SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): MARCH 10, 2000
HNC SOFTWARE INC.
(Exact name of Registrant as Specified in its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
0-26146 33-0248788
(Commission File Number) (I.R.S. Employer Identification Number)
5935 CORNERSTONE COURT WEST, SAN DIEGO, CA 92121
(Address of Principal Executive Offices)
(858) 546-8877
(Registrant's Telephone Number, Including Area Code)
ITEM 2: ACQUISITION OR DISPOSITION OF ASSETS
On March 10, 2000, HNC Software Inc., a Delaware corporation ("HNC"
or the "Company"), acquired ownership of all the outstanding stock of ONYX
Technologies, Inc., a privately held Georgia corporation ("ONYX"), pursuant
to a statutory merger (the "Merger") in which FW2 Acquisition Corp. ("Merger
Sub"), a wholly-owned subsidiary of HNC formed for purposes of such Merger,
was merged with and into ONYX, with ONYX surviving the Merger and becoming a
wholly-owned subsidiary of HNC. The Merger was carried out pursuant to an
Agreement and Plan of Reorganization dated as of March 9, 2000 (the "Plan")
among HNC, Merger Sub and ONYX. HNC expects to account for the Merger as a
"purchase" transaction for accounting purposes.
ONYX is engaged in the business of providing real-time, scalable,
point-of-sale customer acquisition services that enable telecommunication
carriers, financial companies and retail companies to address credit
worthiness and identify deception and subscription fraud through an
application service provider (ASP) model. HNC's intention is to combine
ONYX's services with HNC's existing suite of proprietary analytical and
decision support services for customer risk assessment, acquisition and
retention.
Pursuant to the Merger, HNC issued to the three ONYX shareholders,
in exchange for all of ONYX's stock, a total of 351,925 shares of HNC Common
Stock and $1,500,000 in cash. Pursuant to the Plan, the Company, the ONYX
shareholders and an escrow agent entered into an Escrow Agreement, pursuant
to which 35,193 of the shares of HNC Common Stock that were issued to the
ONYX shareholders upon the closing of the Merger were placed in an escrow
account to secure and collateralize indemnification obligations of the ONYX
shareholders to HNC under the Representation and Indemnity Agreements entered
into by the shareholders with HNC and under the Plan (the "10% Escrow"). The
cash used or to be used to pay the Merger consideration to the ONYX
shareholders will be provided from the Company's working capital cash
reserves.
The shares of HNC Common Stock issued to the ONYX shareholders in
the Merger have not been registered under the Securities Act of 1933, as
amended (the "1933 Act"), in reliance upon the exemption from registration
provided by Section 4(2) thereof and/or Rule 506 of Regulation D under the
1933 Act. The Company and the ONYX Shareholders have entered into a
Registration Rights Agreement, pursuant to which HNC granted the ONYX
shareholders registration rights in connection with the resale of shares of
HNC Common Stock issued to them upon the effectiveness of the Merger (the
"Registrable Shares"). Under the agreement, HNC is to file a registration
statement on Form S-3 pursuant to Rule 415 under the 1933 Act covering the
resale by each of the ONYX shareholders, during a limited period beginning
upon the effectiveness of the registration statement, of up to 30,000 of the
shares that the shareholder received in the Merger.
Upon the Merger, all outstanding options to purchase shares of ONYX
Common Stock were automatically converted into options to purchase, in the
aggregate, 30,390 shares of HNC Common Stock (based on the number of shares
of ONYX Common Stock subject to the ONYX
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options multiplied by an exchange ratio of .0456995) on substantially the
same terms as the prior ONYX options, except that the exercise prices of the
new HNC options are equal to the exercise prices of the ONYX options divided
by the exchange ratio. HNC has agreed to file a registration statement on
Form S-8 under the 1933 Act for the issuance of shares of HNC Common Stock
upon the exercise of the options.
In connection with the Plan, the three former ONYX shareholders
entered into two-year employment agreements with HNC and four-year
noncompetition agreements. Each former ONYX shareholder entered into an
escrow agreement with HNC that provides for HNC to hold 20% of the shares
issued to the shareholder in the Merger in escrow as security for (i) the
payment of liquidated damages in the event that the shareholder's employment
with HNC is terminated during the two-year period of the employment agreement
by HNC for Cause (as defined) or by the employee for Good Reason (as
defined), (ii) damages arising out of a breach by employee of his
noncompetition agreement and (iii) in the event that the 10% Escrow is not
sufficient to cover the shareholder's indemnification obligations to HNC
under the Plan and the shareholder's Representation and Indemnity Agreement.
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
Not applicable.
(b) PRO FORMA FINANCIAL INFORMATION.
Not applicable.
(c) EXHIBITS.
The following exhibits are filed herewith:
2.01 Agreement and Plan of Reorganization dated as of March 9,
2000 among Registrant, ONYX Technologies, Inc. ("ONYX") and
FW2 Acquisition Corp. Pursuant to Item 601(b)(2) of Regulation
of S-K, certain schedules have been omitted but will be
furnished supplementally to the Commission upon request.
4.01 Registration Rights Agreement dated as of March 2000 among
Registrant and the former shareholders of ONYX.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HNC SOFTWARE INC.
By: /s/ Kenneth J. Saunders
Date: March 24, 2000 ----------------------------------
Kenneth J. Saunders,
Chief Financial Officer
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INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT
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2.01 Agreement and Plan of Reorganization dated as of March 9,
2000 among Registrant, ONYX Technologies, Inc. ("ONYX") and
FW2 Acquisition Corp. Pursuant to Item 601(b)(2) of Regulation
of S-K, schedules have been omitted but will be furnished
supplementally to the Commission upon request.
4.01 Registration Rights Agreement dated as of March 2000 among
Registrant and the former shareholders of ONYX.