Document:

exv10w3

 

Exhibit 10.3

FIFTH AMENDED AND RESTATED STOCKHOLDERS AGREEMENT OF

RENT-A-CENTER, INC.

     THIS FIFTH AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (the “Agreement”),
is effective as of the 13th day of August, 2004, and is entered into by and
among (i) each of Apollo Investment Fund IV, L.P., a Delaware limited
partnership, and Apollo Overseas Partners IV, L.P., an exempted limited
partnership registered in the Cayman Islands acting through its general partner
(individually and collectively with their Permitted Transferees (defined
below), “Apollo”), (ii) Mark E. Speese, an individual (“Speese”), (iii)
Rent-A-Center, Inc., a Delaware corporation (formerly known as Rent-A-Center
Holdings, Inc., the “Company”), (iv) each Person (defined below) named in
Exhibit A attached hereto (the “Speese Other Parties” and together with Speese,
the “Speese Group”), and (v) each other Person who becomes a party to the
Agreement in accordance with the terms hereof (all of the foregoing,
collectively, the “Parties”). Terms with initial capital letters used but not
otherwise defined herein shall have the meanings given in Section 1.1.

W I T N E S S E T H

     WHEREAS, the Parties are parties to that certain Fourth Amended and
Restated Stockholders Agreement dated as of July 11, 2003 (the “July 2003
Agreement”), that amended and restated that certain Third Amended and Restated
Stockholders Agreement dated as of December 31, 2002 (the “December 2002
Agreement”), that amended and restated that certain Second Amended and Restated
Stockholders Agreement dated as of August 5, 2002 (the “2002 Agreement”) to
which the Parties (other than the Company) and Rent-A-Center East, Inc., a
Delaware corporation (formerly known as Rent-A-Center, Inc., the “Original
Company”) are party, that amended and restated that certain Amended and
Restated Stockholders Agreement, dated as of October 8, 2001 (the “2001
Agreement”), that amended and restated that certain Stockholders Agreement
dated as of August 5, 1998 (the “Original Agreement”);

     WHEREAS, on August 29, 2003, the Company distributed a stock dividend of
one and a half shares of common stock, $.01 par value (the “Common Stock”), for
every share of outstanding Common Stock (the “Stock Split”);

     WHEREAS, on May 19, 2004, the Company amended its Certificate of
Incorporation to increase its authorized shares of Common Stock from
125,000,000 to 250,000,000 (the “Authorized Share Increase”); and

     WHEREAS, following the Stock Split and the Authorized Share Increase, the
authorized capital stock of the Company consists of 250,000,000 shares of
Common Stock and 5,000,000 shares of preferred stock, $.01 par value (the
“Preferred Stock”), of which 100 shares are designated Series C convertible
preferred stock, $.01 par value (the “Series C Preferred Stock”), and (ii) as
of July 28, 2004, the issued and outstanding capital stock of the Company
consists of approximately 79,109,972 shares of Common Stock and two shares of
Series C Preferred Stock, with as of July 28, 2004, approximately 10,006,213
shares of Common Stock reserved for issuance in connection with an acquisition,
upon the exercise of certain stock options and upon conversion of the Series C
Preferred Stock;

 

 

     WHEREAS, as of August 13, 2004 (i) Apollo owns of record two shares of
Series C Preferred Stock and 9,318,391 shares of Common Stock, and (ii) the
Speese Group collectively owns 2,446,580 shares of Common Stock; and

     WHEREAS, the Parties and the Company desire to amend and restate the July
2003 Agreement to reflect the Stock Split and the Authorized Share Increase.

     NOW THEREFORE, the Parties agree as follows:

ARTICLE I

DEFINITIONS

     Section 1.1 Definitions. As used in this Agreement, the following terms
have the following meanings:

     “Affiliate” as applied to any specified Person, shall mean any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person and, in the case of a Person
who is an individual, shall include (i) members of such specified Person’s
immediate family (as defined in Instruction 2 of Item 404(a) of Regulation S-K
under the Securities Act) and (ii) trusts, the trustee and all beneficiaries of
which are such specified Person or members of such Person’s immediate family as
determined in accordance with the foregoing clause (i). For the purposes of
this definition, control when used with respect to any Person means the power
to direct the management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms “affiliated,” “controlling” and “controlled” have meanings
correlative to the foregoing. Notwithstanding the foregoing, Apollo and its
Affiliates shall not be deemed Affiliates of the Company for purposes of this
Agreement.

     “Apollo Nominees” shall have the meaning set forth in Section 4.1(a).

     “Authorized Share Increase” shall have the meaning set forth in the
recitals.

     “beneficial owner” of a security shall mean any Person who, directly or
indirectly, through any contract, arrangement, understanding, relationship, or
otherwise has (i) the power to vote, or to direct the voting of, such security
or (ii) the power to dispose, or to direct the disposition of, such security.

     “Board of Directors” shall mean the Board of Directors of the Company.

     “Business Day” shall mean each day other than Saturdays, Sundays and days
when commercial banks are authorized to be closed for business in New York, New
York.

     “Certificate of Designation” shall mean the Certificate of Designation of
the Series C Preferred Stock in the form attached as an exhibit hereto.

     “Charter Documents” shall mean the Certificate of Incorporation, as
amended, and By-Laws of the Company, as amended, in the forms attached as
exhibits hereto.

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     “Commission” shall mean the United States Securities and Exchange
Commission.

     “Common Stock” shall have the meaning set forth in the recitals.

     “Company” shall have the meaning set forth in the preamble.

     “December 2002 Agreement” shall have the meaning set forth in the
recitals.

     “Effective Date” shall mean as of August 13, 2004.

     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.

     “Group Member” shall mean a member of the Speese Group.

     “Indebtedness” shall mean with respect to any person, without duplication,
all liabilities of such person (a) for borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such person or only to
a portion thereof), (b) evidenced by bonds, notes, debentures or similar
instruments or representing the balance deferred and unpaid of the purchase
price of any property (other than any such balance that represents an account
payable or any other monetary obligation to a trade creditor (whether or not an
Affiliate)), or (c) for the payment of money relating to a capitalized lease
obligation.

     “IRR” shall have the meaning set forth in Section 4.2(b).

     “July 2003 Agreement” shall have the meaning set forth in the recitals.

     “MD&A” shall mean a management’s discussion and analysis of the Company’s
financial condition and results of operation comparable to the discussion that
is required to be included in periodic reports filed under the Exchange Act.

     “Notices” shall have the meaning set forth in Section 6.5.

     “Original Agreement” shall have the meaning set forth in the recitals.

     “PIK Shares” means any Shares issued in lieu of cash dividends pursuant to
the Certificate of Designation.

     “pecuniary interest” in any security shall mean the opportunity, directly
or indirectly, to profit or share in any profit derived from a transaction in
such security, and shall include securities owned by an individual’s spouse or
issue or any trust solely for the benefit of such individual, spouse or issue.

     “Permitted Transferee” shall mean:

     (a) in the case of Apollo (i) any officer, director or partner of,
or Person controlling, Apollo, (ii) any other Person that is (x) an
Affiliate of the general partners, investment managers or investment
advisors of Apollo, (y) an Affiliate of Apollo or a Permitted Transferee
of an Affiliate or (z) an investment fund, investment account or

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investment entity whose investment manager, investment advisor or
general partner thereof is Apollo or a Permitted Transferee of Apollo or
(iii) if a Permitted Transferee of a Person set forth in the foregoing
clauses (i) and (ii) is an individual, (x) any spouse or issue of such
individual, or any trust solely for the benefit of such individual,
spouse or issue, and (y) upon such individual’s death, any Person to whom
Shares are transferred in accordance with the laws of descent and/or
testamentary distribution, in each case in a bona fide distribution or
other transaction not intended to avoid the provisions of this Agreement;

(b) in the case of a Group Member, (i) any Person that is solely
controlled by such Group Member, (ii) upon a bona fide liquidation of, or
a bona fide withdrawal from, such Group Member, in each case, not
intended to avoid the provisions of this Agreement, the shareholders,
partners or principals, as the case may be, of such Group Member, or
(iii) if such Group Member is an individual, (x) any spouse or issue of
such individual, or any trust or limited partnership solely for the
benefit of such individual, spouse or issue, and (y) upon such
individual’s death, any Person to whom Shares are transferred in
accordance with the laws of descent and/or testamentary distribution; and

(c) any Person who is a party to this Agreement.

     “Person” shall mean an individual or a corporation, limited liability
company, partnership, trust, or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.

     “Preferred Stock” shall have the meaning set forth in the recitals.

     “Registration Rights Agreement” shall mean the Series A Registration
Rights Agreement, dated as of August 5, 1998, by and between the Original
Company and Apollo, as amended from time to time.

     “Securities Act” shall mean the Securities Act of 1933, as amended, and
the rules and regulations thereunder.

     “Series C Preferred Stock” shall have the meaning set forth in the
recitals.

     “Shares” shall mean, collectively, the Common Stock and the Preferred
Stock, whether now owned or acquired after the date hereof. Whenever this
Agreement refers to a number or percentage of Shares, such number or percentage
shall be calculated as if each of the Shares (including, in the case of Apollo,
any PIK Shares) had been exchanged or converted into shares of Common Stock
immediately prior to such calculation regardless of the existence of any
restrictions on such exchange or conversion.

     “Speese Group” shall have the meaning set forth in the preamble.

     “Speese Included Shares” shall mean those 2,446,580 shares of Common Stock
owned by the Speese Group as of August 13 2004.

     “Speese Other Parties” shall have the meaning set forth in the preamble.

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     “Stock Purchase Agreement” shall mean the Stock Purchase Agreement, dated
as of August 5, 1998, between the Original Company and Apollo.

     “Stock Split” shall have the meaning set forth in the recitals.

     “Subsidiary” shall mean, with respect to any Person, (a) a corporation a
majority of whose capital stock with voting power, under ordinary
circumstances, to elect directors is at the time, directly or indirectly, owned
by such Person, by a Subsidiary of such Person, or by such Person and one or
more Subsidiaries of such Person, (b) a partnership in which such Person or a
Subsidiary of such Person is, at the date of determination, a general partner
of such partnership, or (c) any other Person (other than a corporation) in
which such Person, a Subsidiary of such Person or such Person and one or more
Subsidiaries of such Person, directly or indirectly, at the date of
determination thereof, has (i) at least a majority ownership interest or (ii)
the power to elect or direct the election of the directors or other governing
body of such Person.

     “2001 Agreement” shall have the meaning set forth in the recitals.

     “2002 Agreement” shall have the meaning set forth in the recitals.

     “Transfer” shall mean (i) when used as a noun: any direct or indirect
transfer, sale, assignment, pledge, hypothecation, encumbrance or other
disposition and (ii) when used as a verb: to directly or indirectly transfer,
sell, assign, pledge, hypothecate, encumber, or otherwise dispose of; provided,
however, Transfer shall not include a pledge in connection with a recourse,
bona fide loan transaction that is not intended to avoid the provisions of this
Agreement.

     “Transferee” shall mean any Person to whom Shares have been Transferred in
compliance with the terms of this Agreement.

ARTICLE II

RESTRICTIONS ON TRANSFERS

     Section 2.1 Transfers in Accordance with this Agreement. Any attempt to
Transfer, or purported Transfer of, any of the Speese Included Shares in
violation of the terms of this Agreement shall be null and void and the Company
shall not register upon its books, and shall direct its transfer agent not to
register on its books any such Transfer. A copy of this Agreement shall be
filed with the Secretary of the Company and the Company’s transfer agent and
kept with the records of the Company.

     Section 2.2 Agreement to be Bound.

     (a) No party hereto (other than the Company, Apollo and their
Permitted Transferees) shall Transfer any Shares except (i) to a
Permitted Transferee, or (ii) as specifically provided herein.

     (b) No member of the Speese Group or its Permitted Transferees shall
Transfer its respective pecuniary interests in any of the Speese Included
Shares to any party other than a Permitted Transferee of the Speese
Group, except that during any

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twelve-month period the Speese Group and its Permitted Transferees
shall be entitled to Transfer up to 750,000 Shares in aggregate through
sales pursuant to Rule 144 under the Securities Act, or otherwise.
Notwithstanding the foregoing, in no case shall the Speese Group or its
Permitted Transferees (i) Transfer more than 50% of the Speese Included
Shares during the one year period commencing on August 5, 2002, or (ii)
Transfer any Shares if such Transfer would trigger default or
change-in-control provisions under any material debt instrument of the
Company.

     (c) No Transfer to a Permitted Transferee of Apollo or of any party
as provided in the foregoing clauses (a) and (b) of this Section 2.2
shall be permitted unless (i) the certificates representing such Shares
issued to the Transferee bear the legend provided in Section 2.3, and
(ii) the Transferee (if not already a party hereto) has executed and
delivered to each other party hereto, as a condition precedent to such
Transfer, an instrument or instruments, reasonably satisfactory to the
Company, confirming that the Transferee agrees to be bound by the terms
of this Agreement in the same manner as such Transferee’s transferor,
except as otherwise specifically provided in this Agreement.

     Section 2.3 Legend. Apollo and each Group Member hereby agree that each
outstanding certificate representing Shares issued to any of them (i) on or
after the date of the Original Agreement and prior to the date of the 2001
Agreement shall bear the legend as set forth in Section 2.3 of the Original
Agreement, (ii) on or after the date of the 2001 Agreement and prior to the
date of the 2002 Agreement shall bear the legend as set forth in Section 2.3 of
the 2001 Agreement, (iii) on and after the date of the 2002 Agreement and prior
to the date of the December 2002 Agreement shall bear the legend as set forth
in Section 2.3 of the 2002 Agreement, (iv) on and after the date of the
December 2002 Agreement and prior to the date of the July 2003 Agreement shall
bear the legend set forth in Section 2.3 of the December 2002 Agreement, (v) on
or after the date of the July 2003 Agreement and prior to the Effective Date
shall bear the legend set forth in Section 2.3 of the July 2003 Agreement, and
(vi) on or after the Effective Date, or any certificate issued after the
Effective Date in exchange for or upon conversion of any similarly legended
certificate, shall bear a legend reading substantially as follows:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES
LAWS, AND MAY BE OFFERED AND SOLD ONLY IF SO REGISTERED OR AN EXEMPTION
FROM REGISTRATION IS AVAILABLE. THE HOLDER OF THESE SHARES MAY BE
REQUIRED TO DELIVER TO THE COMPANY, IF THE COMPANY SO REQUESTS, AN
OPINION OF COUNSEL (REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO THE
COMPANY) TO THE EFFECT THAT AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT (OR FROM REGISTRATION OR QUALIFICATION UNDER STATE
SECURITIES LAWS) IS AVAILABLE WITH RESPECT TO ANY TRANSFER OF THESE
SHARES THAT HAS NOT BEEN SO REGISTERED (OR QUALIFIED).

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THE SHARES REPRESENTED BY THIS CERTIFICATE ALSO ARE SUBJECT TO ADDITIONAL
RESTRICTIONS ON TRANSFER AND OBLIGATIONS, TO WHICH ANY TRANSFEREE AGREES
BY HIS ACCEPTANCE HEREOF, AS SET FORTH IN THE FIFTH AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT, AS AMENDED FROM TIME TO TIME, A COPY OF WHICH MAY
BE OBTAINED FROM THE COMPANY. NO TRANSFER OF SUCH SHARES WILL BE MADE ON
THE BOOKS OF THE COMPANY UNLESS ACCOMPANIED BY EVIDENCE OF COMPLIANCE
WITH THE TERMS OF SUCH AGREEMENT AND BY AN AGREEMENT OF THE TRANSFEREE TO
BE BOUND BY THE RESTRICTIONS SET FORTH IN THE FIFTH AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT, AS AMENDED FROM TIME TO TIME.

ARTICLE III

ADDITIONAL RIGHTS AND OBLIGATIONS OF

APOLLO AND THE COMPANY

     Section 3.1 Access to Information; Confidentiality. Upon the request of
Apollo, the Company shall afford Apollo and its accountants, counsel and other
representatives reasonable access to all of the properties, books, contracts,
commitments and records (including, but not limited to, tax returns) of the
Company and its Subsidiaries that are reasonably requested. Apollo will, and
will cause its agents to, conduct any such investigations on reasonable advance
notice, during normal business hours, with reasonable numbers of persons and in
such a manner as not to interfere unreasonably with the normal operations of
the Company and its Subsidiaries.

     Except as otherwise required by applicable law, neither the Company nor
any of its Subsidiaries shall be required to provide access to or to disclose
information where such access or disclosure would violate or prejudice the
rights of any customer or other Person, would jeopardize the attorney-client
privilege of the Person in possession or control of such information, or would
contravene any law, rule, regulation, order, judgment, decree, fiduciary duty
or binding agreement entered into prior to the date hereof. The Parties will
make appropriate substitute disclosure arrangements under circumstances in
which the restrictions of the preceding sentence apply.

     Apollo shall, and shall use its best efforts to cause their
representatives to, keep confidential all such information to the same extent
such information is treated as confidential by the Company, and shall not
directly or indirectly use such information for any competitive or other
commercial purpose. The obligation to keep such information confidential shall
not apply to (i) any information that (x) was already in Apollo’s possession
prior to the disclosure thereof by the Company (other than through disclosure
by any other Person known by Apollo to be subject to a duty of
confidentiality), (y) was then generally known to the public, or (z) was
disclosed to Apollo by a third party not known by Apollo to be bound by an
obligation of confidentiality or (ii) disclosures made as required by law or
legal process or to any person exercising regulatory authority over such Apollo
or its Affiliates. If in the absence of a protective order or the receipt of a
waiver hereunder, Apollo is nonetheless, in the opinion of their counsel,
compelled to disclose information concerning the Company to any tribunal or
governmental body or agency or else stand liable for contempt or suffer other
censure or penalty,

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Apollo may disclose such information to such tribunal or governmental body
or agency without liability hereunder. In addition, in the event that any
information disclosed by the Company to Apollo is material nonpublic
information, Apollo agrees to comply with its obligations under the applicable
Federal and state securities laws with respect thereto, including but not
limited to, the laws pertaining to the possession, dissemination and
utilization of such material nonpublic information.

     Section 3.2 Furnishing of Information. (a) The Company shall deliver to
Apollo, as long as Apollo shall own any Shares:

     (i) As promptly as practical, but in no event later than 30
days after the end of each calendar month, a copy of the monthly
financial reporting package for such month customarily prepared for
the Company’s Chief Executive Officer.

     (ii) As promptly as practical, but in no event later than 60
days after the close of each of its first three quarterly
accounting periods during any fiscal year of the Company, the
consolidated balance sheet of the Company as at the end of such
quarterly period, and the related consolidated statements of
operations, stockholders’ equity and cash flows for such quarterly
period, and for the elapsed portion of the fiscal year ended with
the last day of such quarterly period, and in each case setting
forth comparative figures for the related periods in the prior
fiscal year (if such comparative figures are available without
unreasonable expense), all of which shall be certified by the chief
financial officer of the Company, to have been prepared in
accordance with generally accepted accounting principles, subject
to year-end audit adjustments, together with an MD&A;

     (iii) As promptly as practical, but in no event later than 105
days after the close of each fiscal year of the Company, the
consolidated balance sheet of the Company as of the end of such
fiscal year and the related consolidated statements of operations,
stockholders’ equity and cash flows for such fiscal year, in each
case setting forth comparative figures for the preceding fiscal
year, and certified by independent certified public accountants of
recognized national standing, together with an MD&A; and

     (iv) All reports, if any, filed by the Company or any
Subsidiary of the Company with the Commission under the Exchange
Act, as promptly as practical, but in no event later than 15 days
after filing any such reports with the Commission.

     (b) The provisions of Sections 3.2(a)(ii) and (iii) above shall be
deemed to have been satisfied if the Company delivers the reports timely
filed by the Company with the Commission on Form 10-Q or 10-K, as
applicable, for such periods promptly, but in no event later than 15 days
after filing any such Form with the Commission.

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ARTICLE IV

CORPORATE GOVERNANCE AND VOTING

     Section 4.1 Board of Directors of the Company.

     (a) As of the Effective Date, the number of directors constituting
the entire Board of Directors of the Company is eight (8), three (3) of
which have been previously designated by Apollo for nomination to the
Board of Directors (each, an “Apollo Nominee” and collectively, the
“Apollo Nominees”). Apollo (or any representative thereof designated by
Apollo) shall hereafter be entitled, but not required, to designate up to
two (2) Apollo Nominees for nomination to the Board of Directors, such
that, subject to Section 4.1(j) hereof, up to two (2) Apollo Nominees
shall be members of the Board of Directors of the Company, and the
Company shall be entitled, but not required, to nominate the remaining
members to the Board of Directors. So long as Apollo shall be entitled
to nominate two (2) Apollo Nominees, such Apollo Nominees shall be
classified in separate classes (be it Class I, Class II or Class III).

     (b) The Speese Group shall vote all of the Shares owned or held of
record by them at all regular and special meetings of the stockholders of
the Company called or held for the purpose of filling positions on the
Board of Directors, and in each written consent executed in lieu of such
a meeting of stockholders, and, to the extent entitled to vote thereon,
each party hereto shall take all actions otherwise necessary to ensure
(to the extent within the Parties’ collective control) that the Apollo
Nominees are elected to the Board of Directors.

     (c) To the extent an Apollo Nominee may be removed for cause
pursuant to the provisions of the Charter Documents, if Apollo requests
such removal in writing, the Company and the Speese Group shall use their
respective best efforts to call, or cause the appropriate officers and
directors of the Company to call, a special meeting of stockholders of
the Company, as applicable, and the Speese Group shall vote all of the
Shares owned or held of record by them for, or to take all actions by
written consent in lieu of any such meeting necessary to cause the
removal of any such Apollo Nominee. Subject to Section 4.1(j) hereof,
Apollo shall have the right to designate a new nominee in the event any
Apollo Nominee shall be so removed under this Section 4.1(c) or shall
vacate his directorship for any reason.

     Except as provided in this Section 4.1(c), each Group Member hereto
agrees that, at any time that it is then entitled to vote for the removal
of directors at a meeting of the stockholders of the Company, it will not
vote in favor of the removal of an Apollo Nominee unless (i) such removal
shall be at the request of Apollo or (ii) the right of Apollo to
designate such director has terminated in accordance with clause (e) or
(j) below.

     (d) The Company shall not, and shall not permit any of its
Subsidiaries to, without the consent of holders of a majority of the
Shares held by Apollo, take any action under Section 4.2(b) of this
Agreement that requires the approval of the Apollo

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Nominees, if any of the Apollo Nominees are Persons whose removal
from the Board of Directors has been requested pursuant to Section 4.1(c)
of this Agreement at or prior to the time of such action by Apollo. Each
party hereto shall use reasonable efforts to prevent any action from
being taken by the Board of Directors, during the pendency of any vacancy
due to death, resignation or removal of a director, unless the Person
entitled to have a person nominated by it elected to fill such vacancy
shall have failed, for a period of ten (10) days after notice of such
vacancy, to nominate a replacement.

     (e) At such time as Apollo, together with any and all of its
Permitted Transferees, cease to hold in the aggregate 7,457,043 Shares,
Apollo shall be entitled, but not required, to nominate only one Apollo
Nominee in accordance with this Article IV. At such time as Apollo,
together with any and all of its Permitted Transferees, cease to hold in
the aggregate 2,237,335 Shares, Apollo shall no longer be entitled to
nominate any Apollo Nominees in accordance with this Article IV.

     (f) Subject to Section 4.1(j) hereof, in the event the Company
establishes an Executive Committee of the Board of Directors, it shall be
comprised of such persons as a majority of the Board of Directors shall
approve, provided, however, such committee shall also include at least
one Apollo Nominee. The Executive Committee shall have authority,
subject to applicable law, to take all actions that (A) are ancillary to
or arise in the normal course of the businesses of the Company, or (B)
implement and are consistent with resolutions of the Board of Directors
provided, however, that such Executive Committee shall not be authorized
to take any action which, if proposed to be taken by the full Board of
Directors would require the affirmative vote of the Apollo Nominees in
accordance with Section 4.2.

     (g) Subject to Section 4.1(j) hereof, unless otherwise approved in
advance in writing by all the Apollo Nominees, each and every committee
of the Board of Directors shall be comprised of three directors, one of
whom shall be an Apollo Nominee and at least one of whom is selected by
the Board of Directors but who is not also a member of management of the
Company.

     (h) Each committee of the Board of Directors, to which authority has
been delegated, shall keep complete and accurate minutes and records of
all actions taken by such committee, prepare such minutes and records in
a timely fashion and promptly distribute such minutes and records to each
member of the Board of Directors.

     (i) The Parties agree that upon the request of Apollo, the Company
shall cause the Board of Directors of any wholly-owned subsidiary of the
Company to include the number of Apollo Nominees in the same proportion
of the total number of members of the Board of Directors of such
subsidiary as the proportion of the Company’s Board of Directors to which
Apollo is entitled pursuant to this Section 4.1, and shall cause each and
every committee of such Board of Directors of such subsidiaries to
include at least one of the individuals designated as an Apollo Nominee
and included as a member of such Board of Directors pursuant to the
foregoing.

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     (j) As of the date hereof, the Board of Directors includes three (3)
Apollo Nominees. The parties agree that, upon the request of the
Company, Apollo shall cause one Apollo Nominee (to be selected in the
sole discretion of Apollo) to resign as a member of the Board of
Directors of the Company, such that the Board of Directors of the Company
would thereafter include two (2) Apollo Nominees. The parties further
agree that, in the event Apollo, together with any and all of its
Permitted Transferees, cease to hold in the aggregate 7,457,043 Shares,
then upon the request of the Company, Apollo shall cause an Apollo
Nominee to resign as a member of the Board of Directors of the Company,
such that the Board of Directors of the Company would thereafter include
one (1) Apollo Nominee. The parties further agree that, in the event
Apollo, together with any and all of its Permitted Transferees, cease to
hold in the aggregate 2,237,335 Shares, then upon the request of the
Company, Apollo shall cause the remaining Apollo Nominee to resign as a
member of the Board of Directors of the Company, such that the Board of
Directors of the Company would thereafter cease to include any Apollo
Nominee.

     Section 4.2 Action by the Board of Directors.

     (a) Except as provided below, all decisions of the Board of
Directors shall require the affirmative vote of a majority of the
directors of the Company then in office, or a majority of the members of
an Executive Committee of the Board of Directors, to the extent such
decisions may be lawfully delegated to an Executive Committee pursuant to
Section 4.1(f).

     (b) The Company shall not, and it shall cause each of its
Subsidiaries not to, take (or agree to take) any action regarding the
following matters, directly or indirectly, including through a merger or
consolidation with any other corporation or otherwise, without the
affirmative vote of the Apollo Nominees: (i) increase the number of
authorized shares of Preferred Stock or authorize the issuance or issue
of any shares of Preferred Stock other than to existing holders of
Preferred Stock; (ii) issue any new class or series of equity security or
issue any additional shares of Series C Preferred Stock; (iii) amend,
alter or repeal, in any manner whatsoever, the designations, preferences
and relative rights and limitations and restrictions of the Series C
Preferred Stock; (iv) amend, alter or repeal any of the provisions of the
Charter Documents or the Certificate of Designation in a manner that
would negatively impact the holders of the Series C Preferred Stock,
including (but not limited to) any amendment that is in conflict with the
approval rights set forth in this Section 4.2; (v) directly or
indirectly, redeem, purchase or otherwise acquire for value (including
through an exchange), or set apart money or other property for any
mandatory purchase or other analogous fund for the redemption, purchase
or acquisition of any shares of Common Stock or Junior Stock (as defined
in the Certificate of Designation), or declare or pay any dividend or
make any distribution (whether in cash, shares of capital stock of the
Company, or other property) on shares of Common Stock or Junior Stock;
(vi) cause the number of directors of the Company to be greater than
eight (8); (vii) enter into any agreement or arrangement with or for the
benefit of any Person who is an Affiliate of the Company with a value in
excess of $5 million in a single transaction or series of related
transactions; (viii) effect a voluntary liquidation, dissolution or
winding up of the Company; (ix) sell or agree to sell all or

11

 

substantially all of the assets of the Company, unless such
transaction (1) is a sale for cash and (2) results in an internal rate of
return (“IRR”) to Apollo of 30% compounded quarterly or greater with
respect to each Share issued to Apollo on August 5, 1998; or (x) enter
into any merger or consolidation or other business combination involving
the Company (except a merger of a wholly-owned subsidiary of the Company
into the Company in which the Company’s capitalization is unchanged as a
result of such merger) unless such transaction (1) is for cash and (2)
results in an IRR to Apollo of 30% compounded quarterly or greater with
respect to each Share issued to Apollo on August 5, 1998.

     (c) Notwithstanding the foregoing Section 4.2(b), if Apollo owns
less than 7,457,043 Shares, the provisions of Section 4.2(b) shall cease
to exist and shall be of no further force or effect.

     (d) While any shares of Series C Preferred Stock are outstanding,
the Company shall not and it shall cause each of its Subsidiaries not to,
issue any debt securities of the Company with a value in excess of $10
million (including any refinancing of existing indebtedness) without the
majority affirmative vote of the Finance Committee.

     (e) While any shares of Series C Preferred Stock are outstanding,
the Company shall not, and it shall cause each of its Subsidiaries not
to, issue any equity securities of the Company with a value in excess of
$10 million (including any refinancing of existing indebtedness) without
the unanimous affirmative vote of the Finance Committee; provided,
however, that the following equity issuances shall require only a
majority affirmative vote of the Finance Committee: (A) an offering of
Common Stock in which the selling price is equal to or greater than the
price that would imply a 25% or greater IRR compounded quarterly on the
Conversion Price (as defined in the Certificate of Designation) from
August 5, 1998 and (B) an issuance of equity in connection with an
acquisition if the issuance is equal to or less than 10% of the
outstanding Common Stock (calculated post-issuance of such shares of
Common Stock).

     Section 4.3 Charter Documents. (a) The Charter Documents attached as
exhibits hereto are the Charter Documents as in effect on the Effective Date.

     (a) The Company covenants that it will act, and each Group Member
and Apollo agrees to use its best efforts to cause the Company to act, in
accordance with its Charter Documents and Certificate of Designation in
all material respects and to cause compliance with all provisions
contained herein. Each Group Member and Apollo shall vote all the Shares
owned or held of record by it at any regular or special meeting of
stockholders of the Company or in any written consent executed in lieu of
such a meeting of stockholders, and shall take all action necessary, to
ensure (to the extent within the Parties’ collective control) that (i)
the Charter Documents and Certificate of Designation of the Company do
not, at any time, conflict with the provisions of this Agreement, and
(ii) unless an amendment is approved by the Board of Directors in
accordance with Section 4.2, the Charter Documents of the Company and the
Certificate of Designation continue to be in effect in the forms attached
as exhibits hereto.

12

 

ARTICLE V

TERMINATION

     Section 5.1 Termination. Except as otherwise provided herein with respect
to certain specific provisions, this Agreement shall terminate upon the earlier
to occur of:

     (a) the mutual agreement of the Parties,

     (b) with respect to any party hereto other than the Company, such
party ceasing to own, beneficially or otherwise, any Shares,

     (c) such time as less than 4,342,760 Shares continue to be subject
to the provisions of this Agreement, or

     (d) on August 5, 2009.

ARTICLE VI

MISCELLANEOUS

     Section 6.1 No Inconsistent Agreements. Each party hereto hereby consents
to the termination of any prior written or oral agreement or understanding,
including without limitation the July 2003 Agreement, restricting, conditioning
or limiting the ability of any party to transfer or vote Shares.

     Each of the Company and the Group Members represents and agrees that, as
of the Effective Date, there is no (and from and after the Effective Date they
will not, and will cause their respective Subsidiaries and Affiliates not to,
enter into any) agreement with respect to any securities of the Company or any
of its Subsidiaries (and from and after the Effective Date neither the Company
nor any Group Members shall take, or permit any of their Subsidiaries or
Affiliates to take, any action) that is inconsistent in any material respect
with the rights granted to Apollo in this Agreement.

     Without limiting the foregoing and other than the July 2003 Agreement and
the Registration Rights Agreement, the Company represents that there are no
existing agreements relating to the voting or registration of any equity
securities of the Company or any of its Subsidiaries, and there are no other
existing agreements between the Company and any other holder of Shares relating
to the transfer of any equity securities of the Company or any of its
Subsidiaries.

     Section 6.2 Recapitalization, Exchanges. etc. If any capital stock or
other securities are issued in respect of, in exchange for, or in substitution
of, any Shares by reason of any reorganization, recapitalization,
reclassification, merger, consolidation, spin-off, partial or complete
liquidation, stock dividend, split-up, sale of assets, distribution to
stockholders or combination of the Shares or any other change in capital
structure of the Company, appropriate adjustments shall be made with respect to
the relevant provisions of this Agreement so as to fairly and equitably
preserve, as far as practicable, the original rights and obligations of the

13

 

Parties under this Agreement and the terms “Common Stock,” “Preferred
Stock” and “Shares,” each as used herein, shall be deemed to include shares of
such capital stock or other securities, as appropriate. Without limiting the
foregoing, whenever a particular number of Shares is specified herein, such
number shall be adjusted to reflect stock dividends, stock-splits, combinations
or other reclassifications of stock or any similar transactions.

     Section 6.3 Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the Parties, and their respective successors
and permitted assigns; provided that (i) neither this Agreement nor any rights
or obligations hereunder may be transferred or assigned by the Company (except
by operation of law in any permitted merger); (ii) neither this Agreement nor
any rights or obligations hereunder may be transferred or assigned by the Group
Members or Apollo except to any Person to whom it has Transferred Shares in
compliance with this Agreement and who has become bound by this Agreement
pursuant to Section 2.2 hereof; and (iii) the rights of the Parties under
Article IV hereof may not be assigned to any Person except as explicitly
provided therein.

     Section 6.4 No Waivers: Amendments. (a) No failure or delay by any party
in exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.

     (a) This Agreement may not be amended or modified, nor may any
provision hereof be waived, other than by a written instrument signed by
the Parties.

     Section 6.5 Notices. All notices, demands, requests, consents or
approvals (collectively, “Notices”) required or permitted to be given hereunder
or which are given with respect to this Agreement shall be in writing and shall
be personally delivered or mailed, registered or certified, return receipt
requested, postage prepaid (or by a substantially similar method), or delivered
by a reputable overnight courier service with charges prepaid, or transmitted
by hand delivery or facsimile, addressed as set forth below, or such other
address (and with such other copy) as such party shall have specified most
recently by written notice. Notice shall be deemed given or delivered on the
date of service or transmission if personally served or transmitted by
facsimile. Notice otherwise sent as provided herein shall be deemed given or
delivered on the third business day following the date mailed or on the next
business day following delivery of such notice to a reputable overnight courier
service.

     To the Company or the Speese Group:

	 	 	 	 	 
	 
	 	Rent-A-Center, Inc.
	 
	 	5700 Tennyson Parkway
	 
	 	Third Floor
	 
	 	Plano, Texas 75024
	 
	 	Attn: Mark E. Speese
	 
	 	Facsimile: (972) 801-1200

14

 

     with a copy (which shall not constitute notice) to:

	 	 	 	 	 
	 
	 	Fulbright & Jaworski L.L.P.
	 
	 	2200 Ross Avenue
	 
	 	Suite 2800
	 
	 	Attn: Thomas W. Hughes, Esq.
	 
	 	Facsimile: (214) 855-8200

     To Apollo:

	 	 	 	 	 
	 
	 	Apollo Investment Fund IV, L.P. and/or
	 
	 	Apollo Overseas Partners IV, L.P.
	 
	 	c/o Apollo Management IV, L.P.
	 
	 	1999 Avenue of the Stars, Suite 1900
	 
	 	Los Angeles, California 90067
	 
	 	Attn: Michael D. Weiner
	 
	 	Facsimile: (310) 201-4166

     with a copy (which shall not constitute notice) to:

	 	 	 	 	 
	 
	 	Morgan, Lewis & Bockius LLP
	 
	 	300 South Grand Avenue, Suite 2200
	 
	 	Los Angeles, California 90071
	 
	 	Attn: John F. Hartigan, Esq.
	 
	 	Facsimile: (213) 612-2554

     Section 6.6 Inspection. So long as this Agreement shall be in effect,
this Agreement and any amendments hereto and waivers hereof shall be
distributed to all Parties after becoming effective and shall be made available
for inspection at the principal office of the Company by Apollo.

     Section 6.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, as applied to
contracts made and performed within the State of New York, without regard to
principles of conflict of laws, except as to matters of corporate governance,
which shall be interpreted in accordance with the General Corporation Law of
the State of Delaware. Each party hereto consents to the non-exclusive
jurisdiction of the federal and state courts within the State of New York.

     Section 6.8 Section Headings. The section headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.

     Section 6.9 Entire Agreement. This Agreement, together with the Purchase
and Exchange Agreement, Stock Purchase Agreement, the Certificate of
Designation and the Registration Rights Agreement, constitutes the entire
agreement and understanding among the Parties with respect to the subject
matter hereof and thereof and supersedes the July 2003 Agreement and any and
all prior agreements and understandings, written or oral, relating to the
subject matter hereof.

15

 

     Section 6.10 Severability. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdictions, it being intended that
all rights and obligations of the Parties hereunder shall be enforceable to the
fullest extent permitted by law.

     Section 6.11 Counterparts. This Agreement may be signed in counterparts,
each of which shall constitute an original and which together shall constitute
one and the same agreement.

     Section 6.12 Required Approvals. If approval of this Agreement or any of
the transactions contemplated hereby shall be required by any governmental or
supra-governmental agency or instrumentality or is considered to be necessary
or advisable to all the Parties, all Parties shall use their best efforts to
obtain such approval.

     Section 6.13 Public Disclosure. The Company shall not, and shall not
permit any of its Subsidiaries to, make any public announcements or disclosures
relating or referring to Apollo, any of its affiliates, or any of their
respective directors, officers, partners, employees or agents (including,
without limitation, any Person designated as a director of the Company pursuant
to the terms hereof) unless Apollo has consented to the form and substance
thereof, which consent shall not be unreasonably withheld except to the extent
such disclosure is, in the opinion of counsel, required by law or by stock
exchange regulation, provided that (i) any such required disclosure shall only
be made, to the extent consistent with the law, after consultation with Apollo
and (ii) no such announcement or disclosure (except as required by law or by
stock exchange regulation) shall identify any such Person without Apollo’s
prior consent.

     Section 6.14 Payment of Costs and Expenses. The Company shall pay
Apollo’s reasonable and documented costs and expenses (including attorneys’
fees) associated with negotiation, documentation and completion of this
Agreement and the transactions contemplated herein.

[Remainder of Page Intentionally Left Blank]

16

 

     IN WITNESS WHEREOF, the Parties have executed this Fifth Amended and
Restated Stockholders Agreement as of the date first written above.

RENT-A-CENTER, INC.

a Delaware corporation

By: /s/ Mitchell E. Fadel          

Name: Mitchell E. Fadel          

Title: President                         

APOLLO INVESTMENT FUND IV, L.P.

a Delaware limited partnership

	 
	By:       Apollo Advisors IV, L.P.

             its General Partner

	 

	               By:   Apollo Capital Management IV, Inc.
                        its General Partner

	 

	               By:  /s/ Peter P. Copses      

	               Name:  Peter P. Copses      

	               Title:    Vice President        

APOLLO OVERSEAS PARTNERS IV, L.P.

an exempted limited partnership registered in the Cayman Islands

	 	 	 
	By:

	 	Apollo Advisors IV, L.P.

its General Partner
	 
	 	 
	

	 	By: Apollo Capital Management IV, Inc.

       its Managing General Partner

	 
	 

	               By:  /s/ Peter P. Copses      

	               Name:  Peter P. Copses      

	               Title:    Vice President        

 

[Signature Page to Fifth Amended and Restated Stockholders Agreement]

 

/s/Mark E. Speese                                     

Mark E. Speese

/s/Carolyn Speese                                     

Carolyn Speese

ALLISON REBECCA SPEESE 2000 REMAINDER TRUST

By: /s/ Stephen Elken                                 

       Stephen Elken, as Trustee

JESSICA ELIZABETH SPEESE 2000 REMAINDER TRUST

By: /s/ Stephen Elken                                 

       Stephen Elken, as Trustee

ANDREW MICHAEL SPEESE 2000 REMAINDER TRUST

By: /s/ Stephen Elken                                 

       Stephen Elken, as Trustee

 

[Signature Page to Fifth Amended and Restated Stockholders Agreement]

 

EXHIBIT “A”

Mark E. Speese

Carolyn Speese

Allison Rebecca Speese 2000 Remainder Trust

Jessica Elizabeth Speese 2000 Remainder Trust

Andrew Michael Speese 2000 Remainder Trust

 

EXHIBIT “B”

Charter Documents<PAGE>
                                                                               .
                                                                               .
                                                                               .

                                                                    EXHIBIT 10.1

                                                                 [HYPERION LOGO]

                         EXECUTIVE EMPLOYMENT AGREEMENT

<TABLE>
<CAPTION>
EMPLOYEE NAME:            EFFECTIVE DATE:           OFFER LETTER DATE (if any):
<S>                       <C>                       <C>
Jeffrey R. Rodek          July 21, 2004                        None
</TABLE>

--------------------------------------------------------------------------------

POSITION (title):                                     SUPERVISOR (title):
Executive Chairman of Board of                        Board of Directors
Directors

--------------------------------------------------------------------------------

EMPLOYMENT (briefly describe nature of position):

Employee will devote up to one half of his business efforts as Chairman of the
Board of Directors of the Company.

--------------------------------------------------------------------------------

BASE SALARY:                                                   BONUS PERCENTAGE:
 Six hundred thousand dollars ($600,000.00)                         None

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
INITIAL TERM:               RENEWAL PERIOD:             CONTINUATION PERIOD:
<S>                         <C>                         <C>
Twelve (12) months          Twelve (12) months          Four (4) months, or
                                                        through the end of
                                                        the current term or
                                                        renewal period,
                                                        whichever is greater.
</TABLE>

--------------------------------------------------------------------------------

ADDITIONAL BENEFITS (if any):

1.    Reimbursement for the reasonable and customary cost of an annual physical
examination.

2.    The Company will provide to the Employee certain reasonable financial
planning and income tax services, as follows. The financial planning and tax
firm(s) of Employee's choice will prepare and sign the Employee's individual
income tax returns and provide the Employee with estimated tax calculations. In
addition, the tax professionals will provide the Employee with income tax
projections to help Employee develop his or her personal financial goals and
strategies, including planning for the exercise and/or sale of option stock.

--------------------------------------------------------------------------------

ADDITIONAL TERMS (if any):

1. On October 11, 1999, the Company loaned Employee one million dollars
($1,000,000.00). This note bears interest and is due full on October 11, 2005
(or earlier in certain events.) Effective January 2002, the Company agreed it
will forgive 25% of the principal, or two hundred fifty thousand dollars
($250,000), and the interest accrued with respect to such 25%, for any year,
commencing with the year ending June, 2002, in which the earnings per share of
the Company equal or exceed targets set by the Compensation Committee of the
Board of Directors. In the event that the Company's earnings per share are under
or over such earnings per share target, then the Company will consider forgiving
less or more, respectively, of the 25% amount, provided that the Company is only
obligated to forgive 25%, and then only in the event the earnings per share
target is met. Employee will be responsible for paying all personal income tax
due on account of any such forgiveness.

--------------------------------------------------------------------------------

THIS EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is entered into as of the
effective date ("Effective Date") specified above, by and between Hyperion
Solutions Corporation, with offices currently at 1344 Crossman Avenue,
Sunnyvale, California 94089 ("Hyperion") and the executive employee ("Employee")
specified above.

Executive Employment Agreement (v.10.0 7/04) - Hyperion Confidential

                                                                     Page 1 of 8
<PAGE>

1.    DUTIES AND SCOPE OF EMPLOYMENT

a.    Subject to the terms of this Agreement, Hyperion agrees to employ Employee
in the position ("Position") specified in above, or in such other position as
Hyperion subsequently may assign to Employee, to perform the duties of the
Position ("Employment") specified above. Employee shall report to the supervisor
("Supervisor") specified above.

b.    During the term of Employee's Employment, without the prior written
approval of Hyperion (which shall not be unreasonably withheld), Employee shall
not render services in any capacity to any other person or entity, and shall not
act as a sole proprietor, partner or managing member of any other entity or as a
shareholder owning more that one percent (1%) of the stock of any other
competitive corporation or entity. The foregoing, however, shall not preclude
Employee from engaging in reasonable community, school or charitable activities.

c.    Employee shall comply with Hyperion's policies and rules, as they may be
in effect from time to time, during the term of Employee's Employment.

d.    Employee represents and warrants to Hyperion, to the best of Employee's
knowledge and belief, that Employee is under no obligation or commitment,
whether contractual or otherwise, that is inconsistent with Employee's
obligations under this Agreement. Employee represents and warrants to Hyperion,
to the best of Employee's knowledge and belief, that Employee's Employment with
Hyperion will not require the use, or disclosure, of any trade secrets or other
proprietary information or intellectual property in which Employee, or any other
person, has any right, title or interest, and that Employee's Employment by
Hyperion, as contemplated by this Agreement, will not infringe or violate the
rights of any other person or entity. Employee represents and warrants to
Hyperion, to the best of Employee's knowledge and belief, that Employee has
returned all property and confidential information belonging to any prior
employer.

2.    COMPENSATION

a.    Hyperion shall pay Employee, as compensation for Employee's services, a
base salary at a gross annual rate of not less than the base salary ("Base
Salary") specified above. Such Base Salary shall be payable in accordance with
Hyperion's standard payroll procedures. The Base Salary, together with any
increases in such compensation that Hyperion may grant from time to time, shall
be referred to as the base compensation ("Base Compensation").

b.    During the term of Employee's Employment, Employee shall be eligible to
participate in any employee benefit plans maintained by Hyperion for similarly
situated employees, subject in each case to the generally applicable terms and
conditions of the plan in question, and to the determinations of any person or
committee administering such plan. In addition to the foregoing benefits,
Employee shall be entitled to the additional benefits ("Additional Benefits")
specified above, if any.

c.    During the term of Employee's Employment, Employee shall be authorized to
incur necessary and reasonable travel, entertainment and other business expenses
in connection with Employee's duties hereunder. Hyperion shall reimburse
Employee for such expenses upon presentation of an itemized account and
appropriate supporting documentation, all in accordance with Hyperion's
generally applicable policies. Any single expenditure in excess of ten thousand
dollars ($10,000.00) shall require the prior approval of Hyperion's Chief
Executive Officer, President or Chief Financial Officer.

3.    TERM OF EMPLOYMENT

a.    This Agreement shall be for the initial term ("Initial Term") specified
above. Thereafter, this Agreement shall automatically be renewed for successive
renewal periods ("Renewal Period") as specified above, unless either party has
given the other party written notice of non-renewal not less than one hundred
twenty (120) days prior to the end of the Initial Term, or Renewal Period then
in effect.

b.    Hyperion agrees to continue Employee's Employment, and Employee agrees to
remain in Employment with Hyperion, from the Effective Date until the earlier of
the Initial Term Date or Renewal Period, or the date when Employee's Employment
terminates according to section 4, below.

4.    TERMINATION

a.    Employee may terminate Employee's Employment at any time and for any
reason (or no reason) by giving Hyperion thirty (30) days advance written
notice. Hyperion may terminate Employee's Employment at any time and for any
reason (or no reason), and with or without cause, by giving Employee one hundred
twenty (120) day advance written notice.

b.    Hyperion may also terminate Employee's Employment due to Employee's
permanent disability, by giving Employee notice in writing. Permanent disability
shall mean that Employee, at the time notice is given, has failed to perform
Employee's duties under this Agreement for sixty (60), or more consecutive days,
or for ninety (90), or more days, during any twelve (12) month period, as the
result of Employee's incapacity due to physical or mental injury, disability or
illness, and which Hyperion is unable to accommodate reasonably without undue
hardship. Employee's Employment shall terminate automatically in the event of
Employee's death.

Executive Employment Agreement (v.10.0 7/04) - Hyperion Confidential

                                                                     Page 2 of 8
<PAGE>

c.    Unless otherwise provided for herein, upon the termination of Employee's
Employment pursuant to this section, Employee shall only be entitled to the
compensation, benefits and reimbursements described in section 2 for the period
preceding the effective date of the termination. No unpaid bonus under section 2
shall be payable for the year in which Employee's Employment terminates, unless
the applicable bonus program expressly provides for the payment of a prorated
bonus for such year. The payments under this Agreement shall fully discharge all
responsibilities of Hyperion to Employee. The termination of this Agreement
shall not limit or otherwise affect Employee's obligations under section 5.

d.    Any other provision of this Agreement notwithstanding, subsections e and
f, below, shall not apply unless Employee has executed a general release (in a
form prescribed by Hyperion, such as the current Termination Release Agreement
available from the Hyperion legal department) of all known and unknown claims
that Employee may then have against Hyperion or persons affiliated with
Hyperion. Such release shall include, among other things, an agreement not to
prosecute any legal action or other proceeding based upon any of such claims.
Employee acknowledges that such release may provide that in the event of a
breach by Employee of the terms of the release, or of Employee's obligations
under section 5 hereof, Hyperion shall be entitled to recover from Employee all
amounts paid under subsections e and f of this section, as well as all
litigation costs (including attorneys' fees and expenses) incurred by Hyperion
in connection with such breach.

e.    If Hyperion does not renew this Agreement, or terminates Employee's
Employment for any reason other than permanent disability or cause (as defined
below), or if Hyperion was subject to a change in ownership and/or control (as
defined below) during the term of this Agreement and, within twelve (12) months
thereafter, Employee resigns for good reason, as defined below, then, for the
continuation period ("Continuation Period") specified above, following
Employee's termination, Hyperion shall pay Employee Employee's Base
Compensation, at the rate in effect at the time of the termination of Employment
in accordance with Hyperion's standard payroll procedures, and continue the
coverage of Employee, and Employee's dependents (if applicable), under the
health benefit plans in effect at the time of the termination. To the extent
that such plans or the insurance contracts or provider agreements associated
with such plans do not permit the extension of Employee's coverage following the
termination of Employee's active employment, Hyperion shall pay Employee cash in
an amount equal to the cost to Hyperion of the coverage that cannot be provided.
If Employee elects to continue Employee's health insurance coverage under the
Consolidated Omnibus Budget Reconciliation Act ("COBRA"), following Employee's
termination, then the date of the "qualifying event" for purposes of COBRA shall
be Employee's last day of active employment.

f. Termination for cause means:

      i.    Employee's failure to perform, in a satisfactory fashion, one or
      more reasonable and lawful duties assigned to Employee by Hyperion under
      this Agreement, if such failure continues for seven (7) days or more after
      Hyperion has given Employee written notice describing such failure and
      advising Employee of the consequences of such failure under this
      Agreement, provided that such notice shall be required only with respect
      to the first such failure;

      ii.   Employee's misconduct relating to Hyperion's affairs, if such
      misconduct continues for seven (7) days or more after Hyperion has given
      Employee written notice describing such misconduct and advising Employee
      of the consequences of such misconduct under this Agreement, provided that
      such notice shall be required only with respect to the first occurrence of
      such misconduct, provided further there shall be no requirement that the
      misconduct continue for seven (7) days or more with respect to acts for
      which an employee's employment is specifically terminable under Hyperion's
      policies and procedures applicable to all employees;

      iii.  Employee's conviction of, or a plea of guilty or no contest to, a
      felony, or a misdemeanor which calls into question Employee's honesty,
      under the laws of any country, including the United States, or any state
      thereof;

      iv.   any breach of this Agreement, the employee agreement, relating to
      confidential information and intellectual property rights, between
      Employee and Hyperion, or any other agreement between Employee and
      Hyperion;

      v.    threats or acts, of violence or harassment, directed at any present,
      former or prospective employee, independent contractor, vendor, customer
      or business partner of Hyperion; or

      vi.   fraud or embezzlement involving the assets of Hyperion or its
      affiliates, customers or suppliers.

The foregoing shall not be deemed an exclusive list of all acts or omissions
that Hyperion may consider as grounds for the termination of Employee's
Employment with cause. Termination for cause hereunder shall be deemed to be
termination for misconduct under Hyperion's stock option plans and related
agreements.

g.    A change in ownership and/or control means:

      i.    a change in ownership or control of Hyperion effected through either
            of the following actions:

            1/    the acquisition, directly or indirectly, by any person or
            related group of persons (other than Hyperion, or a person that
            directly or indirectly controls, is controlled by, or is under
            common control with, Hyperion), of beneficial ownership (within the
            meaning of Rule 13d-3 of the 1934 Act) of securities possessing more
            than fifty percent (50%) of the total combined voting power of
            Hyperion's outstanding securities pursuant to a tender or exchange
            offer made directly to Hyperion's stockholders which the Hyperion
            board of directors does not recommend such stockholders to accept;
            or

Executive Employment Agreement (v.10.0 7/04) - Hyperion Confidential

                                                                     Page 3 of 8
<PAGE>

            2/    a change in the composition of the board over a period of
            thirty-six (36) consecutive months, or less, such that a majority of
            board members ceases, by reason of one or more contested elections
            for board membership, to be comprised of individuals who either have
            been board members continuously since the beginning of such period,
            or have been elected or nominated for election as board members
            during such period by at least a majority of the board members who
            were still in office at the time the board approved such election or
            nomination; or

      ii.   either of the following stockholder-approved transactions to which
            Hyperion is a party:

            1/    a merger or consolidation in which securities possessing more
            than fifty percent (50%) of the total combined voting power of
            Hyperion's outstanding securities are transferred to a person, or
            persons or entity different from the persons or entities holding
            those securities immediately prior to such transaction; or

            2/    the sale, transfer or other disposition of all or
            substantially all of Hyperion's assets in complete liquidation or
            dissolution of Hyperion.

h.    Good reason means:

      i.    a change in Employee's position with Hyperion which materially
reduces Employee's level of responsibility in effect immediately prior to the
change of ownership and/or control;

      ii.   a reduction in Employee's level of compensation (including Base
Salary, benefits and participation in corporate-performance based bonus or
incentive programs) in effect immediately prior to the change of ownership
and/or control by more than fifteen percent (15%); or

      iii.  a relocation of Employee's place of employment prior to the change
of ownership and/or control by more than fifty (50) miles;

provided and only if such change, reduction or relocation is effected by
Hyperion without Employee's consent.

5.    EMPLOYEE'S COVENANTS

a.    From the Effective Date of this Agreement and continuing until the second
(2nd) anniversary of Employee's termination, Employee shall not interfere with
the business of Hyperion by, directly or indirectly, personally or through
others, soliciting or attempting to solicit, on Employee's own behalf or on
behalf of any other person or entity, the employment of any employee of
Hyperion, or any of Hyperion's affiliates. During this period, Employee shall
not encourage or induce, or take any action that has the effect of encouraging
or inducing, any employee of Hyperion, or any of Hyperion's corporate
affiliates, to terminate that employee's employment.

b.    For a period of one (1) year following Employee's termination, Employee
shall not hire, or assist any other person in hiring, any person who was an
employee of Hyperion on the date of Employee's termination, to work at
Employee's new place of employment in a position that reports either directly to
Employee, or to any other person who reports directly to Employee.

c.    The parties agree that information relating to the identities, key contact
personnel, preferences, needs and circumstances of Hyperion's customers are
trade secrets belonging to Hyperion that are, and necessarily will be, used by
Employee, during Employee's Employment, in the solicitation of business from
Hyperion's customers. As a result, from the Effective Date of this Agreement and
continuing until the second (2nd) anniversary of Employee's termination,
Employee shall not, directly or indirectly, personally or through others,
solicit, or attempt to solicit (on Employee's own behalf or on behalf of any
other person or entity), the business of any customer, or prospective customer,
of Hyperion, or of any of Hyperion's affiliates, for services or products
similar to those sold by Hyperion. Prospective customer means any person or
entity whom Employee was involved in contacting or soliciting to become a
customer during the six (6) month period prior to Employee's termination.

d.    Employee has entered into an employee agreement, relating to confidential
information and intellectual property rights, with Hyperion, which is
incorporated herein by reference, and survives the termination or expiration of
this Agreement. Given the nature of Employee's Position, the parties agree that
from Employee's termination until the third (3rd) anniversary of such date, it
would be practically impossible for Employee to work in a position similar to
Employee's Position with Hyperion, doing similar tasks involved with Employee's
Employment with Hyperion, for certain companies, including their subsidiaries
and affiliates, that provide services or products that are similar to those of
Hyperion, without disclosing Hyperion's trade secrets. A list of such companies,
which may be amended from time to time by written notice of Hyperion, is
attached hereto as Schedule A.

e.    The state of California has certain statutory and common law restrictions
on non-competition agreements between employers and employees, and it is not the
intent of Hyperion to violate or circumvent those restrictions. However, to the
extent that Employee resides and Employee's principal place of employment is
outside of the state of California, then during the period from the Effective
Date of this Agreement and continuing until the second (2nd) anniversary of
Employee's termination, Employee shall not, directly or indirectly (other than
on behalf of Hyperion or with Hyperion's prior written consent), engage in any
competitive business activity, as defined below, in any of the locations listed
in Schedule B, attached

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<PAGE>

hereto. If conditions of subsection 4.e apply, the foregoing two (2) year period
shall be reduced to one (1) year. Competitive business activity means:

      i.    engaging in, or managing or directing persons engaged in, any
      business in which Hyperion, or any of Hyperion's affiliates, is engaged at
      the time of Employee's termination, whether independently or as an
      employee, agent, consultant, advisor, independent contractor, proprietor,
      partner, officer, director or otherwise; or

      ii.   acquiring, having an ownership interest in, participating in the
      financing, operation, management or control of, any entity that derives
      more than fifteen percent (15%) of its gross revenues from any business in
      which Hyperion, or any of Hyperion's affiliates, is engaged at the time of
      Employee's termination, except for the ownership of one percent (1%), or
      less, of any entity whose securities are freely tradable on an established
      market.

f.    Commencing on Employee's termination and continuing thereafter, Employee
shall not directly or indirectly, personally or through others, disparage
Hyperion, or any of its predecessors, any of their products or services, any of
Hyperion's current or former officers, directors or employees, nor make or
solicit any comments, statements, or the like to the media, on the internet, or
to others that may be considered derogatory or detrimental to the good name or
business reputation of any of the foregoing parties and entities.

g.    Employee acknowledges and agrees that Employee's failure to perform any of
Employee's covenants in this section would cause irreparable injury to Hyperion,
and cause damages to Hyperion that would be difficult or impossible to ascertain
or quantify. Accordingly, without limiting any other remedies that may be
available with respect to any breach of this Agreement, Employee consents to the
entry of an injunction (without bond) to restrain any breach of this section.

h.    The covenants in this section shall survive any termination or expiration
of this Agreement, and the termination of Employee's Employment with Hyperion,
for any reason.

6.    GENERAL

a.    Hyperion may assign its rights under this Agreement to any entity that
assumes Hyperion's obligations hereunder in connection with any sale or transfer
of all or a substantial portion of Hyperion's assets to such entity, and such an
assignment shall be binding upon any successor (whether direct or indirect and
whether by purchase, lease, merger, consolidation, liquidation or otherwise) to
all or substantially all of Hyperion's business and/or assets. This Agreement
and all rights and obligations of Employee hereunder are personal to Employee
and may not be transferred or assigned by Employee at any time. However, subject
to the forgoing and where expressly permitted under this Agreement, all rights
of Employee hereunder shall inure to the benefit of, and be enforceable by,
Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.

b.    The validity, performance and construction of this Agreement shall be
governed by the laws of the State of California, USA (excluding its conflict of
laws provisions). Santa Clara County, California shall be the appropriate venue
and jurisdiction for the resolution of disputes hereunder.

c.    All notices or communications to be given under this Agreement shall be in
writing and shall be deemed delivered upon hand delivery, upon delivery by a
courier service, upon acknowledged facsimile communication, or three (3) days
after deposit in the United States mail, postage prepaid, by certified,
registered or first class mail. In the case of Employee, notices shall be
addressed to Employee at the home address provided by Employee, or which
Employee most recently communicated to Hyperion in writing, and in the case of
Hyperion, notices shall be addressed to its corporate headquarters and directed
to the attention of the general counsel.

d.    All payments made under this Agreement shall be subject to reduction to
reflect taxes or other charges required to be withheld by law.

e.    In the event that any provision of this Agreement is prohibited by any law
governing its construction, performance or enforcement, such provision shall be
ineffective to the extent of such prohibition without invalidating thereby any
of the remaining provisions of the Agreement. The captions of sections herein
are intended for convenience only, and the same shall not be interpretive of the
content of such section.

f.    In the event of any dispute or claim relating to or arising out of
Employee's employment relationship with Hyperion, this Agreement, or the
termination of Employee's employment with Hyperion, for any reason (including,
but not limited to, any claims of breach of contract, wrongful termination or
age, sex, race, national origin, disability or other discrimination or
harassment), the parties agree that all such disputes shall be fully, finally
and exclusively resolved by binding arbitration to the fullest extent permitted
by law. The arbitration will be conducted in accordance with the American
Arbitration Association's "National Rules for the Resolution of Employment
Disputes" then in effect. EMPLOYEE AND HYPERION HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO HAVE ANY AND ALL DISPUTES OR CLAIMS ADJUDICATED IN COURT OR BEFORE ANY
ADMINISTRATIVE AGENCY, OR TRIED IN COURT OR BEFORE ANY ADMINISTRATIVE AGENCY,
JUDGE OR JURY.

g.    The terms and conditions of this Agreement may not be superseded,
modified, or amended except in writing which states that it is such a
modification, signed by Employee and an authorized officer of Hyperion (other
than Employee). No

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                                                                     Page 5 of 8
<PAGE>

waiver by either party of any breach of, or of compliance with, any condition or
provision of this Agreement by the other party shall be considered a waiver of
any other condition or provision or of the same condition or provision at
another time.

h.    This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

i.    This Agreement, the Exhibit, any additional terms ("Additional Terms")
specified in the Exhibit, Schedules A and B, the employee agreement (relating to
confidential information and intellectual property rights), and the offer letter
with the Offer Letter Date, constitute the entire agreement between the parties
as to the subject matter hereof, and supersede and replace all prior or
contemporaneous agreements, written or oral, regarding such subject matter. In
the event of any conflict between the terms of these documents, the terms of
this Agreement, unless expressly provided herein, shall have precedence.

ACCEPTED AND AGREED:

HYPERION SOLUTIONS CORPORATION                        EMPLOYEE

By:   /s/ Henry R. Autry                              /s/ Jeffrey Rodek
--------------------------------------                -------------------------
signature of authorized representative                signature

Henry R. Autry                                        Jeffrey Rodek
-------------------------------------                 -------------------------
printed name                                          printed name

Director
-------------------------------------
title

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                                                                     Page 6 of 8
<PAGE>

                                                                 [HYPERION LOGO]

                         EXECUTIVE EMPLOYMENT AGREEMENT
                                   SCHEDULE A

Business Objects SA
Cognos, Inc.
Microsoft Corporation, Server Division
MicroStrategy Inc.
PeopleSoft, Inc.
SAP AG
Oracle Corporation, Applications Division
GEAC
Longview
Outlooksoft Corporation
Cartesis
SAS Institute Inc., Applications Division

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                                                                     Page 7 of 8
<PAGE>

                                                                 [HYPERION LOGO]

                         EXECUTIVE EMPLOYMENT AGREEMENT
                                   SCHEDULE B

<TABLE>
<S>                          <C>
Alabama                      North Carolina
Alaska                       North Dakota
Arizona                      Ohio
Arkansas                     Oklahoma
California                   Oregon
Colorado                     Pennsylvania
Connecticut                  Rhode Island
Delaware                     South Carolina
Florida                      South Dakota
Georgia                      Tennessee
Hawaii                       Texas
Idaho                        Utah
Illinois                     Vermont
Indiana                      Virginia
Iowa                         Washington
Kansas                       West Virginia
Kentucky                     Wisconsin
Louisiana                    Wyoming
Maine                        District of Columbia
Maryland                     Australia
Massachusetts                Brazil
Michigan                     Canada
Minnesota                    France
Mississippi                  Germany
Missouri                     Hong Kong
Montana                      Israel
Nebraska                     Japan
Nevada                       Mexico
New Hampshire                Netherlands
New Jersey                   Singapore
New Mexico                   United Kingdom
New York
</TABLE>

Executive Employment Agreement (v.10.0 7/04) - Hyperion Confidential

                                                                     Page 8 of 8

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