held companies.
Aldo Papone
Mr. Papone, age 63, has served as a director of the Company since
April 1994; he has been a Senior Advisor to the American Express Company
since 1991. During 1989 and 1990, he was Chairman and Chief Executive
Officer of the American Express Travel Related Services Company. Mr. Papone
is currently a director of the American Express Company, Springs
Industries, Inc. and The Body Shop International plc.
4
<PAGE> 8
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors of the Company met five times during the fiscal year
ended June 30, 1995. The Board of Directors has a standing Audit Committee, a
standing Compensation Committee and a standing Stock Option Committee, the
memberships of which were most recently fixed by the Board of Directors on June
30, 1994. The Audit Committee, which oversees the accounting and financial
functions of the Company, including matters relating to the appointment and
activities of the Company's independent auditors, met two times during fiscal
1995. Messrs. Arese Lucini and Greenfield are the members of the Audit
Committee. The Compensation Committee of the Company, which establishes and
administers the Company's executive compensation programs, met three times
during fiscal 1995. Messrs. Perakis, Gruner and Helman are the members of the
Compensation Committee. The Stock Option Committee, which administers the
Company's 1991 Stock Plan and 1991 Employee Stock Purchase Plan, met two times
during fiscal 1995. Messrs. Gruner and Helman are the members of the Stock
Option Committee. The Company does not have a standing Nominating Committee.
Each of the directors attended at least 75% of the aggregate of all meetings of
the Board of Directors and of all committees on which he serves.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Perakis, a member of the Compensation Committee, is also the President and
Chief Executive Officer of the Company.
DIRECTOR COMPENSATION
Each non-employee director (which excludes any director who personally receives
more than $100,000 annually, or who controls any entity which receives more than
$100,000 annually, for providing goods or services to the Company under a
separate agreement or retainer) is paid $10,000 per year and is also being paid
$1,250 for each meeting of the Board of Directors attended. In addition, each
member of the Board of Directors is reimbursed for expenses incurred in
connection with each Board or Committee meeting attended. Non-employee Directors
also receive stock options under the Company's 1991 Non-Employee Director Stock
Plan (the "Director Plan"). See "COMPENSATION INFORMATION CONCERNING DIRECTORS
AND OFFICERS -- Non-Employee Director Stock Options" for a discussion of the
Director Plan. In addition, the Company paid consulting fees of approximately
$132,000 in fiscal 1995 to IIM, in exchange for the consulting services of Mr.
Thomson.
5
<PAGE> 9
REPORT ON EXECUTIVE COMPENSATION BY THE COMPENSATION
AND STOCK OPTION COMMITTEES OF THE BOARD OF DIRECTORS
--------------------------------------------------------------------------------
To Our Stockholders:
The Compensation and Stock Option Committees of the Board of Directors
(together, the "Committee") with the exception of Mr. Perakis, who is a member
of the Compensation Committee, are comprised of Directors who are not employees
of the Company. The Committee is responsible for establishing and administering
the Company's executive compensation programs. The Committee, excluding Mr.
Perakis, develops annual and long-term objectives for Mr. Perakis and
establishes his compensation.
The philosophy underlying the development and administration of the
Company's executive compensation policies is the alignment of the interests of
executive management with those of the stockholders. Key elements of this
philosophy are:
- Providing the executive with a base salary that is competitive with
executive base salaries for comparable companies in its industry and
geographical area. This enables the Company to attract and retain highly
qualified executive officers.
- Establishing a discretionary incentive compensation program that
delivers bonus pay commensurate with (i) the Company's performance, as
measured by operating, financial and strategic objectives and (ii) the
executive's performance, as measured against organizational and
management objectives and the degree to which teamwork and Company
values are fostered.
- Providing significant equity-based incentives for executives, in the
form of stock options, to ensure that they are motivated over the long
term to respond to the Company's business challenges and opportunities
from an ownership standpoint.
Base salaries of the five highest paid executives are listed on the
Executive Compensation Summary table found on page 8. Executive base salaries
were established in employment agreements between the Company and the executive
officer. On an annual basis, the Committee reviews these salaries and, while it
is not required to, it may in its discretion increase the base salaries.
Increases typically have been based on merit, and have also been made when
necessary so that base salaries remain competitive when compared to other
software companies of comparable size and relative geographical location. (In
the performance graph that follows this report, the Company's performance is
compared to that of companies classified under SIC Code 7372 -- prepackaged
software companies.) The amount of increases in base salaries also depends upon
the Committee's subjective judgment as to the executive's contribution to
Company performance, both in terms of performance against goals and changes in
job content and responsibilities. The Committee has required a third-party
report regarding any increases for the fiscal year ending June 30, 1996.
The incentive compensation program is a vehicle by which executives can
earn additional compensation, depending upon Company and individual performance
relative to specified annual objectives. Each year the President establishes,
with the approval of the Committee, a list of objectives for each department and
for the Company as a whole. The departmental objectives generally represent
specific tasks and qualitative objectives, such as the implementation of
specified programs, the timing and caliber of deliverables, or the strengthening
of specified aspects of department performance, rather than quantitative
targets. At the end of the year, a bonus may be paid to each executive officer
depending upon the relative success of their department in achieving its goals
for that year, and, more importantly, on Company-wide growth in revenues and net
income. The Board of Directors believes such growth is critical to the Company's
fundamental goal of building stockholder value. The amount of the bonus is not
determined pursuant to any formula, but rather is established subjectively by
the Committee in its discretion.
6
<PAGE> 10
The purpose of stock option grants is to align executives' interests with
stockholder goals -- to provide additional incentives to executive officers and
other key employees to work, not just for the near term but as well for the long
term, to maximize stockholder value. Accordingly, executives are considered
every two years for stock option grants, and it is the Company's policy to
weight total compensation heavily toward equity compensation through stock
options. Options are generally granted at fair market value and, with respect to
options granted since the Company's initial public offering, become exercisable
ratably over 3 to 4 year periods. The actual number of stock options granted to
executives is not determined pursuant to any formula, but rather they are
awarded subjectively by the Committee in its discretion.
COMPANY PERFORMANCE AND CEO COMPENSATION
Mr. Perakis' base compensation was established pursuant to the terms of a
three-year employment agreement dated August 1, 1993, which provides for annual
increases in base salary, at the discretion of the Committee, not to exceed 10
percent in any year. In 1994, the Committee (without the participation of Mr.
Perakis) increased Mr. Perakis' base salary by approximately 7 percent, and in
1995 increased it by an additional 10 percent, pursuant to his current
employment agreement. Mr. Perakis' employment agreement also provides for the
payment of an annual performance bonus, and stipulates that, prior to September
30 of each year, Mr. Perakis must submit to the independent members of the
Committee for their approval a formula on which Mr. Perakis' bonus, if any, for
such fiscal year will be based. In approving any formula, the Committee (without
the participation of Mr. Perakis) must take into account the Company's progress
in meeting its business plan, including profitability and revenue growth
projections as well as the compensation packages of chief executive officers of
comparable companies of similar size in the software industry. Mr. Perakis was
awarded a bonus of 40 percent for fiscal 1995, because the Committee concluded
that the Company achieved, and in many cases exceeded, goals relating to the
Company's business plan for 1995, including operating, financial and strategic
objectives.
Over the past five years the Company has realized significant year-to-year
growth in revenues and earnings. As a result of the Company's performance and
his individual contribution, Mr. Perakis was granted, at fair market value, the
stock options reflected in the Executive Compensation Summary table on page 8.
This grant of options was not subject to a discrete weighting of specific
criteria.
It is the intention of the Committee that, so long as it is consistent with
the Committee's overall compensation objectives, substantially all executive
compensation should be deductible for federal income tax purposes. If the
proposed amendments to the 1991 Stock Plan are approved by the stockholders of
the Company at the Annual Meeting of Stockholders, the Committee believes that,
under current federal income tax law, it will have achieved this objective.
MEMBERS OF THE COMMITTEE:
HARRY S. GRUNER (Compensation and Stock Option Committees)
WILLIAM W. HELMAN IV (Compensation and Stock Option Committees)
JAMES A. PERAKIS (Compensation Committee Only)
7
<PAGE> 11
COMPENSATION INFORMATION CONCERNING DIRECTORS AND OFFICERS
--------------------------------------------------------------------------------
<TABLE>
EXECUTIVE COMPENSATION SUMMARY
The following table sets forth information concerning the compensation for
services in all capacities to the Company, for the fiscal years ended June 30,
1995, 1994 and 1993, of those persons who were at June 30, 1995 (i) the Chief
Executive Officer and (ii) each of the four most highly compensated executive
officers of the Company who earned more than $100,000 in salary and bonus in
fiscal year 1995 (with the Chief Executive Officer, collectively, the "Named
Officers"):
<CAPTION>
LONG TERM
COMPENSATION(2)
ANNUAL COMPENSATION(1) ---------------
-------------------------- OPTIONS/
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(3) AWARDS(#)
--------------------------- ---- --------- ----------- ---------
<S> <C> <C> <C> <C>
James A. Perakis 1995 $257,000 $ 103,000 --
President and CEO 1994 234,000 95,000 100,000
1993 219,000 75,000 --
Terence W. Rogers 1995 $226,000 $ 86,000 --
Executive Vice President 1994 188,000 71,000 --
1993 -- -- 50,000
David M. Sample 1995 $175,000 $ 166,000 10,000
Senior Vice President 1994 160,000 240,000 20,000
1993 137,000 125,000 5,000
Gordon O. Rapkin 1995 $162,000 $ 46,000 --
Vice President- 1994 150,000 41,000 15,000
Hyperion Enterprise 1993 137,000 36,000 --
Business Group
Craig M. Schiff 1995 $144,000 $ 48,000 --
Vice President- 1994 136,000 40,000 15,000
Products and Services 1993 123,000 32,000 --
<FN>
---------------
(1) Excludes perquisites and other personal benefits, the aggregate annual
amount of which for each officer was less than the lesser of $50,000 or 10%
of the total of annual salary and bonus reported.
(2) The Company did not grant any restricted stock awards or stock appreciation
rights or make any long term incentive plan payouts during fiscal 1995.
(3) Bonuses are reported in the year earned, even if actually paid in a
subsequent year.
</TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning options granted during the
fiscal year ended June 30, 1995 to the Named Officers as reflected in the
Executive Compensation Summary table above:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT
---------------------------------------------- ASSUMED ANNUAL RATES
PERCENT OF OF STOCK PRICE
TOTAL OPTIONS/SARS APPRECIATION
GRANTED TO EXERCISE OR FOR OPTION TERM (1)
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION -----------------------
NAME GRANTED (#) FISCAL YEAR ($/SHARE) DATE 5%($) 10%($)
---- ------------ ------------------ ------------ ------------ -------- --------
<S> <C> <C> <C> <C> <C> <C>
David M. Sample(2)..... 10,000 3.5% $22.75 7/15/04 $143,074 $362,576
</TABLE>
8
<PAGE> 12
---------------
(1) Amounts reported in this column represent hypothetical amounts that may be
realized upon exercise of the options immediately prior to the expiration of
their term, assuming the specified compounded rates of appreciation of the
Company's Common Stock over the term of the options. These numbers are
calculated based on rules promulgated by the Securities and Exchange
Commission and do not reflect the Company's estimate of future stock price
growth. Actual gains, if any, on stock option exercises and Common Stock
holdings are dependent on the timing of such exercise and the future
performance of the Company's Common Stock. There can be no assurances that
the rates of appreciation assumed in this table can be achieved or that the
amounts reflected will be received by the individuals.
(2) These options have terms of ten years from the date of grant and become
exercisable as to 25% of the shares covered thereby on each anniversary of
the date of grant until such options are fully exercisable. These options do
not qualify as incentive stock options under Section 422 of the Internal
Revenue Code.
<TABLE>
OPTION EXERCISES AND FISCAL YEAR-END VALUES
Shown below is further information with respect to options to purchase the Company's Common Stock granted to the Named Officers,
including (i) the number of shares of Common Stock purchased upon exercise of options in 1995, (ii) the net value realized
upon such exercise, (iii) the number of unexercised options outstanding at June 30, 1995, and (iv) the value of such unexercised
options at June 30, 1995:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND OPTION VALUES OF UNEXERCISED OPTIONS
<CAPTION>
VALUE OF
UNEXERCISED
NUMBER OF IN-THE-MONEY
UNEXERCISED OPTIONS/SARS
SHARES OPTIONS/SARS AT IN-THE-MONEY OPTIONS
ACQUIRED JUNE 30, 1995(#) AT JUNE 30, 1995($)(2)
ON VALUE -------------------------- -------------------------
NAME EXERCISE(#) REALIZED($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------- ----------- -------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James A. Perakis..... 50,000 $1,288,750 383,333 66,667 $15,566,381 $1,783,342
Terence W. Rogers.... -- $ -- 25,000 25,000 $ 681,250 $ 681,250
David M. Sample...... 38,000 $1,214,375 72,250 31,250 $ 2,608,063 $ 755,313
Gordon O. Rapkin..... 12,250 $ 301,000 61,250 15,000 $ 2,394,688 $ 365,625
Craig M. Schiff...... 45,220 $1,792,965 95,000 15,000 $ 3,550,625 $ 365,625
<FN>
---------------
(1) Amounts disclosed in this column do not reflect amounts actually received by the Named Officers but are calculated based on
the difference between the fair market value of the Company's Common Stock on the date of exercise and the exercise price of
the options. Named Officers will receive cash only if and when they sell the Common Stock issued upon exercise of the options
and the amount of cash received by such individuals is dependent on the price of the Company's Common Stock at the time of such
sale.
(2) Value is based on the difference between the option exercise price and the fair market value at fiscal year-end 1995 ($45.25
per share) multiplied by the number of shares underlying the option.
</TABLE>
NON-EMPLOYEE DIRECTOR STOCK OPTIONS
Each non-employee director of the Company is eligible to participate in the
Company's 1991 Non-Employee Director Stock Option Plan (the "Director Plan").
The Director Plan authorizes the grant of options for a maximum of 100,000
shares of Common Stock. The number of shares of Common Stock issuable under the
Director Plan or subject to outstanding options is subject to adjustment for
changes in the Company's Common Stock. Each non-employee director automatically
receives a fully vested option for 2,000 shares on his or her first anniversary
date as a director of the Company and a fully vested option for 2,000 shares on
each successive anniversary of such date. Additionally, once a non-employee
director has served as a
9
<PAGE> 13
director for a period of two years, he or she shall receive a one-time grant of
options to purchase 5,000 shares of Common Stock, subject to a three-year, pro
rata vesting schedule; provided that this provision shall not apply to directors
who: (a) once served as an officer of the Company, (b) directly or indirectly
beneficially own, or have or share voting or investment power over, greater than
one percent of the outstanding voting stock of the Company, or (c) received,
upon election to the Board of Directors of the Company after November 1, 1991, a
special one-time stock option grant.
The exercise price per share of options granted under the Director Plan is
100% of the fair market value of the Company's Common Stock on the date the
option is granted. Options expire on the tenth anniversary of the date of the
option grant. Options may not be assigned or transferred except by will or by
the laws of descent or distribution and are exercisable only while the optionee
is serving as a director of the Company or within 90 days after the optionee
ceases to serve as a director of the Company (except that if a director dies or
becomes disabled while serving as a director of the Company, the option is
exercisable until the scheduled expiration date of the option).
10
<PAGE> 14
PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the cumulative
total stockholder return on the Company's Common Stock during the period from
the Company's initial public offering on October 25, 1991 through June 30, 1995,
with the cumulative total return on the S&P 500 Index and the Company's Peer
Group. The comparison assumes $100 was invested on October 25, 1991 in the
Company's Common Stock at the $12.50 initial offering price, in the S&P 500
Index and with the Company's Peer Group, and assumes reinvestment of dividends,
if any.
<TABLE>
COMPARISON OF FIVE YEAR*
CUMULATIVE TOTAL RETURN**
AMONG IMRS INC., S&P 500 INDEX AND THE COMPANY'S PEER GROUP***
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) IMRS S&P 500 PEER GROUP
<S> <C> <C> <C>
1991 100.00 100.00 100.00
1992 134.00 108.00 110.00
1993 156.00 123.00 148.00
1994 172.00 125.00 155.00
1995 362.00 157.00 258.00
<FN>
---------------
* Prior to October 25, 1991, the Company's Common Stock was neither
public-traded nor registered under Section 12 of the Securities Exchange Act
of 1934. Comparative data is provided only for the period since that date.
** Cumulative Total Return assumes reinvestment of dividends.
*** Peer Group is based on SIC Code 7372 -- prepackaged software companies.
</TABLE>
The stock price performance shown on the graph above is not necessarily
indicative of future price performance. Information used in the graph was
obtained from Research Data Group, a source believed to be reliable, however,
the Company is not responsible for any errors or omissions in such information.
11
<PAGE> 15
PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION
TO CHANGE THE COMPANY'S NAME
--------------------------------------------------------------------------------
The Board of Directors of the Company proposes and recommends, by resolution
dated September 18, 1995, to the stockholders for their approval an amendment to
the Company's Certificate of Incorporation to change the name of the Company to
Hyperion Software Corporation by amending the text of Article First of the
Certificate of Incorporation of the Company to read in its entirety as follows:
"The name of the Corporation is Hyperion Software Corporation (the
"Corporation")."
IMRS Inc. has been a leader in the development, marketing and support of
corporate financial software applications since its inception fourteen years
ago. The name Hyperion Software Corporation, however, acknowledges the Company's
place as an international provider of a wide variety of corporate financial
software under the Hyperion product name. The product Hyperion Enterprise, for
example, has been licensed to over 1,000 major corporations, most of them within
the last two years, and it has become the primary financial management system
for many of those customers. Financial and information system professionals in
many large, multinational companies now identify products such as Hyperion
Enterprise, Hyperion Financials, Hyperion OnTrack, Hyperion Forms, Micro Control
and Hyperion Pillar as being part of the Hyperion family of software products.
The name Hyperion already enjoys recognition in the marketplace and has
been used in a variety of applications. Since February 1995, the Company has
been doing business under the name Hyperion Software. HYSW has been the
Company's Nasdaq National Market symbol since March 1, 1995. The Company's
reputation, name recognition, and market leadership give the Company a solid
base for building an identity going forward as Hyperion Software Corporation.
The Board of Directors recommends a vote FOR the approval of this Amendment
to the Company's Certificate of Incorporation.
PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION TO INCREASE
THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK
--------------------------------------------------------------------------------
The Board of Directors of the Company proposes and recommends, by resolution
dated September 18, 1995, to the stockholders for their approval an amendment to
the Company's Certificate of Incorporation to increase the authorized number of
shares of Common Stock of the Company from 15,000,000 to 50,000,000 shares by
amending the first sentence of Article Fourth of the Certificate of
Incorporation of the Company to read in its entirety as follows: "The total
number of shares of all classes of capital stock which the Corporation shall
have authority to issue is 51,000,000 shares, consisting of 50,000,000 shares of
Common Stock with a par value of $.01 per share (the "Common Stock") and
1,000,000 shares of Preferred Stock with a par value of $.01 per share (the
"Preferred Stock")."
Shares of the Company's Common Stock, including the additional shares
proposed for authorization, do not have preemptive or similar rights.
As of September 12, 1995, there were approximately 8,148,777 shares issued
and outstanding and approximately 2,429,437 shares reserved for future issuance
pursuant to the Company's stock plans and outstanding warrants. If the amendment
to the Certificate of Incorporation is approved, the Board of Directors will
have the authority to issue 35,000,000 additional shares of Common Stock without
further stockholder approval. The Board of Directors believes that the
authorized number of shares of Common Stock should be increased to provide
sufficient shares for such corporate purposes as may be determined by the Board
of Directors to be necessary or desirable. These purposes may include, without
limitation: acquiring other
12
<PAGE> 16
businesses in exchange for shares of the Company's Common Stock; entering into
collaborative research and development arrangements with other companies in
which Common Stock or the right to acquire Common Stock are part of the
consideration; facilitating broader ownership of the Company's Common Stock by
effecting a stock split or issuing a stock dividend; raising capital through the
sale of Common Stock; and attracting and retaining valuable employees by the
issuance of additional stock options. The Company at present has no commitments,
agreements or undertakings to issue any such additional shares. The Board of
Directors considers the authorization of additional shares of Common Stock
advisable to ensure prompt availability of shares for issuance should the
occasion arise.
The issuance of additional shares of Common Stock could have the effect of
diluting earnings per share and book value per share, which could adversely
affect the Company's existing stockholders. In addition, the Company's
authorized but unissued shares of Common Stock could be used to make a change in
control of the Company more difficult or costly. Issuing additional shares of
Common Stock could have the effect of diluting stock ownership of the persons
seeking to obtain control of the Company. The Company is not aware, however, of
any pending or threatened efforts to obtain control of the Company, and the
Board of Directors has no current intention to use the additional shares of
Common Stock in order to impede a takeover attempt.
Conversely, in line with Company's long-term goal, the issuance of
additional shares of Common Stock could serve as a means to maximize stockholder
value.
The Board of Directors recommends a vote FOR the approval of this Amendment
to the Company's Certificate of Incorporation.
PROPOSAL TO AMEND THE 1991 STOCK PLAN
--------------------------------------------------------------------------------
PROPOSAL TO AMEND PLAN TO INCREASE NUMBER OF SHARES RESERVED UNDER PLAN
The 1991 Stock Plan (the "1991 Plan") was adopted by the Board of Directors of
the Company and approved by the Company's stockholders on September 5, 1991. It
is now proposed to approve an amendment to increase the number of shares of
Common Stock authorized for issuance pursuant to the 1991 Plan from 1,200,000
shares to 2,500,000 shares. Management of the Company believes that this
increase is important to permit the Board of Directors to provide long-term
incentives to present and future key employees.
PROPOSAL TO AMEND PLAN TO COMPLY WITH INTERNAL REVENUE CODE SECTION 162(M)
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code")
precludes a deduction by any publicly-held corporation for compensation in
excess of $1 million that is paid to the chief executive officer of the
corporation ("CEO") or to each of the four highest compensated officers (other
than the CEO) of the Company or its subsidiaries (each a "covered employee").
The determination of whether an individual is a "covered employee" is made as of
the last day of each taxable year pursuant to the executive compensation
disclosure rules under the Securities Exchange Act of 1934. Compensation for
this purpose includes not only cash remuneration, but also compensation
attributable to the exercise of "non-qualified stock options" (as defined
below). There is an exception from the $1 million limitation for
"performance-based compensation" that satisfies certain requirements. The 1991
Plan currently qualifies for a transition rule that exempts it from most of
these performance-based requirements until the earlier of several dates, among
which is the date on which there is a material modification of the 1991 Plan. A
material modification of the 1991 Plan includes the increase of the number of
shares of Common Stock authorized for issuance under the plan.
It is now proposed to approve an amendment to qualify the 1991 Plan for
favorable federal income tax treatment with respect to the $1 million limitation
on the deduction for executive compensation to certain executive officers of the
Company under Section 162(m) of the Code. The amendment provides that the
maximum number of shares for which grants may be made to any employee of the
Company during any fiscal year of the Company shall not exceed 300,000 shares of
Common Stock. The amendment also provides that
13
<PAGE> 17
the 1991 Plan shall, to the extent required by applicable regulations, be
administered by two or more "outside directors" (as defined by applicable
regulations). As a result of the exercise of stock options, it is possible that
some executives may recognize, in a single taxable year, total compensation for
federal income tax purposes in excess of $1 million. Management believes that
this amendment is important to preserve the federal income tax deductibility of
executive compensation in excess of $1 million to the extent that it may be
attributable to the exercise of stock options under the 1991 Plan. If
stockholders do not approve the proposed amendments to the 1991 Plan, the
Company will not grant options under the plan for shares in excess of the
1,200,000 shares of Common Stock currently authorized for issuance under the
1991 Plan.
DESCRIPTION OF THE 1991 PLAN
The purpose of the 1991 Plan is to provide incentives to officers and other
employees of the Company and any present or future subsidiaries (collectively,
"Related Corporations") by providing them with opportunities to purchase stock
of the Company pursuant to options which qualify as incentive stock options
("ISOs") as defined in Section 422(b) of the Code. The 1991 Plan also provides
for the issuance to officers, directors, employees and consultants of the
Company and Related Corporations of options which do not qualify as incentive
stock options ("non-qualified stock options"). Awards of stock and the
opportunity to make direct purchases of stock may be granted to directors,
consultants, employees and officers of the Company under the 1991 Plan. Stock
options, awards and opportunities to purchase stock are referred to collectively
as "Stock Rights." As of September 29, 1995, the closing price of the Company's
stock on The Nasdaq National Market was $ .
Administration. The 1991 Plan is administered by the Stock Option
Committee of the Board of Directors (the "Committee"), which consists of two
directors. Subject to the terms of the 1991 Plan, the Committee has the
authority to determine the persons to whom Stock Rights shall be granted
(subject to certain eligibility requirements for grants of ISOs) and the terms
of the Stock Rights granted, including (a) the number of shares subject to each
grant, (b) when the Stock Right becomes exercisable, (c) the per share exercise
or purchase price, (d) the duration of the Stock Right, (e) the time, manner and
form of payment upon the exercise of a Stock Right and (f) other terms and
provisions governing the Stock Rights.
Eligible Participants. Subject to certain limitations, ISOs under the 1991
Plan may be granted to any employee of the Company other than members of the
Committee. The 1991 Plan provides that each eligible employee may be granted
ISOs only to the extent that, in the aggregate under the 1991 Plan and all ISO
plans of the Company and any Related Corporation, such ISOs do not become
exercisable for the first time by such employee during any calendar year in a
manner which would entitle the employee to purchase more than $100,000 in fair
market value (determined at the time the ISOs were granted) of Common Stock in
that year. Any portion of an ISO grant that exceeds such $100,000 limit will be
treated for federal income tax purposes as a non-qualified stock option.There is
currently no other restriction as to the maximum or minimum number of options an
optionee maybe granted. As of September 29, 1995, there were approximately
officers and employees of Related Corporations that were eligible to participate
in the 1991 Plan.
Granting of Stock Rights, Prices and Duration. Stock Rights may be granted
under the 1991 Plan at any time prior to September 5, 2001. The exercise price
per share of non-qualified stock options granted under the 1991 Plan cannot be
less than the par value of Common Stock ($.01 per share). The exercise price per
share of ISOs cannot be less than the fair market value of the Common Stock on
the date of grant (or, in the case of ISOs granted to employees holding more
than ten percent of the voting stock of the Company, 110% of the fair market
value of the Common Stock on the date of grant). The 1991 Plan provides that
each option shall expire on the date specified by the Committee, but not more
than ten years from its date of grant in the case of ISOs, ten years and one day
in the case of non-qualified stock options, and five years in the case of ISOs
granted to an employee or officer holding more than ten percent of the voting
stock of the Company.
14
<PAGE> 18
Exercise of Options. Each option granted under the 1991 Plan is either
fully exercisable at the time of grant or becomes exercisable in such
installments as the Committee may specify. Each option may be exercised at any
time or from time to time, in whole or in part, for up to the total number of
shares with respect to which it is then exercisable. The Committee has the right
to accelerate the date of exercise of any installment of any option, but the
Committee may not, without the consent of an optionee, accelerate the exercise
date of any ISO if such acceleration would violate the annual $100,000
limitation for ISOs.
Payment for exercise of an option under the 1991 Plan may be made in cash
or by check or, if authorized by the Committee in its discretion (in writing at
the time of grant with respect to ISOs), in full or in part by a personal
recourse, interest bearing note, by tendering shares of Common Stock of the
Company or by an assignment to the Company of the proceeds from the sale of the
Common Stock acquired upon exercise of the option and an authorization to the
broker or selling agent to pay that amount to the Company.
Effect of Termination of Employment, Disability or Death. If an ISO
optionee ceases to be employed by the Company and all Related Corporations other
than by reason of death or disability, no further installments of his or her
ISOs will become exercisable, and the ISOs will terminate after the passage of
90 days from the date of termination of employment (but no later than their
specified expiration dates), except to the extent that such ISOs will have been
converted by the Committee into non-qualified stock options. If an optionee is
disabled or dies, any ISO held by the optionee may be exercised, to the extent
exercisable on the date of disability or death, by the optionee or the
optionee's estate, personal representative or beneficiary, at any time within
180 days from the date of the optionee's disability or death (but not later than
the specified expiration date of the ISO). Non-qualified stock options are
subject to such termination and cancellation provisions as may be determined by
the Committee.
Non-Assignability of Options. Only the optionee may exercise an option; no
assignment or transfers are permitted except by will or by the laws of descent
and distribution.
Miscellaneous. Subject to the discretion of the Committee, option holders
are protected against dilution in the event of a stock dividend,
recapitalization, stock split, merger or similar transaction involving a change
in capital structure. The Board of Directors may terminate or amend the 1991
Plan in any respect at any time, except that, without the approval of the
holders of a majority of the outstanding shares of Common Stock, (a) the total
number of shares that may be issued under the 1991 Plan may not be increased
except as described under "Adjustments" in the 1991 Plan; (b) the provisions
regarding employees eligible for ISOs may not be modified; (c) the provisions
regarding the exercise price at which shares may be offered pursuant to ISOs may
not be modified (except by adjustment referred to above); and (d) the expiration
date of the 1991 Plan may not be extended. No action of the Board of Directors
or stockholders, however, may, without the consent of an optionee, alter or
impair any optionee's rights under any option previously granted to him. Any
shares subject to an option which for any reason expires or terminates
unexercised may again be available for option grants under the 1991 Plan. Unless
terminated sooner, the 1991 Plan will terminate on September 5, 2001.
FEDERAL INCOME TAX CONSEQUENCES
Incentive Stock Options. The following general rules are applicable under
current federal income tax law to ISOs under the 1991 Plan:
1. In general, no taxable income results to the optionee upon the
grant of an ISO or upon the issuance of shares to him or her upon the
exercise of the ISO (but see alternative minimum tax discussion below), and
no tax deduction is allowed to the Company upon either grant or exercise of
an ISO.
15
<PAGE> 19
2. If shares acquired upon exercise of an ISO are not disposed of
within (i) two years following the date the option was granted or (ii) one
year following the date the shares are issued to the optionee pursuant to
the ISO exercise (the "holding periods"), the difference between the amount
realized on any subsequent disposition of the shares and the exercise price
will generally be treated as capital gain or loss to the optionee.
3. If shares acquired upon exercise of an ISO are disposed of before
the expiration of one or both of the requisite holding periods (a
"Disqualifying Disposition"), then in most cases the lesser of (i) any
excess of the fair market value of the shares at the time of exercise of
the ISO over the exercise price or (ii) the actual gain on disposition will
be treated as compensation to the optionee and will be taxed as ordinary
income in the year of such disposition.
4. In any year that an optionee recognizes compensation income on a
Disqualifying Disposition of stock acquired by exercising an ISO, the
Company generally should be entitled to a corresponding deduction for
federal income tax purposes.
5. Any excess of the amount realized by the optionee as the result of
a Disqualifying Disposition over the sum of (i) the exercise price and (ii)
the amount of ordinary income recognized under the above rules generally
will be treated as capital gain.
6. Capital gain or loss recognized on a disposition of shares will be
long-term capital gain or loss if the optionee's holding period for the
shares exceeds one year.
7. An optionee may be entitled to exercise an ISO by delivering shares
of the Company's Common Stock to the Company in payment of the exercise
price, if the optionee's ISO agreement so provides. If an optionee
exercises an ISO in such fashion, special rules will apply.
8. In addition to the ordinary income tax consequences described
above, the exercise of ISOs may result in a further "minimum tax" under the
Code. The Code provides that an "alternative minimum tax" will be applied
against a taxable base which is equal to "alternative minimum taxable
income," reduced by a statutory exemption. In general, the amount by which
the value of the Common Stock received upon exercise of the ISO exceeds the
exercise price is included in the optionee's alternative minimum taxable
income for the year in which the optionee exercises the ISO. A taxpayer is
required to pay the higher of his regular tax liability or the alternative
minimum tax. A taxpayer who pays alternative minimum tax may be entitled to
a tax credit against his or her regular tax liability in later years.
Non-Qualified Stock Options. The following general rules are applicable
under current federal income tax law to non-qualified stock options under the
1991 Plan:
1. The optionee generally does not realize any taxable income upon
the grant of an option, and the Company is not allowed a business expense
deduction by reason of such grant.
2. The optionee generally will recognize ordinary compensation income
at the time of exercise of the option in an amount equal to the excess, if
any, of the fair market value of the shares on the date of exercise over
the exercise price. The Company may be required to withhold income tax on
this amount. The Company generally should be entitled to a tax deduction in
the year in which compensation income is recognized by the optionee.
3. When the optionee sells the shares, he or she generally will
recognize a capital gain or loss in an amount equal to the difference
between the amount realized upon the sale of the shares and his or her
basis in the shares (generally, the exercise price plus the amount taxed to
the optionee as compensation income). If the optionee's holding period for
the shares exceeds one year, such gain or loss will be a long-term capital
gain or loss.
16
<PAGE> 20
4. An optionee may be entitled to exercise a non-qualified stock
option by delivering shares of the Company's Common Stock to the Company in
payment of the exercise price. If an optionee exercises a non-qualified
stock option in such fashion, special rules will apply.
Awards and Purchases. Under current federal income tax law, persons
receiving Common Stock pursuant to an award of stock or a grant of an
opportunity to purchase stock will generally recognize ordinary
compensation income equal to the fair market value of the shares received,
reduced by any purchase price paid. The Company should generally be
entitled to a corresponding tax deduction. When such Common Stock is sold,
the seller generally will recognize capital gain or loss. Special rules
apply if the stock acquired is subject to vesting, or is subject to certain
restrictions on resale under federal securities laws applicable to
directors, officers or 10% stockholders.
STOCK OPTION GRANTS UNDER THE 1991 PLAN TO DATE
Since the inception of the 1991 Plan, the following stock options have been
granted under it to the persons listed below.
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITION NUMBER OF OPTIONS(1)
--------------------------- --------------------
<S> <C>
James A. Perakis..................................................... 160,000(2)
President and Chief Executive Officer
Terence W. Rogers.................................................... 50,000(2)
Executive Vice President
David M. Sample...................................................... 65,000(2)
Senior Vice President
Gordon O. Rapkin..................................................... 45,000
Vice President-Hyperion Enterprise
Craig M. Schiff...................................................... 45,000
Vice President -- Products and Services
All current executive officers as a group (8 persons)................ 489,000
All current directors who are not executive officers as a group (6
persons)........................................................... 55,000
All employees who are not executive officers as a group.............. 455,500
<FN>
---------------
(1) Options include all grants from adoption of the Plan until June 30, 1995. Options
granted pursuant to the Plan vest at varying rates. Options were granted at 100% of
the fair market value of the Common Stock as of the date of grant.
(2) Persons who have received five percent or greater of options granted under the Plan.
</TABLE>
The Board of Directors recommends a vote FOR the approval of these
Amendments to the Company's 1991 Plan.
CERTAIN TRANSACTIONS
--------------------------------------------------------------------------------
The Company paid consulting fees of approximately $132,000 in fiscal 1995 to IIM
pursuant to a consulting agreement that expires on January 31, 1996. Robert W.
Thomson, a director of the Company, is the sole stockholder of IIM. The
consulting agreement provides that Mr. Thomson will carry out IIM's duties under
the agreement. Such duties include advisory functions related to development of
enhancements to existing software products of the Company. Under the agreement,
Mr. Thomson is required to devote up to 35 hours per week for no more than 46
weeks per year to the performance of IIM's duties.
17
<PAGE> 21
The Company has adopted a policy whereby all transactions between the
Company and its principal officers, directors and affiliates must be on terms no
less favorable to the Company than could be obtained from unrelated third
parties and will be approved by a majority of the disinterested members of the
Company's Board of Directors.
REPORTS ABOUT OWNERSHIP OF THE COMPANY'S COMMON STOCK
--------------------------------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10% of a registered class
of the Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission (the "SEC") and The Nasdaq
National Market. Officers, directors and greater than 10% stockholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that during fiscal year 1995
all filing requirements applicable to its officers, directors, and greater than
10% stockholders were complied with.
RATIFICATION OF SELECTION OF AUDITORS
--------------------------------------------------------------------------------
The Board of Directors has selected the firm of Ernst & Young LLP to serve as
independent auditors for the fiscal year ending June 30, 1996. Ernst & Young LLP
has served as the Company's independent auditors since fiscal 1985. It is
expected that a member of the firm will be present at the meeting with the
opportunity to make a statement if so desired and will be available to respond
to appropriate questions. The Board of Directors recommends a vote FOR the
ratification of this selection.
VOTE REQUIRED
--------------------------------------------------------------------------------
Only stockholders of record as of September 29, 1995 will be entitled to vote at
the meeting and any adjournments thereof. As of that date shares of
Common Stock of the Company were issued and outstanding. The holders of Common
Stock are entitled to one vote per share on any proposal presented at the
meeting. Stockholders may vote in person or by proxy. Execution of a proxy will
not in any way affect a stockholder's right to attend the meeting and vote in
person. Any stockholder giving a proxy has the right to revoke it by written
notice to the Secretary of the Company at anytime before it is exercised, or by
voting in person at the meeting.
The representation in person or by proxy of at least a majority of the
outstanding shares of Common Stock entitled to vote at the meeting is necessary
to constitute a quorum for the transaction of business. Votes withheld from any
nominee for election as a director, abstentions and broker "non-votes" are
counted as present or represented for purposes of determining the presence or
absence of a quorum for the meeting. A "non-vote" occurs when a broker holding
shares for a beneficial owner votes on one proposal, but does not vote on
another proposal because, in respect of such other proposal, the broker does not
have discretionary voting power and has not received instructions from the
beneficial owner.
Voting at the meeting shall be conducted as follows. In the election of
directors, the nominees receiving the highest number of affirmative votes of the
shares present or represented and entitled to vote at the meeting shall be
elected as directors. A vote by a majority of the outstanding shares of the
Company's Common Stock in favor of each of the proposed amendments to the
Company's Certificate of Incorporation is required for the approval of those
amendments. On all other matters being submitted to stockholders, an affirmative
vote of a majority of the shares present or represented at the meeting and
voting on each such matter is required for
18
<PAGE> 22
approval. Abstentions and broker "non-votes" are not counted in determining
whether a majority vote is obtained on any proposal voted on at the meeting,
except that, with regard to the voting on the proposed amendment to the
Company's 1991 Plan, any abstention will count as a vote against the amendment.
An automated system administered by the Company's transfer agent tabulates the
votes. The vote on each matter submitted to stockholders is tabulated
separately.
The persons named as attorneys in the proxies are directors and/or officers
of the Company. All properly executed proxies returned in time to be counted at
the meeting will be voted as stated above under "Election of Directors." Any
stockholder giving a proxy has the right to withhold authority to vote for any
individual nominee to the Board of Directors by writing that nominee's name in
the space provided on the proxy. In addition to the election of directors, the
stockholders will consider and vote upon proposals to change the name of the
Company, to increase the authorized capital of the Company, to amend the 1991
Plan and to ratify the selection of auditors, all as further described above.
Where a choice has been specified on the proxy with respect to the foregoing
matters, the shares represented by the proxy will be voted in accordance with
the specifications and will be voted FOR if no specification is indicated.
The Board of Directors of the Company knows of no other matters to be
presented at the meeting. If any other matter should be presented at the meeting
upon which a vote properly may be taken shares represented by all proxies
received by the Board of Directors will be voted with respect thereto in
accordance with the judgment of the persons named as attorneys in the proxies.
STOCKHOLDER PROPOSALS
--------------------------------------------------------------------------------
Proposals of stockholders intended for inclusion in the proxy statement to be
furnished to all stockholders entitled to vote at the next annual meeting of
stockholders of the Company must be received at the Company's principal
executive offices not later than May 30, 1996. In order to curtail controversy
as to the date on which a proposal was received by the Company, it is suggested
that proponents submit their proposals by Certified Mail -- Return Receipt
Requested.
EXPENSES AND SOLICITATION
--------------------------------------------------------------------------------
The cost of solicitation of proxies will be borne by the Company, and in
addition to soliciting stockholders by mail through its regular employees, the
Company may request banks, brokers and other custodians, nominees and
fiduciaries to solicit their customers who have stock of the Company registered
in the names of a nominee and, if so, will reimburse such banks, brokers and
other custodians, nominees and fiduciaries for their reasonable out-of-pocket
costs. Solicitation by officers and employees of the Company may also be made of
some stockholders in person or by mail, telephone or telegraph following the
original solicitation. The Company may retain a Proxy Solicitation firm to
assist in the solicitation of proxies in connection with the Meeting. If the
Company retains a Proxy Solicitation firm, it will pay such firm customary fees,
expected to be approximately $10,000, plus expenses.
19
<PAGE> 23
APPENDIX A
IMRS INC.
1991 STOCK PLAN
1. PURPOSE. This 1991 Stock Plan (the "Plan") is intended to provide
incentives: (a) to the officers and other employees of IMRS Inc. (the
"Company"), its parent (if any) and any present or future subsidiaries of the
Company (collectively, "Related Corporations") by providing them with
opportunities to purchase stock in the Company pursuant to options granted
hereunder which qualify as "incentive stock options" under Section 422(b) of the
Internal Revenue Code of 1986, as amended (the "Code") ("ISO" or "ISOs"); (b) to
directors, officers, employees and consultants of the Company and Related
Corporations by providing them with opportunities to purchase stock in the
Company pursuant to options granted hereunder which do not qualify as ISOs
("Non-Qualified Option" or "Non-Qualified Options"); (c) to directors, officers,
employees and consultants of the Company and Related Corporations by providing
them with awards of stock in the Company ("Awards"); and (d) to directors,
officers, employees and consultants of the Company and Related Corporations by
providing them with opportunities to make direct purchases of stock in the
Company ("Purchases"). Both ISOs and Non-Qualified Options are referred to
hereafter individually as an "Option" and collectively as "Options". Options,
Awards and authorizations to make Purchases are referred to hereafter
collectively as "Stock Rights". As used herein, the terms "parent" and
"subsidiary" mean "parent corporation" and "subsidiary corporation",
respectively, as those terms are defined in Section 424 of the Code.
2. ADMINISTRATION OF THE PLAN.
A. Board or Committee Administration. The Plan shall be administered by
the Board of Directors of the Company (the "Board") or by a committee appointed
by the Board (the "Committee"); provided, that the Plan shall be administered:
(i) to the extent required by applicable regulations under Section 162(m) of the
Code, by two or more "outside directors" (as defined in the applicable
regulations thereunder); and (ii) to the extent required by Rule 16b-3
promulgated under the Securities Exchange Act of 1934, or any successor
provision ("Rule 16b-3"), by a disinterested administrator or administrators
within the meaning of Rule 16b-3. Hereinafter, all references in this Plan to
the "Committee" shall mean the Board if no Committee has been appointed. Subject
to ratification of the grant or authorization of each Stock Right by the Board
(if so required by applicable state law), and subject to the terms of the Plan,
the Committee shall have the authority to (i) determine the employees of the
Company and Related Corporations (from among the class of employees eligible
under paragraph 3 to receive ISOs) to whom ISOs may be granted, and to determine
(from among the class of individuals and entities eligible under paragraph 3 to
receive Non-Qualified Options and Awards and to make Purchases) to whom
Non-Qualified Options, Awards and authorizations to make Purchases may be
granted; (ii) determine the time or times at which Options or Awards may be
granted or Purchases made; (iii) determine the option price of shares subject to
each Option, which price shall not be less than the minimum price specified in
paragraph 6, and the purchase price of shares subject to each Purchase; (iv)
determine whether each Option granted shall be an ISO or a Non-Qualified Option;
(v) determine (subject to paragraph 7) the time or times when each Option shall
become exercisable and the duration of the exercise period; (vi) determine
whether restrictions such as repurchase options are to be imposed on shares
subject to Options, Awards and Purchases and the nature of such restrictions, if
any, and (vii) interpret the Plan and prescribe and rescind rules and
regulations relating to it. If the Committee determines to issue a Non-Qualified
Option, it shall take whatever actions it deems necessary, under Section 422 of
the Code and the regulations promulgated thereunder, to ensure that such Option
is not treated as an ISO. The interpretation
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and construction by the Committee of any provisions of the Plan or of any Stock
Right granted under it shall be final unless otherwise determined by the Board.
The Committee may from time to time adopt such rules and regulations for
carrying out the Plan as it may deem best. No member of the Board or the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any Stock Right granted under it.
B. Committee Actions. The Committee may select one of its members as its
chairman, and shall hold meetings at such times and places as it may determine.
Acts by a majority of the Committee, or acts reduced to or approved in writing
by a majority of the members of the Committee (if consistent with applicable
state law), shall be the valid acts of the Committee. From time to time the
Board may increase the size of the Committee and appoint additional members
thereof, remove members (with or without cause) and appoint new members in
substitution therefor, fill vacancies however caused, or remove all members of
the Committee and thereafter directly administer the Plan.
C. Grant of Stock Rights to Board Members. Stock Rights may be granted to
members of the Board consistent with the provisions of the first sentence of
paragraph 2(A) above, if applicable. All grants of Stock Rights to members of
the Board shall in all other respects be made in accordance with the provisions
of this Plan applicable to other eligible persons. Members of the Board who are
either (i) eligible for Stock Rights pursuant to the Plan or (ii) have been
granted Stock Rights may vote on any matters affecting the administration of the
Plan or the grant of any Stock Rights pursuant to the Plan, except that no such
member shall act upon the granting to himself of Stock Rights, but any such
member may be counted in determining the existence of a quorum at any meeting of
the Board during which action is taken with respect to the granting to him of
Stock Rights.
3. ELIGIBLE EMPLOYEES AND OTHERS. ISOs may be granted to any employee of
the Company or any Related Corporation. Those officers and directors of the
Company who are not employees may not be granted ISOs under the Plan.
Non-Qualified Options, Awards and authorizations to make Purchases may be
granted to any employee, officer or director (whether or not also an employee)
or consultant of the Company or any Related Corporation. The Committee may take
into consideration a recipient's individual circumstances in determining whether
to grant an ISO, a Non-Qualified Option, an Award or an authorization to make a
Purchase. Granting of any Stock Right to any individual or entity shall neither
entitle that individual or entity to, nor disqualify him from, participation in
any other grant of Stock Rights.
4. STOCK. The stock subject to Options, Awards and Purchases shall be
authorized but unissued shares of Common Stock of the Company, par value $.01
per share (the "Common Stock"), or shares of Common Stock reacquired by the
Company in any manner. The aggregate number of shares which may be issued
pursuant to the Plan is 2,500,000, subject to adjustment as provided in
paragraph 13; provided, however, that such number of shares shall not be subject
to adjustment by reason of the two for one stock split in the form of a 100%
stock dividend declared by the Board of Directors of the Company pursuant to a
Unanimous Written Consent of Directors dated as of September 5, 1991. Any such
shares may be issued as ISOs, Non-Qualified Options or Awards, or to persons or
entities making Purchases, so long as the number of shares so issued does not
exceed such number, as adjusted. No employee of the Company or any Related
Corporation may be granted Options to acquire, in the aggregate, more than
300,000 of shares of Common Stock under the Plan in any fiscal year of the
Company, subject to adjustment as provided in paragraph 13. If any Option
granted under the Plan shall expire or terminate for any reason without having
been exercised in full or shall cease for any reason to be exercisable in whole
or in part, or if the Company shall reacquire any unvested shares issued
pursuant to Awards or Purchases, the unpurchased shares subject to such Options
and any unvested shares so reacquired by the Company shall again be available
for grants of Stock Rights under the Plan; provided, however, that shares
subject to such Options shall be included in the determination of the aggregate
number of
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shares of Common Stock deemed to have been granted to such employee under the
Plan in any fiscal year of the Company.
5. GRANTING OF STOCK RIGHTS. Stock Rights may be granted under the Plan
at any time after September 5, 1991 and prior to September 5, 2001. The date of
grant of a Stock Right under the Plan will be the date specified by the
Committee at the time it grants the Stock Right; provided, however, that such
date shall not be prior to the date on which the Committee acts to approve the
grant. The Committee shall have the right, with the consent of the optionee, to
convert an ISO granted under the Plan to a Non-Qualified Option pursuant to
paragraph 16.
6. MINIMUM OPTION PRICE; ISO LIMITATIONS.
A. Price for Non-Qualified Options. The exercise price per share
specified in the agreement relating to each Non-Qualified Option granted under
the Plan shall in no event be less than the minimum legal consideration required
therefor under the laws of Delaware or the laws of any jurisdiction in which the
Company or its successors in interest may be organized.
B. Price for ISOs. The exercise price per share specified in the
agreement relating to each ISO granted under the Plan shall not be less than the
fair market value per share of Common Stock on the date of such grant. In the
case of an ISO to be granted to an employee owning stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company or any Related Corporation, the price per share specified in the
agreement relating to such ISO shall not be less than one hundred ten percent
(110%) of the fair market value per share of Common Stock on the date of grant.
C. $100,000 Annual Limitation on ISOs. Each eligible employee may be
granted ISOs only to the extent that, in the aggregate under this Plan and all
incentive stock option plans of the Company and any Related Corporation, such
ISOs do not become exercisable for the first time by such employee during any
calendar year in a manner which would entitle the employee to purchase more than
$100,000 in fair market value (determined at the time the ISOs were granted) of
Common Stock in that year. Any options granted to an employee in excess of such
amount will be granted as Non-Qualified Options.
D. Determination of Fair Market Value. If, at the time an Option is
granted under the Plan, the Company's Common Stock is publicly traded, "fair
market value" shall be determined as of the last business day for which the
prices or quotes discussed in this sentence are available prior to the date such
Option is granted and shall mean (i) the average (on that date) of the high and
low prices of the Common Stock on the principal national securities exchange on
which the Common Stock is traded, if the Common Stock is then traded on a
national securities exchange; or (ii) the last reported sale price (on that
date) of the Common Stock on the NASDAQ Stock Market List, if the Common Stock
is not then traded on a national securities exchange; or (iii) the closing bid
price (or average of bid prices) last quoted (on that date) by an established
quotation service for over-the-counter securities, if the Common Stock is not
reported on the NASDAQ Stock Market List. However, if the Common Stock is not
publicly traded at the time an Option is granted under the Plan, "fair market
value" shall be deemed to be the fair value of the Common Stock as determined by
the Committee after taking into consideration all factors which it deems
appropriate, including, without limitation, recent sale and offer prices of the
Common Stock in private transactions negotiated at arm's length.
7. OPTION DURATION. Subject to earlier termination as provided in
paragraphs 9 and 10, each Option shall expire on the date specified by the
Committee, but not more than (i) ten years and one day from the date of grant in
the case of Non-Qualified Options, (ii) ten years from the date of grant in the
case of ISOs generally, and (iii) five years from the date of grant in the case
of ISOs granted to an employee owning stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the
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Company or any Related Corporation. Subject to earlier termination as provided
in paragraphs 9 and 10, the term of each ISO shall be the term set forth in the
original instrument granting such ISO, except with respect to any part of such
ISO that is converted into a Non-Qualified Option pursuant to paragraph 16.
8. EXERCISE OF OPTION. Subject to the provisions of paragraphs 9 through
12, each Option granted under the Plan shall be exercisable as follows:
A. Vesting. The Option shall either be fully exercisable on the date of
grant or shall become exercisable thereafter in such installments as the
Committee may specify.
B. Full Vesting of Installments. Once an installment becomes exercisable
it shall remain exercisable until expiration or termination of the Option,
unless otherwise specified by the Committee.
C. Partial Exercise. Each Option or installment may be exercised at any
time or from time to time, in whole or in part, for up to the total number of
shares with respect to which it is then exercisable.
D. Acceleration of Vesting. The Committee shall have the right to
accelerate the date of exercise of any installment of any Option; provided that
the Committee shall not, without the consent of an optionee, accelerate the
exercise date of any installment of any Option granted to any employee as an ISO
(and not previously converted into a Non-Qualified Option pursuant to paragraph
16) if such acceleration would violate the annual vesting limitation contained
in Section 422(d) of the Code, as described in paragraph 6(C).
9. TERMINATION OF EMPLOYMENT. If an ISO optionee ceases to be employed by
the Company and all Related Corporations other than by reason of death or
disability as defined in paragraph 10, no further installments of his ISOs shall
become exercisable, and his ISOs shall terminate after the passage of ninety
(90) days from the date of termination of his employment, but in no event later
than on their specified expiration dates, except to the extent that such ISOs
(or unexercised installments thereof) have been converted into Non-Qualified
Options pursuant to paragraph 16. Employment shall be considered as continuing
uninterrupted during any bona fide leave of absence (such as those attributable
to illness, military obligations or governmental service) provided that the
period of such leave does not exceed 90 days or, if longer, any period during
which such optionee's right to reemployment is guaranteed by statute. A bona
fide leave of absence with the written approval of the Committee shall not be
considered an interruption of employment under the Plan, provided that such
written approval contractually obligates the Company or any Related Corporation
to continue the employment of the optionee after the approved period of absence.
ISOs granted under the Plan shall not be affected by any change of employment
within or among the Company and Related Corporations, so long as the optionee
continues to be an employee of the Company or any Related Corporation. Nothing
in the Plan shall be deemed to give any grantee of any Stock Right the right to
be retained in employment or other service by the Company or any Related
Corporation for any period of time.
10. DEATH; DISABILITY.
A. Death. If an ISO optionee ceases to be employed by the Company and all
Related Corporations by reason of his death, any ISO of his may be exercised, to
the extent of the number of shares with respect to which he could have exercised
it on the date of his death, by his estate, personal representative or
beneficiary who has acquired the ISO by will or by the laws of descent and
distribution, at any time prior to the earlier of the specified expiration date
of the ISO or 180 days from the date of the optionee's death.
B. Disability. If an ISO optionee ceases to be employed by the Company
and all Related Corporations by reason of his disability, he shall have the
right to exercise any ISO held by him on the date of termination of employment,
to the extent of the number of shares with respect to which he could have
exercised it on that date, at any time prior to the earlier of the specified
expiration date of the ISO or 180 days from the date of the
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termination of the optionee's employment. For the purposes of the Plan, the term
"disability" shall mean "permanent and total disability" as defined in Section
22(e)(3) of the Code or successor statute.
11. ASSIGNABILITY. No Option shall be assignable or transferable by the
optionee except by will or by the laws of descent and distribution. During the
lifetime of the optionee each Option shall be exercisable only by him.
12. TERMS AND CONDITIONS OF OPTIONS. Options shall be evidenced by
instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 11 hereof and may contain such
other provisions as the Committee deems advisable which are not inconsistent
with the Plan, including restrictions applicable to shares of Common Stock
issuable upon exercise of Options. In granting any Non-Qualified Option, the
Committee may specify that such Non-Qualified Option shall be subject to the
restrictions set forth herein with respect to ISOs, or to such other termination
and cancellation provisions as the Committee may determine. The Committee may
from time to time confer authority and responsibility on one or more of its own
members and/or one or more officers of the Company to execute and deliver such
instruments. The proper officers of the Company are authorized and directed to
take any and all action necessary or advisable from time to time to carry out
the terms of such instruments.
13. ADJUSTMENTS. Upon the occurrence of any of the following events, an
optionee's rights with respect to Options granted to him hereunder shall be
adjusted as hereinafter provided, unless otherwise specifically provided in the
written agreement between the optionee and the Company relating to such Option:
A. Stock Dividends and Stock Splits. If the shares of Common Stock shall
be subdivided or combined into a greater or smaller number of shares or if the
Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, the number of shares of Common Stock deliverable upon
the exercise of Options shall be appropriately increased or decreased
proportionately, and appropriate adjustments shall be made in the purchase price
per share to reflect such subdivision, combination or stock dividend.
B. Consolidations or Mergers. If the Company is to be consolidated with
or acquired by another entity in a merger, sale of all or substantially all of
the Company's assets or otherwise (an "Acquisition"), the Committee or the board
of directors of any entity assuming the obligations of the Company hereunder
(the "Successor Board"), shall, as to outstanding Options, either (i) make
appropriate provision for the continuation of such Options by substituting on an
equitable basis for the shares then subject to such Options the consideration
payable with respect to the outstanding shares of Common Stock in connection
with the Acquisition; or (ii) upon written notice to the optionees, provide that
all Options must be exercised, to the extent then exercisable, within a
specified number of days of the date of such notice, at the end of which period
the Options shall terminate; or (iii) terminate all Options in exchange for a
cash payment equal to the excess of the fair market value of the shares subject
to such Options (to the extent then exercisable) over the exercise price
thereof.
C. Recapitalization or Reorganization. In the event of a recapitalization
or reorganization of the Company (other than a transaction described in
subparagraph B above) pursuant to which securities of the Company or of another
corporation are issued with respect to the outstanding shares of Common Stock,
an optionee upon exercising an Option shall be entitled to receive for the
purchase price paid upon such exercise the securities he would have received if
he had exercised his Option prior to such recapitalization or reorganization.
D. Modification of ISOs. Notwithstanding the foregoing, any adjustments
made pursuant to subparagraphs A, B or C with respect to ISOs shall be made only
after the Committee, after consulting with counsel
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for the Company, determines whether such adjustments would constitute a
"modification" of such ISOs (as that term is defined in Section 424 of the Code)
or would cause any adverse tax consequences for the holders of such ISOs. If the
Committee determines that such adjustments made with respect to ISOs would
constitute a modification of such ISOs, it may refrain from making such
adjustments.
E. Dissolution or Liquidation. In the event of the proposed dissolution
or liquidation of the Company, each Option will terminate immediately prior to
the consummation of such proposed action or at such other time and subject to
such other conditions as shall be determined by the Committee.
F. Issuances of Securities. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
subject to Options. No adjustments shall be made for dividends paid in cash or
in property other than securities of the Company.
G. Fractional Shares. No fractional shares shall be issued under the Plan
and the optionee shall receive from the Company cash in lieu of such fractional
shares.
H. Adjustments. Upon the happening of any of the events described in
subparagraphs A, B or C above, the class and aggregate number of shares set
forth in paragraph 4 hereof that are subject to Stock Rights which previously
have been or subsequently may be granted under the Plan shall also be
appropriately adjusted to reflect the events described in such subparagraphs.
The Committee or the Successor Board shall determine the specific adjustments to
be made under this paragraph 13 and, subject to paragraph 2, its determination
shall be conclusive.
If any person or entity owning restricted Common Stock obtained by exercise
of a Stock Right made hereunder receives shares or securities or cash in
connection with a corporate transaction described in subparagraphs A, B or C
above as a result of owning such restricted Common Stock, such shares or
securities or cash shall be subject to all of the conditions and restrictions
applicable to the restricted Common Stock with respect to which such shares or
securities or cash were issued, unless otherwise determined by the Committee or
the Successor Board.
14. MEANS OF EXERCISING STOCK RIGHTS. A Stock Right (or any part or
installment thereof) shall be exercised by giving written notice to the Company
at its principal office address. Such notice shall identify the Stock Right
being exercised and specify the number of shares as to which such Stock Right is
being exercised, accompanied by full payment of the purchase price therefor
either (a) in United States dollars in cash or by check, or (b) at the
discretion of the Committee, through delivery of shares of Common Stock having a
fair market value equal as of the date of the exercise to the cash exercise
price of the Stock Right, (c) at the discretion of the Committee, by delivery of
the grantee's personal recourse note bearing interest payable not less than
annually at no less than 100% of the lowest applicable Federal rate, as defined
in Section 1274(d) of the Code, (d) at the discretion of the Committee and
consistent with applicable law, through the delivery of an assignment to the
Company of a sufficient amount of the proceeds from the sale of the Common Stock
acquired upon exercise of the Stock Right and an authorization to the broker or
selling agent to pay that amount to the Company, which sale shall be at the
participant's direction at the time of exercise, or (e) at the discretion of the
Committee, by any combination of (a), (b), (c) and (d) above. If the Committee
exercises its discretion to permit payment of the exercise price of an ISO by
means of the methods set forth in clauses (b), (c), (d) or (e) of the preceding
sentence, such discretion shall be exercised in writing at the time of the grant
of the ISO in question. The holder of a Stock Right shall not have the rights of
a shareholder with respect to the shares covered by his Stock Right until the
date of issuance of a stock certificate to him for such shares. Except as
expressly provided above in paragraph 13 with respect to changes in
capitalization and stock dividends, no adjustment shall be made for dividends or
similar rights for which the record date is before the date such stock
certificate is issued.
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<PAGE> 29
15. TERM AND AMENDMENT OF PLAN. This Plan was adopted by the Board of
Directors and Stockholders of the Company on September 5, 1991. The Plan shall
expire at the end of the day on September 5, 2001 (except as to Options
outstanding on that date). The Board may terminate or amend the Plan in any
respect at any time, except that, without the approval of the stockholders
obtained within 12 months before or after the Board adopts a resolution
authorizing any of the following actions: (a) the total number of shares that
may be issued under the Plan may not be increased (except by adjustment pursuant
to paragraph 13); (b) the provisions of paragraph 3 regarding eligibility for
grants of ISOs may not be modified; (c) the provisions of paragraph 6(B)
regarding the exercise price at which shares may be offered pursuant to ISOs may
not be modified (except by adjustment pursuant to paragraph 13); and (d) the
expiration date of the Plan may not be extended. Except as otherwise provided in
this paragraph 15, in no event may action of the Board or stockholders alter or
impair the rights of a grantee, without his consent, under any Stock Right
previously granted to him.
16. CONVERSION OF ISOS INTO NON-QUALIFIED OPTIONS; TERMINATION OF
ISOS. The Committee, at the written request of any optionee, may in its
discretion take such actions as may be necessary to convert such optionee's ISOs
(or any installments or portions of installments thereof) that have not been
exercised on the date of conversion into Non-Qualified Options at any time prior
to the expiration of such ISOs, regardless of whether the optionee is an
employee of the Company or a Related Corporation at the time of such conversion.
Such actions may include, but not be limited to, extending the exercise period
or reducing the exercise price of the appropriate installments of such ISOs. At
the time of such conversion, the Committee (with the consent of the optionee)
may impose such conditions on the exercise of the resulting Non-Qualified
Options as the Committee in its discretion may determine, provided that such
conditions shall not be inconsistent with this Plan. Nothing in the Plan shall
be deemed to give any optionee the right to have such optionee's ISOs converted
into Non-Qualified Options, and no such conversion shall occur until and unless
the Committee takes appropriate action. The Committee, with the consent of the
optionee, may also terminate any portion of any ISO that has not been exercised
at the time of such termination.
17. APPLICATION OF FUNDS. The proceeds received by the Company from the
sale of shares pursuant to Options granted and Purchases authorized under the
Plan shall be used for general corporate purposes.
18. GOVERNMENTAL REGULATION. The Company's obligation to sell and deliver
shares of the Common Stock under this Plan is subject to the approval of any
governmental authority required in connection with the authorization, issuance
or sale of such shares.
19. WITHHOLDING OF ADDITIONAL INCOME TAXES. Upon the exercise of a
Non-Qualified Option, the grant of an Award, the making of a Purchase of Common
Stock for less than its fair market value, the making of a Disqualifying
Disposition (as defined in paragraph 20) or the vesting of restricted Common
Stock acquired on the exercise of a Stock Right hereunder, the Company, in
accordance with Section 3402(a) of the Code, may require the optionee, Award
recipient or purchaser to pay additional withholding taxes in respect of the
amount that is considered compensation includible in such person's gross income.
The Committee in its discretion may condition (i) the exercise of an Option,
(ii) the grant of an Award, (iii) the making of a Purchase of Common Stock for
less than its fair market value, or (iv) the vesting of restricted Common Stock
acquired by exercising a Stock Right, on the grantee's payment of such
additional withholding taxes.
20. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION. Each employee who
receives an ISO must agree to notify the Company in writing immediately after
the employee makes a Disqualifying Disposition of any Common Stock acquired
pursuant to the exercise of an ISO. A Disqualifying Disposition is any
disposition (including any sale) of such Common Stock before the later of (a)
two years after the date the employee was granted the ISO, or (b) one year after
the date the employee acquired Common Stock by
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<PAGE> 30
exercising the ISO. If the employee has died before such stock is sold, these
holding period requirements do not apply and no Disqualifying Disposition can
occur thereafter.
21. GOVERNING LAW; CONSTRUCTION. The validity and construction of the
Plan and the instruments evidencing Stock Rights shall be governed by the laws
of the State of Delaware, or the laws of any jurisdiction in which the Company
or its successors in interest may be organized. In construing this Plan, the
singular shall include the plural and the masculine gender shall include the
feminine and neuter, unless the context otherwise requires.
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PLEASE SIGN AND RETURN IMMEDIATELY
----------------------------------
IMRS INC.
Proxy for Annual Meeting of Stockholders
to be held on November 15, 1995
__________________________________________________
SOLICITED BY MANAGEMENT
-----------------------
The undersigned hereby appoints James A. Perakis, Craig M. Schiff and
Lucy Rae Ricciardi, and each of them singly, with full power of substitution,
as proxies to vote all shares of stock of IMRS Inc. (the "Company") of which
the undersigned is entitled to vote at the Annual Meeting of Stockholders of
the Company to be held on Wednesday, November 15, 1995 at 9:00 A.M., at the
Stamford Mariott, 2 Stamford Forum, Stamford, Connecticut, and at any
adjournments thereof, upon matters set forth in the Notice of Annual Meeting
dated October ___, 1995, a copy of which has been received by the undersigned.
1. To elect Harry S. Gruner and Robert W. Thomson as Class III Directors
to serve a three-year term.
For _______ Against _______ Abstain _______
(Instruction: To vote against one of these nominees, check "For" and
write the name of the nominee being voted against on the space
provided below)
_________________________________________
2. To approve an amendment to the Company's Amended and Restated Certificate
of Incorporation (the "Certificate of Incorporation") to change the name
of the Company to Hyperion Software Corporation.
For _______ Against _______ Abstain _______
<PAGE> 32
-2-
3. To approve an amendment to the Company's Certificate of Incorporation to
increase the number of authorized shares of common stock, $.01 par value
per share ("Common Stock"), from 15,000,000 to 50,000,000 shares.
For _______ Against _______ Abstain _______
4. To amend the Company's 1991 Stock Plan to increase the number of shares of
Common Stock authorized for issuance under such plan from 1,200,000 to
2,500,000 shares and to permit grants thereunder to comply with Section
162(m) of the Internal Revenue Code.
For _______ Against _______ Abstain _______
5. To ratify the selection of the firm of Ernst & Young LLP as the independent
auditors of the Company for the fiscal year ending June 30, 1996.
For _______ Against _______ Abstain _______
6. To transact such other business as may properly come before the Annual
Meeting and any adjournments thereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED. IF NO
DIRECTION IS GIVEN, THEY WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND FOR
THE PROPOSALS IN ITEMS 2, 3, 4 AND 5.
Date: _____________ ___, 1995
Signature(s): _________________________________
_________________________________
(If stock is held jointly, each owner should sign.)
PLEASE PRINT NAMES: _________________________________
_________________________________
