<PAGE> 1
As filed with the Securities and Exchange Commission on February 25, 1998
Registration No. 333-_____
- --------------------------------------------------------------------------------
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------
HNC SOFTWARE INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 33-0248788
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
5930 CORNERSTONE COURT WEST
SAN DIEGO, CALIFORNIA 92121-3728
(Address of Principal Executive Offices)
1998 STOCK OPTION PLAN
(Full Title of the Plan)
----------------
RAYMOND V. THOMAS
CHIEF FINANCIAL OFFICER
HNC SOFTWARE INC.
5930 CORNERSTONE COURT WEST
SAN DIEGO, CALIFORNIA 92121-3728
(619) 546-8877
(Name, Address and Telephone Number of Agent for Service)
----------------
Copies to:
KENNETH A. LINHARES, ESQ.
FENWICK & WEST LLP
TWO PALO ALTO SQUARE
PALO ALTO, CALIFORNIA 94306
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===============================================================================================================================
TITLE OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED OFFERING PRICE PER SHARE AGGREGATE OFFERING PRICE REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.001 par value 1,000,000(1) $32.375(2) $32,375,000(2) $9,550.63(3)
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===============================================================================================================================
</TABLE>
(1) Shares available for grant under Registrant's 1998 Stock Option Plan and
not yet subject to awarded outstanding stock options as of February 13,
1998.
(2) Estimated as of February 23, 1998 pursuant to Rule 457(c) and Rule 457(h)
solely for the purpose of calculating the registration fee.
(3) Fee calculated pursuant to Section 6(b) of the Securities Act of 1933, as
amended.
<PAGE> 2
HNC SOFTWARE INC.
REGISTRATION STATEMENT ON FORM S-8
PART II: INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission (the "Commission") are incorporated herein by reference:
(a) The Registrant's annual report on Form 10-K for the fiscal
year ended December 31, 1997, filed on February 17, 1998
pursuant to Section 13(a) of the Securities Exchange Act of
1934, as amended (the "Exchange Act").
(b) The description of the Registrant's Common Stock contained in
the Registrant's Registration Statement on Form 8-A filed with
the Commission under Section 12 of the Exchange Act on May 26,
1995, including any amendment or report filed for the purpose
of updating such description.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities registered hereby
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference herein and to be a part hereof from
the date of the filing of such documents.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the issuance of the shares of Common Stock offered
hereby will be passed upon for the Registrant by Fenwick & West LLP, Palo Alto,
California. Members of the firm of Fenwick & West LLP own an aggregate of
approximately 3,314 shares of Common Stock of the Registrant.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by Section 145 of the Delaware General Corporation Law,
the Registrant's Certificate of Incorporation includes a provision that
eliminates the personal liability of its directors to the Registrant or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability: (i) for any breach of the director's duty of loyalty to
the corporation or its stockholders; (ii) for acts or omissions not in good
faith or that involve intentional misconduct or a knowing violation of law;
(iii) under Section 174 of the Delaware General Corporation Law; or (iv) for any
transaction from which the director derived an improper personal benefit. In
addition, as permitted by Section 145 of the Delaware General Corporation Law,
the Bylaws of the Registrant provide that: (i) the Registrant is required to
indemnify its directors and officers, as well as directors and officers of any
other corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise when they are serving in such capacities at the request of the
Registrant, to the fullest extent permitted by the Delaware General Corporation
Law; (ii) the Registrant may, in its discretion, indemnify other officers,
employees and agents as set forth in the Delaware General Corporation Law; (iii)
upon receipt of an undertaking to repay such advances if indemnification is
determined to be unavailable, the Registrant is required to advance expenses, as
incurred, to its directors and officers to the fullest extent permitted by the
Delaware General Corporation Law in connection with a proceeding (except that
the Registrant is not required to advance expenses to a person against whom it
brings a claim for breach of the duty of loyalty, failure to act in good faith,
intentional misconduct, knowing violation of law or deriving an improper
personal
2
<PAGE> 3
benefit); (iv) the rights conferred in the Bylaws are not exclusive and the
Registrant is authorized to enter into indemnification agreements with its
directors, officers and employees and agents; (v) the Registrant may not
retroactively amend the Bylaw provisions in a way that adversely affects the
indemnification provided thereunder.
The Registrant's policy is to enter into indemnity agreements with each
of its directors and officers. The indemnity agreements provide that directors
and officers will be indemnified and held harmless against all expenses
(including attorneys' fees), judgments, fines, ERISA excise taxes or penalties
and settlement amounts paid or reasonably incurred by them in any action, suit
or proceeding, including any derivative action by or in the right of the
Registrant, on account of their services as a director or officer of the
Registrant or as directors or officers of any other corporation, partnership or
enterprise when they are serving in such capacities at the request of the
Registrant; except that no indemnity is provided in a derivative action in which
such director or officer is finally adjudged by a court to be liable to the
Company due to willful misconduct in the performance of his or her duty to the
Company, unless the court determines that such director or officer is entitled
to indemnification. The Registrant will not be obligated pursuant to the
agreements to indemnify or advance expenses to an indemnified party with respect
to proceedings or claims (i) initiated voluntarily by the indemnified party and
not by way of defense, except with respect to a proceeding authorized by the
Board of Directors and successful proceedings brought to enforce a right to
indemnification and/or advancement of expenses under the indemnity agreements;
(ii) for any amounts paid in settlement of a proceeding unless the Registrant
consents to such settlement; (iii) on account of any suit in which judgment is
rendered against the indemnified party for an accounting of profits made from
the purchase or sale by the indemnified party of securities of the Registrant
pursuant to the provisions of Section 16(b) of the Exchange Act and related laws
and regulations; (iv) on account of conduct by an indemnified party that is
finally adjudged to have been in bad faith or conduct that the indemnified party
did not reasonably believe to be in, or not opposed to, the best interests of
the Registrant; (v) on account of any criminal action or proceeding arising out
of conduct that the indemnified party had reasonable cause to believe was
unlawful; or (vi) if a final decision by a court having jurisdiction in the
matter shall determine that such indemnification is not lawful.
The indemnity agreement requires a director or officer to reimburse the
Registrant for expenses advanced only if and to the extent it is ultimately
determined that the director or executive officer is not entitled, under
Delaware law, the Registrant's Certificate of Incorporation, the Registrant's
Bylaws, his or her indemnity agreement or otherwise to be indemnified for such
expenses. The indemnity agreement provides that it is not exclusive of any
rights a director or executive officer may have under the Certificate of
Incorporation, the Bylaws, other agreements, any majority-in-interest vote of
the stockholders or vote of disinterested directors, Delaware law, or otherwise.
The indemnification provision in the Bylaws, and the indemnity
agreements entered into between the Registrant and its directors and officers,
may be sufficiently broad to permit indemnification of the Registrant's
directors and officers for liabilities arising under the Securities Act of 1933,
as amended (the "Securities Act").
The indemnity agreements require the Registrant to maintain director
and officer liability insurance to the extent readily available. The Registrant
currently carries a director and officer insurance policy.
ITEM 8. EXHIBITS.
4.01 HNC Software Inc. 1998 Stock Option Plan.
3
<PAGE> 4
4.02 Form of 1998 Stock Option Plan Stock Option Agreement
and Stock Option Exercise Agreement.
4.03 Registrant's Restated Certificate of Incorporation
filed with the Secretary of State of Delaware on June
13, 1996.(1)
4.04 Registrant's Bylaws, as amended.(1)
4.05 Form of specimen certificate for Registrant's Common
Stock.(2)
5.01 Opinion of Fenwick & West LLP.
23.01 Consent of Fenwick & West LLP (included in Exhibit
5.01).
23.02 Consent of Price Waterhouse LLP, Independent
Accountants.
24.01 Power of Attorney (see page 7 ).
- ----------
(1) Filed as Exhibit 3(i).04 (Restated Certificate of
Incorporation) and Exhibit 3(ii).05 (Bylaws) with the
Company's Report on Form 10-Q for the quarter ended June 30,
1996, as originally filed on August 13, 1996.
(2) Incorporated by reference from Exhibit 4.01 to the Company's
Registration Statement on Form S-1 (File No. 33-91932) filed
on May 5, 1995, and as subsequently amended.
ITEM 9. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or decrease in the volume
of securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a twenty percent (20%) change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or
4
<PAGE> 5
furnished to the Commission by the Registrant pursuant to Section 13 or Section
15(d) of the Exchange Act that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described in Item 6 hereof, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered hereby, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
5
<PAGE> 6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each individual whose signature
appears below constitutes and appoints Robert L. North and Raymond V. Thomas,
and each of them, his true and lawful attorneys-in-fact and agents with full
power of substitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement on Form S-8, and to file the same with all
exhibits thereto and all documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he or it might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or his or their substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Diego, State of California, on the 25th day
of February 1998.
HNC SOFTWARE INC.
By: /s/ Raymond V. Thomas
---------------------------------------------
Raymond V. Thomas
Vice President, Finance and Administration,
Chief Financial Officer and Secretary
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
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<S> <C> <C>
PRINCIPAL EXECUTIVE OFFICER:
/s/ Robert L. North
- --------------------------------- President, Chief Executive Officer February 25, 1998
Robert L. North and a Director
PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER:
/s/ Raymond V. Thomas
- --------------------------------- Vice President, Finance and Administration February 25, 1998
Raymond V. Thomas Chief Financial Officer and Secretary
ADDITIONAL DIRECTORS:
/s/ Edward K. Chandler
- --------------------------------- Director February 25, 1998
Edward K. Chandler
- --------------------------------- Director __________, 1998
Oliver D. Curme
- --------------------------------- Director __________, 1998
Thomas F. Farb
/s/ Charles H. Gaylord, Jr.
- --------------------------------- Director February 25, 1998
Charles H. Gaylord, Jr.
</TABLE>
6
<PAGE> 7
EXHIBIT INDEX
-------------
EXHIBIT
NUMBER EXHIBIT TITLE
- ------- -------------
4.01 HNC Software Inc. 1998 Stock Option Plan.
4.02 Form of 1998 Stock Option Plan Stock Option Agreement and Stock
Option Exercise Agreement.
4.03 Registrant's Restated Certificate of Incorporation filed with
the Secretary of State of Delaware on June 13, 1996.(1)
4.04 Registrant's Bylaws, as amended.(1)
4.05 Form of specimen certificate for Registrant's Common Stock.(2)
5.01 Opinion of Fenwick & West LLP.
23.01 Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02 Consent of Price Waterhouse LLP, Independent Accountants.
24.01 Power of Attorney (see page 7 ).
- ----------
(1) Filed as Exhibit 3(i).04 (Restated Certificate of Incorporation) and
Exhibit 3(ii).05 (Bylaws) with the Company's Report on Form 10-Q for the
quarter ended June 30, 1996, as originally filed on August 13, 1996.
(2) Incorporated by reference from Exhibit 4.01 to the Company's Registration
Statement on Form S-1 (File No. 33-91932) filed on May 5, 1995, and as
subsequently amended.
<PAGE> 1
EXHIBIT 4.01
HNC SOFTWARE INC.
1998 STOCK OPTION PLAN
As Adopted February 13, 1998
1. PURPOSE. The purpose of this Plan is to provide incentives to
attract, retain and motivate eligible persons whose present and potential
contributions are important to the success of the Company, its Parent,
Subsidiaries and Affiliates, by offering them an opportunity to participate in
the Company's future performance through awards of Options. Capitalized terms
not defined in the text are defined in Section 21.
2. SHARES SUBJECT TO THE PLAN.
2.1 Number of Shares Available. Subject to Sections 2.2 and 16,
the total number of Shares reserved and available for grant and issuance
pursuant to this Plan will be 1,000,000 Shares plus any Shares that are made
available for grant and issuance under this Plan pursuant to the following
sentence. Subject to Sections 2.2 and 16, Shares that are subject to issuance
upon exercise of an Option but cease to be subject to such Option for any reason
other than exercise of such Option will again be available for grant and
issuance in connection with future Options under this Plan. At all times the
Company shall reserve and keep available a sufficient number of Shares as shall
be required to satisfy the requirements of all outstanding Options granted under
this Plan.
2.2 Adjustment of Shares. In the event that the number of
outstanding Shares is changed by a stock dividend, recapitalization, stock
split, reverse stock split, subdivision, combination, reclassification or
similar change in the capital structure of the Company without consideration,
then the number of Shares reserved for issuance under this Plan and the Exercise
Prices of and number of Shares subject to outstanding Options will be
proportionately adjusted, subject to any required action by the Board or the
stockholders of the Company and compliance with applicable securities laws;
provided, however, that fractions of a Share will not be issued but will either
be replaced by a cash payment equal to the Fair Market Value of such fraction of
a Share or will be rounded up to the nearest whole Share, as determined by the
Committee.
3. ELIGIBILITY. All Options issued under the Plan shall be
nonqualified stock options. Options may be granted to employees, officers,
consultants, independent contractors and advisors of the Company or any Parent,
Subsidiary or Affiliate of the Company; provided that Options awarded to
officers of the Company or any Parent, Subsidiary or Affiliate of the Company
may not exceed 30% of all Options that are available for grant under the Plan
and provided further that such consultants, independent contractors and advisors
render bona fide services not in connection with the offer and sale of
securities in a capital-raising transaction. No person will be eligible to
receive more than 50,000 Shares in any calendar year under this Plan pursuant to
the grant of Options hereunder, other than new employees of the Company or of a
Parent, Subsidiary or Affiliate of the Company who are eligible to receive up to
a maximum of 75,000 Shares in the calendar year in which they commence their
employment. A person may be granted more than one Option under this Plan.
4. ADMINISTRATION.
4.1 Committee Authority. This Plan will be administered by the
Committee or by the Board acting as the Committee. Subject to the general
purposes, terms and conditions of this Plan, and to the direction of the Board,
the Committee will have full power to implement and carry out this Plan. Without
limitation, the Committee will have the authority to:
(a) construe and interpret this Plan, any Stock Option
Agreement and any other agreement or document executed
pursuant to this Plan;
<PAGE> 2
HNC Software Inc.
1998 Stock Option Plan
(b) prescribe, amend and rescind rules and regulations
relating to this Plan;
(c) select persons to receive Options;
(d) determine the form and terms of Options;
(e) determine the number of Shares or other consideration
subject to Options;
(f) determine whether Options will be granted singly, in
combination with, in tandem with, in replacement of, or as
alternatives to, other Options under this Plan or any other
incentive or compensation plan of the Company or any
Parent, Subsidiary or Affiliate of the Company;
(g) grant waivers of Plan or Option conditions;
(h) determine the vesting, exercisability and payment of
Options;
(i) correct any defect, supply any omission or reconcile any
inconsistency in this Plan, any Option or any Stock Option
Agreement;
(j) determine whether an Option has been earned; and
(k) make all other determinations necessary or advisable for
the administration of this Plan.
4.2 Committee Discretion. Any determination made by the
Committee with respect to any Option will be made in its sole discretion at the
time of grant of the Option or, unless in contravention of any express term of
this Plan or Option, at any later time, and such determination will be final and
binding on the Company and on all persons having an interest in any Option under
this Plan. The Committee may delegate to one or more officers of the Company the
authority to grant Options under this Plan.
5. OPTIONS. The Committee may grant Options to eligible persons and
will determine the number of Shares subject to the Option, the Exercise Price of
the Option, the period during which the Option may be exercised, and all other
terms and conditions of the Option, subject to the following:
5.1 Form of Option Grant. Each Option granted under this Plan
will be evidenced by a Stock Option Agreement, which will be in such form and
contain such provisions (which need not be the same for each Participant) as the
Committee may from time to time approve, and which will comply with and be
subject to the terms and conditions of this Plan.
5.2 Date of Grant. The date of grant of an Option will be the
date on which the Committee makes the determination to grant such Option, unless
otherwise specified by the Committee. The Stock Option Agreement and a copy of
this Plan will be delivered to the Participant within a reasonable time after
the granting of the Option.
5.3 Exercise Period. Options will be exercisable within the
times or upon the events determined by the Committee as set forth in the Stock
Option Agreement governing such Option; provided, however, that no Option will
be exercisable after the expiration of ten (10) years from the date the Option
is granted. The Committee also may provide for the exercise of Options to become
exercisable at one time or from time to time, periodically or otherwise, in such
number of Shares or percentage of Shares as the Committee determines.
5.4 Exercise Price. The Exercise Price of an Option will be
determined by the Committee when the Option is granted and may not be less than
100% of the Fair Market Value of the Shares on the date of grant. Payment for
the Shares purchased may be made in accordance with Section 6 of this Plan.
-2-
<PAGE> 3
HNC Software Inc.
1998 Stock Option Plan
5.5 Method of Exercise. Options may be exercised only by
delivery to the Company of a written stock option exercise agreement (the
"EXERCISE AGREEMENT") in a form approved by the Committee (which need not be the
same for each Participant), stating the number of Shares being purchased, the
restrictions imposed on the Shares purchased under such Exercise Agreement, if
any, and such representations and agreements regarding Participant's investment
intent and access to information and other matters, if any, as may be required
or desirable by the Company to comply with applicable securities laws, together
with payment in full of the Exercise Price for the number of Shares being
purchased.
5.6 Termination. Notwithstanding the exercise periods set forth
in the Stock Option Agreement, exercise of an Option will always be subject to
the following:
(a) If the Participant is Terminated for any reason except
death or Disability, then the Participant may exercise such
Participant's Options only to the extent that such Options
would have been exercisable upon the Termination Date no
later than three (3) months after the Termination Date (or
such shorter or longer time period not exceeding five (5)
years as may be determined by the Committee), but in any
event, no later than the expiration date of the Options.
(b) If the Participant is Terminated because of Participant's
death or Disability (or the Participant dies within three
(3) months after a Termination other than because of
Participant's death or disability), then Participant's
Options may be exercised only to the extent that such
Options would have been exercisable by Participant on the
Termination Date and must be exercised by Participant (or
Participant's legal representative or authorized assignee)
no later than twelve (12) months after the Termination Date
(or such shorter or longer time period not exceeding five
(5) years as may be determined by the Committee), but in
any event no later than the expiration date of the Options.
5.7 Limitations on Exercise. The Committee may specify a
reasonable minimum number of Shares that may be purchased on any exercise of an
Option, provided that such minimum number will not prevent Participant from
exercising the Option for the full number of Shares for which it is then
exercisable.
5.8 Modification, Extension or Renewal. The Committee may
modify, extend or renew outstanding Options and authorize the grant of new
Options in substitution therefor, provided that any such action may not, without
the written consent of a Participant, impair any of such Participant's rights
under any Option previously granted. The Committee may reduce the Exercise Price
of outstanding Options without the consent of Participants affected by a written
notice to them; provided, however, that the Exercise Price may not be reduced
below the minimum Exercise Price that would be permitted under Section 5.4 of
this Plan for Options granted on the date the action is taken to reduce the
Exercise Price.
6. PAYMENT FOR SHARE PURCHASES.
6.1 Payment. Payment for Shares purchased pursuant to this Plan
may be made in cash (by check) or, where expressly approved for the Participant
by the Committee and where permitted by law:
(a) by cancellation of indebtedness of the Company to the
Participant;
(b) by surrender of shares that either: (1) have been owned by
Participant for more than six (6) months and have been paid
for within the meaning of SEC Rule 144 (and, if such shares
were purchased from the Company by use of a promissory
note, such note has been fully paid with respect to such
shares); or (2) were obtained by Participant in the public
market;
(c) by tender of a full recourse promissory note having such
terms as may be approved by the Committee and bearing
interest at a rate sufficient to avoid imputation of income
under
-3-
<PAGE> 4
HNC Software Inc.
1998 Stock Option Plan
Sections 483 and 1274 of the Code; provided, however, that
Participants who are not employees of the Company will not
be entitled to purchase Shares with a promissory note
unless the note is adequately secured by collateral other
than the Shares; provided, further, that the portion of the
Exercise Price equal to the par value of the Shares, if
any, must be paid in cash;
(d) by waiver of compensation due or accrued to the Participant
for services rendered; provided, further, that the portion
of the Exercise Price equal to the par value of the Shares,
if any, must be paid in cash;
(e) provided that a public market for the Company's stock
exists:
(1) through a "same day sale" commitment from the
Participant and a broker-dealer that is a member of
the National Association of Securities Dealers (an
"NASD DEALER") whereby the Participant irrevocably
elects to exercise the Option and to sell a portion
of the Shares so purchased to pay for the Exercise
Price, and whereby the NASD Dealer irrevocably
commits upon receipt of such Shares to forward the
Exercise Price directly to the Company; or
(2) through a "margin" commitment from the Participant
and a NASD Dealer whereby the Participant
irrevocably elects to exercise the Option and to
pledge the Shares so purchased to the NASD Dealer in
a margin account as security for a loan from the
NASD Dealer in the amount of the Exercise Price, and
whereby the NASD Dealer irrevocably commits upon
receipt of such Shares to forward the Exercise Price
directly to the Company; or
(f) by any combination of the foregoing.
6.2 Loan Guarantees. The Committee may help the Participant pay
for Shares purchased under this Plan by authorizing a guarantee by the Company
of a third-party loan to the Participant.
7. WITHHOLDING TAXES.
7.1 Withholding Generally. Whenever Shares are to be issued in
satisfaction of Options granted under this Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Shares. Whenever, under this Plan, payments
in satisfaction of Options are to be made in cash, such payment will be net of
an amount sufficient to satisfy federal, state, and local withholding tax
requirements.
7.2 Stock Withholding. When, under applicable tax laws, a
Participant incurs tax liability in connection with the exercise or vesting of
any Option that is subject to tax withholding and the Participant is obligated
to pay the Company the amount required to be withheld, the Committee may allow
the Participant to satisfy the minimum withholding tax obligation by electing to
have the Company withhold from the Shares to be issued that number of Shares
having a Fair Market Value equal to the minimum amount required to be withheld,
determined on the date that the amount of tax to be withheld is to be
determined. All elections by a Participant to have Shares withheld for this
purpose will be made in writing in a form acceptable to the Committee.
8. PRIVILEGES OF STOCK OWNERSHIP.
8.1 Voting and Dividends. No Participant will have any of the
rights of a stockholder with respect to any Shares until the Shares are issued
to the Participant. After Shares are issued to the Participant, the Participant
will be a stockholder and have all the rights of a stockholder with respect to
such Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares;
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<PAGE> 5
HNC Software Inc.
1998 Stock Option Plan
provided, that the Participant will have no right to retain such stock dividends
or stock distributions with respect to Shares that are repurchased at the
Participant's original Exercise Price pursuant to Section 10.
8.2 Financial Statements. The Company will provide financial
statements to each Participant prior to such Participant's purchase of Shares
under this Plan, and to each Participant annually during the period such
Participant has Options outstanding; provided, however, the Company will not be
required to provide such financial statements to Participants whose services in
connection with the Company assure them access to equivalent information.
9. TRANSFERABILITY. Options granted under this Plan, and any
interest therein, will not be transferable or assignable by Participant, and may
not be made subject to execution, attachment or similar process, otherwise than
by will or by the laws of descent and distribution or as consistent with the
specific Plan and Stock Option Agreement provisions relating thereto. During the
lifetime of the Participant an Option will be exercisable only by the
Participant, and any elections with respect to an Option, may be made only by
the Participant.
10. RESTRICTIONS ON SHARES. At the discretion of the Committee, the
Company may reserve to itself and/or its assignee(s) in the Stock Option
Agreement a right to repurchase a portion of or all unvested Shares previously
received upon exercise of an Option and held by a Participant following such
Participant's Termination at any time within ninety (90) days after the later of
Participant's Termination Date and the date Participant purchases Shares under
this Plan, for cash and/or cancellation of purchase money indebtedness, at the
Participant's Exercise Price.
11. CERTIFICATES. All certificates for Shares or other securities
delivered under this Plan will be subject to such stock transfer orders, legends
and other restrictions as the Committee may deem necessary or advisable,
including restrictions under any applicable federal, state or foreign securities
law, or any rules, regulations and other requirements of the SEC or any stock
exchange or automated quotation system upon which the Shares may be listed or
quoted.
12. ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a
Participant's Shares, the Committee may require the Participant to deposit all
certificates representing Shares, together with stock powers or other
instruments of transfer approved by the Committee, appropriately endorsed in
blank, with the Company or an agent designated by the Company to hold in escrow
until such restrictions have lapsed or terminated, and the Committee may cause a
legend or legends referencing such restrictions to be placed on the
certificates. Any Participant who is permitted to execute a promissory note as
partial or full consideration for the purchase of Shares under this Plan will be
required to pledge and deposit with the Company all or part of the Shares so
purchased as collateral to secure the payment of Participant's obligation to the
Company under the promissory note; provided, however, that the Committee may
require or accept other or additional forms of collateral to secure the payment
of such obligation and, in any event, the Company will have full recourse
against the Participant under the promissory note notwithstanding any pledge of
the Participant's Shares or other collateral. In connection with any pledge of
the Shares, Participant will be required to execute and deliver a written pledge
agreement in such form as the Committee will from time to time approve. The
Shares purchased with the promissory note may be released from the pledge on a
pro rata basis as the promissory note is paid.
13. EXCHANGE AND BUYOUT OF OPTIONS. The Committee may, at any time
or from time to time, authorize the Company, with the consent of the respective
Participants, to issue new Options in exchange for the surrender and
cancellation of any or all outstanding Options. The Committee may at any time
buy from a Participant an Option previously granted with payment in cash, Shares
or other consideration, based on such terms and conditions as the Committee and
the Participant may agree.
14. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Option will
not be effective unless such Option is in compliance with all applicable federal
and state securities laws, rules and regulations of any governmental body, and
the requirements of any stock exchange or automated quotation system upon which
the Shares may then be listed or quoted, as they are in effect on the date of
grant of the Option and also
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HNC Software Inc.
1998 Stock Option Plan
on the date of exercise or other issuance. Notwithstanding any other provision
in this Plan, the Company will have no obligation to issue or deliver
certificates for Shares under this Plan prior to: (a) obtaining any approvals
from governmental agencies that the Company determines are necessary or
advisable; and/or (b) completion of any registration or other qualification of
such Shares under any state or federal law or ruling of any governmental body
that the Company determines to be necessary or advisable. The Company will be
under no obligation to register the Shares with the SEC or to effect compliance
with the registration, qualification or listing requirements of any state
securities laws, stock exchange or automated quotation system, and the Company
will have no liability for any inability or failure to do so.
15. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Option
granted under this Plan will confer or be deemed to confer on any Participant
any right to continue in the employ of, or to continue any other relationship
with, the Company or any Parent, Subsidiary or Affiliate of the Company or limit
in any way the right of the Company or any Parent, Subsidiary or Affiliate of
the Company to terminate Participant's employment or other relationship at any
time, with or without cause.
16. CORPORATE TRANSACTIONS.
16.1 Assumption or Replacement of Options by Successor. In the
event of (a) a dissolution or liquidation of the Company, (b) a merger or
consolidation in which the Company is not the surviving corporation (other than
a merger or consolidation with a wholly-owned subsidiary, a reincorporation of
the Company in a different jurisdiction, or other transaction in which there is
no substantial change in the stockholders of the Company or their relative stock
holdings and the Options granted under this Plan are assumed, converted or
replaced by the successor corporation, which assumption will be binding on all
Participants), (c) a merger in which the Company is the surviving corporation
but after which the stockholders of the Company (other than any stockholder
which merges (or which owns or controls another corporation which merges) with
the Company in such merger) cease to own their shares or other equity interests
in the Company, (d) the sale of substantially all of the assets of the Company,
or (e) any other transaction which qualifies as a "corporate transaction" under
Section 424(a) of the Code wherein the stockholders of the Company give up all
of their equity interest in the Company (except for the acquisition, sale or
transfer of all or substantially all of the outstanding shares of the Company
from or by the stockholders of the Company), any or all outstanding Options may
be assumed, converted or replaced by the successor corporation (if any), which
assumption, conversion or replacement will be binding on all Participants. In
the alternative, the successor corporation may substitute equivalent Options or
provide substantially similar consideration to Participants as was provided to
stockholders (after taking into account the existing provisions of the Options).
The successor corporation may also issue, in place of outstanding Shares of the
Company held by the Participant, substantially similar shares or other property
subject to repurchase restrictions no less favorable to the Participant. In the
event such successor corporation (if any) refuses to assume or substitute
Options, as provided above, pursuant to a transaction described in this
Subsection 16.1, such Options will expire on such transaction at such time and
on such conditions as the Board will determine.
16.2 Other Treatment of Options. Subject to any greater rights
granted to Participants under the foregoing provisions of this Section 16, in
the event of the occurrence of any transaction described in Section 16.1, any
outstanding Options will be treated as provided in the applicable agreement or
plan of merger, consolidation, dissolution, liquidation, sale of assets or other
"corporate transaction."
16.3 Assumption of Options by the Company. The Company, from
time to time, also may substitute or assume outstanding options granted by
another company, whether in connection with an acquisition of such other company
or otherwise, by either; (a) granting an Option under this Plan in substitution
of such other company's option; or (b) assuming such option as if it had been
granted under this Plan if the terms of such assumed option could be applied to
an Option granted under this Plan. Such substitution or assumption will be
permissible if the holder of the substituted or assumed option would have been
eligible to be granted an Option under this Plan if the other company had
applied the rules of this Plan to such grant. In the event the Company assumes
an option granted by another company, the terms and conditions of such option
will remain unchanged (except that the exercise price and the number and nature
of Shares issuable upon exercise of any such option will be adjusted
appropriately pursuant to Section 424(a) of the Code). In the event the Company
elects to grant a new
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<PAGE> 7
HNC Software Inc.
1998 Stock Option Plan
Option rather than assuming an existing option, such new Option may be granted
with a similarly adjusted Exercise Price.
17. ADOPTION AND EFFECTIVE DATE. This Plan will become effective on
the date that it is adopted by the Board (the "EFFECTIVE DATE").
18. TERM OF PLAN. Unless earlier terminated as provided herein,
this Plan will terminate ten (10) years from the Effective Date.
19. AMENDMENT OR TERMINATION OF PLAN. The Board may at any time
terminate or amend this Plan in any respect, including without limitation
amendment of any form of Stock Option Agreement or instrument to be executed
pursuant to this Plan; provided, however, that no amendments may be made to
outstanding Options without the consent of the Participant.
20. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of this Plan
by the Board nor any provision of this Plan will be construed as creating any
limitations on the power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including, without limitation, the
granting of stock options otherwise than under this Plan, and such arrangements
may be either generally applicable or applicable only in specific cases.
21. DEFINITIONS. As used in this Plan, the following terms will
have the following meanings:
"AFFILIATE" means any corporation that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is under
common control with, another corporation, where "control" (including the terms
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power to cause the direction of the management and policies of
the corporation, whether through the ownership of voting securities, by contract
or otherwise.
"BOARD" means the Board of Directors of the Company.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMITTEE" means the committee appointed by the Board to
administer this Plan, or if no such committee is appointed, the Board.
"COMPANY" means HNC Software Inc., a corporation organized under
the laws of the State of Delaware, or any successor corporation.
"DISABILITY" means a disability, whether temporary or permanent,
partial or total, within the meaning of Section 22(e)(3) of the Code, as
determined by the Committee.
"EXERCISE PRICE" means the price at which a holder of an Option
may purchase the Shares issuable upon exercise of the Option.
"FAIR MARKET VALUE" means, as of any date, the value of a share
of the Company's Common Stock determined as follows:
(a) if such Common Stock is then quoted on the Nasdaq National
Market, its closing price on the Nasdaq National Market on
the date of determination (if such day is a trading day) as
reported in The Wall Street Journal, and, if such date of
determination is not a trading day, then on the last
trading day prior to the date of determination;
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<PAGE> 8
HNC Software Inc.
1998 Stock Option Plan
(b) if such Common Stock is publicly traded and is then listed
on a national securities exchange, its closing price on the
last trading day prior to the date of determination on the
principal national securities exchange on which the Common
Stock is listed or admitted to trading as reported in The
Wall Street Journal;
(c) if such Common Stock is publicly traded but is not quoted on
the Nasdaq National Market nor listed or admitted to trading
on a national securities exchange, the average of the
closing bid and asked prices on the last trading day prior
to the date of determination as reported in The Wall Street
Journal; or
(d) if none of the foregoing is applicable, by the Committee in
good faith.
"OPTION" means an award of a nonqualified stock option to
purchase Shares pursuant to Section 5.
"PARENT" means any corporation (other than the Company) in
an unbroken chain of corporations ending with the Company, if at the time of the
granting of an Option under this Plan, each of such corporations other than the
Company owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain.
"PARTICIPANT" means a person who receives an Option under
this Plan.
"PLAN" means this HNC Software Inc. 1998 Stock Option Plan,
as amended from time to time.
"SEC" means the Securities and Exchange Commission.
"SHARES" means shares of the Company's Common Stock reserved
for issuance under this Plan, as adjusted pursuant to Sections 2 and 16, and any
successor security.
"STOCK OPTION AGREEMENT" means, with respect to each Option,
the signed written agreement between the Company and the Participant setting
forth the terms and conditions of the Option.
"SUBSIDIARY" means any corporation (other than the Company)
in an unbroken chain of corporations beginning with the Company if, at the time
of granting of the Option, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
"TERMINATION" or "TERMINATED" means, for purposes of this
Plan with respect to a Participant, that the Participant has for any reason
ceased to provide services as an employee, officer, consultant, independent
contractor or advisor to the Company or a Parent, Subsidiary or Affiliate of the
Company, except in the case of sick leave, military leave, or any other leave of
absence approved by the Committee, provided that such leave is for a period of
not more than ninety (90) days, or reinstatement upon the expiration of such
leave is guaranteed by contract or statute. The Committee will have sole
discretion to determine whether a Participant has ceased to provide services and
the effective date on which the Participant ceased to provide services (the
"TERMINATION DATE").
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<PAGE> 1
EXHIBIT 4.02
(PART I)
HNC SOFTWARE INC.
1998 STOCK OPTION PLAN
STOCK OPTION AGREEMENT
This Stock Option Agreement (this "AGREEMENT") is made and
entered into as of the date of grant set forth below (the "DATE OF GRANT") by
and between HNC Software Inc., a Delaware corporation (the "COMPANY"), and the
participant named below ("PARTICIPANT"). Capitalized terms not defined herein
shall have the meaning ascribed to them in the Company's 1998 Stock Option Plan
(the "PLAN").
PARTICIPANT:
----------------------------------
SOCIAL SECURITY NUMBER:
----------------------------------
PARTICIPANT'S ADDRESS:
----------------------------------
----------------------------------
TOTAL OPTION SHARES:
----------------------------------
EXERCISE PRICE PER SHARE:
----------------------------------
DATE OF GRANT:
----------------------------------
VESTING START DATE:
----------------------------------
EXPIRATION DATE:
----------------------------------
1. GRANT OF OPTION. The Company hereby grants to Participant a
nonqualified stock option (this "OPTION") to purchase up to the total number of
shares of Common Stock of the Company set forth above (collectively, the
"SHARES") at the Exercise Price Per Share set forth above (the "EXERCISE
PRICE"), subject to all of the terms and conditions of this Agreement and the
Plan.
2. VESTING; EXERCISE PERIOD.
2.1 Vesting of Right to Exercise Option. This Option shall
become exercisable as to portions of the Shares as follows: (a) this Option
shall not be exercisable with respect to any of the Shares until __________,
199__ (the "FIRST VESTING DATE"); (b) if Participant has continuously provided
services to the Company or any Subsidiary, Parent or Affiliate of the Company
from the Date of Grant through the First Vesting Date and has not been
Terminated on or before the First Vesting Date, then on the First Vesting Date
this Option shall become exercisable as to ____ percent (____%) of the Shares;
and (c) thereafter, so long as Participant continuously provides services to the
Company or any Subsidiary, Parent or Affiliate of the Company and is not
Terminated, on the first anniversary of the First Vesting Date and on each
<PAGE> 2
successive anniversary of the First Vesting Date thereafter, this Option shall
become exercisable as to an additional ____ percent (____%) of the Shares;
provided that this Option shall in no event ever become exercisable with respect
to more than 100% of the Shares.
2.2 Expiration. This Option shall expire on the Expiration
Date set forth above and must be exercised, if at all, on or before the earlier
of the Expiration Date or the date on which this Option is earlier terminated in
accordance with the provisions of Section 3.
3. TERMINATION.
3.1 Termination for Any Reason Except Death or Disability.
If Participant is Terminated for any reason, except Participant's death or
Disability, then this Option, to the extent (and only to the extent) that it
would have been exercisable by Participant on the date of Termination, may be
exercised by Participant no later than three (3) months after the date of
Termination (or seven (7) months after the date of Termination if the Company is
then subject to Section 16 of the Exchange Act and Participant's transactions in
securities of the Company were subject to Section 16(b) of the Exchange Act on
the date of Termination), but in any event no later than the Expiration Date.
3.2 Termination Because of Death or Disability. If
Participant is Terminated because of death or Disability of Participant, then
this Option, to the extent that it is exercisable by Participant on the date of
Termination, may be exercised by Participant (or Participant's legal
representative) no later than twelve (12) months after the date of Termination,
but in any event no later than the Expiration Date.
3.3 No Obligation to Employ. Nothing in the Plan or this
Agreement shall confer on Participant any right to continue in the employ of, or
other relationship with, the Company or any Parent, Subsidiary or Affiliate of
the Company, or limit in any way the right of the Company or any Parent,
Subsidiary or Affiliate of the Company to terminate Participant's employment or
other relationship at any time, with or without cause.
4. MANNER OF EXERCISE.
4.1 Stock Option Exercise Agreement. To exercise this
Option, Participant (or in the case of exercise after Participant's death,
Participant's executor, administrator, heir or legatee, as the case may be) must
deliver to the Company an executed stock option exercise agreement in the form
attached hereto as Exhibit A, or in such other form as may be approved by the
Company from time to time (the "EXERCISE AGREEMENT"), which shall set forth,
inter alia, Participant's election to exercise this Option, the number of Shares
being purchased, any restrictions imposed on the Shares and any representations,
warranties and agreements regarding Participant's investment intent and access
to information as may be required by the Company to comply with applicable
securities laws. If someone other than Participant exercises this Option, then
such person must submit documentation reasonably acceptable to the Company that
such person has the right to exercise this Option.
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<PAGE> 3
4.2 Limitations on Exercise. This Option may not be
exercised unless such exercise is in compliance with all applicable federal and
state securities laws, as they are in effect on the date of exercise. This
Option may not be exercised as to fewer than 100 Shares unless it is exercised
as to all Shares as to which this Option is then exercisable.
4.3 Payment. The Exercise Agreement shall be accompanied by
full payment of the Exercise Price for the Shares being purchased in cash (by
check), or where permitted by law:
(a) by cancellation of indebtedness of the Company to
the Participant;
(b) by surrender of shares of the Company's Common
Stock that either: (1) have been owned by
Participant for more than six (6) months and have
been paid for within the meaning of SEC Rule 144
(and, if such shares were purchased from the
Company by use of a promissory note, such note has
been fully paid with respect to such shares); or
(2) were obtained by Participant in the open
public market; and (3) are clear of all liens,
claims, encumbrances or security interests;
(c) by tender of a full recourse promissory note
having such terms as may be approved by the
Committee and bearing interest at a rate
sufficient to avoid imputation of income under
Sections 483 and 1274 of the Code; provided,
however, that Participants who are not employees
of the Company shall not be entitled to purchase
Shares with a promissory note unless the note is
adequately secured by collateral other than the
Shares; and provided further that the portion of
the Exercise Price equal to the par value of the
Shares, if any, must be paid in cash;
(d) by waiver of compensation due or accrued to
Participant for services rendered;
(e) provided that a public market for the Company's
stock exists: (1) through a "same day sale"
commitment from Participant and a broker-dealer
that is a member of the National Association of
Securities Dealers (an "NASD DEALER") whereby
Participant irrevocably elects to exercise this
Option and to sell a portion of the Shares so
purchased to pay for the exercise price and
whereby the NASD Dealer irrevocably commits upon
receipt of such Shares to forward the exercise
price directly to the Company; or (2) through a
"margin" commitment from Participant and a NASD
Dealer whereby
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<PAGE> 4
Participant irrevocably elects to exercise this
Option and to pledge the Shares so purchased to
the NASD Dealer in a margin account as security
for a loan from the NASD Dealer in the amount of
the exercise price, and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to
forward the exercise price directly to the
Company; or
(f) by any combination of the foregoing.
4.4 Tax Withholding. Prior to the issuance of the Shares upon
exercise of this Option, Participant must pay or provide for any applicable
federal or state withholding obligations of the Company. If the Committee
permits, Participant may provide for payment of withholding taxes upon exercise
of this Option by requesting that the Company retain Shares with a Fair Market
Value equal to the minimum amount of taxes required to be withheld. In such
case, the Company shall issue the net number of Shares to the Participant by
deducting the Shares retained from the Shares issuable upon exercise.
4.5 Issuance of Shares. Provided that the Exercise Agreement and
payment are in form and substance satisfactory to counsel for the Company, the
Company shall issue the Shares registered in the name of Participant,
Participant's authorized assignee, or Participant's legal representative, and
shall deliver certificates representing the Shares with the appropriate legends
affixed thereto.
5. COMPLIANCE WITH LAWS AND REGULATIONS. The exercise of this
Option and the issuance and transfer of Shares shall be subject to compliance by
the Company and Participant with all applicable requirements of federal and
state securities laws and with all applicable requirements of any stock exchange
on which the Company's Common Stock may be listed at the time of such issuance
or transfer. Participant understands that the Company is under no obligation to
register or qualify the Shares with the Securities and Exchange Commission, any
state securities commission or any stock exchange to effect such compliance.
6. NONTRANSFERABILITY OF OPTION. This Option may not be transferred
in any manner other than by will or by the laws of descent and distribution and
may be exercised during the lifetime of Participant only by Participant. The
terms of this Option shall be binding upon the executors, administrators,
successors and assigns of Participant.
7. TAX CONSEQUENCES. Set forth below is a brief summary as of the
Date of Grant of some of the federal and California tax consequences of exercise
of this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. PARTICIPANT
SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING THE OPTION OR DISPOSING OF THE
SHARES.
7.1 Exercise of Nonqualified Stock Option. There may be a
regular federal and California income tax liability upon the exercise of this
Option. Participant will be
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<PAGE> 5
treated as having received compensation income (taxable at ordinary income tax
rates) 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 will be required to
withhold from Participant's compensation or collect from Participant and pay to
the applicable taxing authorities an amount equal to a percentage of this
compensation income at the time of exercise.
7.2 Disposition of Shares. If the Shares are held for more than
twelve (12) months after the date of the transfer of the Shares pursuant to the
exercise of a nonqualified stock option, any gain realized on disposition of the
Shares will be treated as capital gain. The maximum federal capital gain tax
rates are twenty-eight percent (28%) for Shares held more than twelve (12)
months, but not more than eighteen (18) months, and twenty percent (20%) for
Shares held for more than eighteen (18) months.
8. PRIVILEGES OF STOCK OWNERSHIP. Participant shall not have any of
the rights of a shareholder with respect to any Shares until Participant
exercises this Option and pays the Exercise Price.
9. INTERPRETATION. Any dispute regarding the interpretation of this
Agreement shall be submitted by Participant or the Company to the Committee for
review. The resolution of such a dispute by the Committee shall be final and
binding on the Company and Participant.
10. ENTIRE AGREEMENT. The Plan is incorporated herein by reference.
This Agreement and the Plan and the Exercise Agreement constitute the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof and supersede all prior understandings and agreements with respect
to such subject matter.
11. NOTICES. Any notice required to be given or delivered to the
Company under the terms of this Agreement shall be in writing and addressed to
the Corporate Secretary of the Company at its principal corporate offices. Any
notice required to be given or delivered to Participant shall be in writing and
addressed to Participant at the address indicated above or to such other address
as such party may designate in writing from time to time to the Company. All
notices shall be deemed to have been given or delivered upon: personal delivery;
three (3) days after deposit in the United States mail by certified or
registered mail (return receipt requested); one (1) business day after deposit
with any return receipt express courier (prepaid); or one (1) business day after
transmission by rapifax or telecopier.
12. SUCCESSORS AND ASSIGNS. The Company may assign any of its
rights under this Agreement. This Agreement shall be binding upon and inure to
the benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer set forth herein, this Agreement shall be binding upon
Participant and Participant's heirs, executors, administrators, legal
representatives, successors and assigns.
13. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of California,
without regard to that body of law pertaining to choice of law or conflict of
law.
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<PAGE> 6
14. ACCEPTANCE. Participant hereby acknowledges receipt of a copy
of the Plan and this Agreement. Participant has read and understands the terms
and provisions thereof, and accepts this Option subject to all the terms and
conditions of the Plan and this Agreement. Participant acknowledges that there
may be adverse tax consequences upon exercise of this Option or disposition of
the Shares and that the Company has advised Participant to consult a tax advisor
prior to such exercise or disposition.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in duplicate by its duly authorized representative and Participant has
executed this Agreement in duplicate as of the Date of Grant.
HNC SOFTWARE INC. PARTICIPANT
By:
------------------------------ ---------------------------------
(Signature)
- --------------------------------- ---------------------------------
(Please print name) (Please print name)
- ---------------------------------
(Please print title)
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<PAGE> 7
EXHIBIT 4.02
(PART II)
EXHIBIT A
HNC SOFTWARE INC.
1998 STOCK OPTION PLAN (THE "PLAN")
STOCK OPTION EXERCISE AGREEMENT
I hereby elect to purchase the number of shares of Common Stock of HNC SOFTWARE
INC. (the "Company") as set forth below:
Participant _________________________ Number of Shares Purchased: _________
Social Security Number: _____________ Purchase Price per Share: ___________
Address: ____________________________ Aggregate Purchase Price: ___________
____________________________ Date of Option Agreement: ___________
Daytime Phone: ______________________ Exact Name of Title to Shares: ______
Facsimile Number: ___________________ _____________________________________
Type of Option: Nonqualified Stock Option ______________________________________
1. DELIVERY OF PURCHASE PRICE. Participant hereby delivers to the Company the
Aggregate Purchase Price, to the extent permitted in the Option Agreement (the
"Option Agreement") as follows (check as applicable and complete):
[ ] in cash (by check) in the amount of $__________________, receipt of
which is acknowledged by the Company;
[ ] by cancellation of indebtedness of the Company to Participant
in the amount of $ ______________________;
[ ] by delivery of ___________ fully-paid, nonassessable and vested shares
of the common stock of the Company owned by Participant for at least six
(6) months prior to the date hereof (and which have been paid for within
the meaning of SEC Rule 144), or obtained by Participant in the open
public market, and owned free and clear of all liens, claims,
encumbrances or security interests, valued at the current Fair Market
Value of $_________ per share;
[ ] by the waiver hereby of compensation due or accrued to Participant for
services rendered in the amount of $______________________ (except that
the par value of the Shares is tendered in cash (by check) receipt of
which is acknowledged by the Company);
[ ] through a "same-day-sale" or "cashless exercise" commitment, delivered
herewith, from Participant and the NASD Dealer ("Broker") named therein,
in the amount of $___________________ (please register the exercised
shares in the name of the broker listed in item 2 below); or
[ ] through a "margin" commitment, delivered herewith from Participant and
the Broker named therein, in the amount of $_____________________.
2. DELIVERY OF SHARES. Please complete the information requested below if
either of the following is applicable (if you are purchasing and
"holding" the shares and you do not complete the information requested
below, the shares will be delivered to you via a share certificate
mailed to your home address):
o You are purchasing your shares and wish to have the shares sent
electronically to your brokerage account. In such case, the shares
will be registered in the name of the Broker designated below.
o You elect to purchase the shares through a "same-day-sale" or
"cashless exercise" or "margin" commitment (the Broker will remit
the exercise price and applicable withholding taxes, if any,
directly to the Company).
Name of Broker: ___________________ Broker Phone: ___________________
Broker Account Number: ____________ Broker Fax: _____________________
3. MARKET STANDOFF AGREEMENT. Participant agrees in connection with any
registration of the Company's securities that, upon the request of the Company
or the underwriters managing any public offering of the Company's securities,
Participant will not sell or otherwise dispose of any shares without the prior
written consent of the Company or such underwriters, as the case may be, for a
period of time (not to exceed 180 days) from the effective date of such
registration as the Company or the underwriters may specify for employee
shareholders generally.
<PAGE> 8
4. TAX CONSEQUENCES. PARTICIPANT UNDERSTANDS THAT PARTICIPANT MAY SUFFER
ADVERSE TAX CONSEQUENCES AS A RESULT OF PARTICIPANT'S PURCHASE OR DISPOSITION OF
THE SHARES. PARTICIPANT REPRESENTS THAT PARTICIPANT HAS CONSULTED WITH ANY TAX
CONSULTANT(S) PARTICIPANT DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR
DISPOSITION OF THE SHARES AND THAT PARTICIPANT IS NOT RELYING ON THE COMPANY FOR
ANY TAX ADVICE.
5. ENTIRE AGREEMENT. The Plan and Option Agreement are incorporated
herein by reference. This Exercise Agreement, the Plan and the Option Agreement
constitute the entire agreement and understanding of the parties and supersede
in their entirety all prior understandings and agreements of the Company and
Participant with respect to the subject matter hereof, and are governed by
California law except for that body of law pertaining to choice of law or
conflict of law.
Date:
------------------------- ----------------------------------
Signature of Participant
This is to verify our receipt and acceptance of the attached Exercise Agreement
and our agreement to promptly issue and deliver the shares referred to above,
subject to our receipt of the Aggregate Purchase Price, and taxes due, if any.
The shares, when so issued will be fully paid and nonassessable.
HNC Software Inc.
Date:
------------------------- ----------------------------------
Signature of Participant
[SIGNATURE PAGE TO HNC SOFTWARE INC.
1998 STOCK OPTION PLAN STOCK OPTION EXERCISE AGREEMENT]
<PAGE> 1
EXHIBIT 5.01
OPINION OF FENWICK AND WEST LLP
February 25, 1998
HNC Software Inc.
5930 Cornerstone Court West
San Diego, California 92121-3728
Gentlemen/Ladies:
At your request, we have examined the Registration Statement on Form
S-8 (the "Registration Statement") to be filed by you with the Securities and
Exchange Commission (the "Commission") on or about February 25, 1998 in
connection with the registration under the Securities Act of 1933, as amended,
of 1,000,000 shares of the Common Stock, $0.001 par value (the "Common Stock")
of HNC Software Inc, a Delaware corporation (the "Company"), subject to issuance
by the Company under its 1998 Stock Option Plan (the "HNC 1998 Plan").
In rendering this opinion, we have examined the following:
(1) your registration statement on Form S-1 (File Number 33-91932)
filed with and declared effective by the Commission on June
20, 1995, together with the Exhibits filed as a part thereof;
(2) your registration statement on Form 8-A filed with the
Commission on May 26, 1995, together with the order of
effectiveness issued by the Commission therefor on June 20,
1995;
(3) the Registration Statement, together with the Exhibits filed
as a part thereof;
(4) the HNC 1998 Plan and related stock option grant and exercise
agreement forms;
(5) the Prospectus prepared in connection with the Registration
Statement;
(6) the Restated Certificate of Incorporation of the Company filed
with the Delaware Secretary of State on June 13, 1996 and the
Bylaws of the Company, both as filed by the Company with its
Report on Form 10-Q for the quarter ended June 30, 1996;
(7) the minutes of meetings and actions by written consent of the
stockholders and Board of Directors of the Company that are
contained in your minute books that are in our possession;
(8) the stock records for the Company that you have provided to us
(consisting of a list of stockholders issued by your transfer
agent, Boston EquiServe LLP and a list of all holders of
outstanding options and warrants to purchase the Company's
capital stock that was prepared by you and dated February 20,
1998); and
(9) a Management Certificate addressed to us and dated of even
date herewith executed by the Company containing certain
factual and other representations.
In our examination of documents for purposes of this opinion, we have
assumed, and express no opinion as to, the genuineness of all signatures on
original documents, the authenticity of all documents submitted to us as
originals, the conformity to originals of all documents submitted to us as
copies, the legal capacity of all natural persons executing the same, the lack
of any undisclosed terminations,
<PAGE> 2
modifications, waivers or amendments to any documents reviewed by us and the due
execution and delivery of all documents where due execution and delivery are
prerequisites to the effectiveness thereof.
As to matters of fact relevant to this opinion, we have relied solely
upon our examination of the documents referred to above and have assumed the
current accuracy and completeness of the information obtained from records
included in the documents referred to above. We have made no independent
investigation or other attempt to verify the accuracy of any of such information
or to determine the existence or non-existence of any other factual matters;
however, we are not aware of any facts that would lead us to believe that the
opinion expressed herein is not accurate.
Our opinion below is given on the assumption that the 1,000,000 shares
of Common Stock of the Company referred to in such paragraph may not be issued
and sold by the Company in accordance with the HNC 1998 Plan unless and until
such shares, at the time in question, are (i) explicitly reserved and available
for issuance under the HNC 1998 Plan or (ii) become issuable under the HNC 1998
Plan in the future by virtue of the terms of Section 2.1 of the HNC 1998 Plan,
which provide that certain shares issuable upon exercise of stock options
granted under the HNC 1998 Plan that expire or become unexercisable without
having been exercised become available again for grant and issuance under the
HNC 1998 Plan.
Based upon the foregoing, it is our opinion that:
The 1,000,000 shares of Common Stock that may be issued and sold by you
upon the exercise of stock options to be awarded under the HNC 1998 Plan, when
issued and sold in accordance with the HNC 1998 Plan and the stock option
agreements to be entered into thereunder, and in the manner referred to in the
Prospectus associated with the HNC 1998 Plan and the Registration Statement,
will be validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to all references to us, if any, in the
Registration Statement, the Prospectus constituting a part thereof and any
amendments thereto.
This opinion speaks only as of its date and is intended solely for your
use as an exhibit to the Registration Statement for the purpose of the above
issuance of securities referred to in the above opinion and is not to be relied
upon for any other purpose.
Very truly yours,
FENWICK & WEST LLP
<PAGE> 1
EXHIBIT 23.02
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated January 29, 1998, except as to Note 11
which is as of February 13, 1998, appearing on page 36 of HNC Software Inc.'s
Annual Report on Form 10-K for the year ended December 31, 1997. We also consent
to the incorporation by reference of our report on the Financial Statement
Schedule, which appears on page 62 of such Annual Report on Form 10-K. We also
consent to the reference to us under the heading "Selected Consolidated
Financial Data" in such Annual Report on Form 10-K. However, it should be noted
that Price Waterhouse LLP has not prepared or certified such "Selected
Consolidated Financial Data."
PRICE WATERHOUSE LLP
San Diego, California
February 25, 1998
