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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:
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SOCIAL SECURITY NUMBER:
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PARTICIPANT'S ADDRESS:
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TOTAL OPTION SHARES:
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EXERCISE PRICE PER SHARE:
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DATE OF GRANT:
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VESTING START DATE:
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EXPIRATION DATE:
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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
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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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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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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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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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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:
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(Signature)
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(Please print name) (Please print name)
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(Please print title)
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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.
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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:
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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:
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Signature of Participant
[SIGNATURE PAGE TO HNC SOFTWARE INC.
1998 STOCK OPTION PLAN STOCK OPTION EXERCISE AGREEMENT]