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EXHIBIT 2.02
AGREEMENT OF MERGER
OF
FW1 ACQUISITION CORP.
AND
COMPREVIEW, INC.
This Agreement of Merger (this "AGREEMENT") is entered into as of
November 28, 1997 (the "DATE OF THIS AGREEMENT") by and between FW1 Acquisition
Corp., a Delaware corporation ("SUB") that is a wholly-owned subsidiary of HNC
Software Inc. a Delaware corporation ("HNC"), and CompReview, Inc. (the
"COMPANY"), a California corporation.
R E C I T A L S
A. HNC, Sub and the Company have entered into an Agreement and Plan
of Reorganization, dated as of July 14, 1997 (the "PLAN"), providing for certain
representations, warranties and agreements in connection with the transactions
contemplated hereby, and for the merger of Sub with and into the Company in
accordance with the Delaware General Corporation Law (the "DELAWARE LAW") and
the General Corporation Law of California (the "CALIFORNIA LAW"), the Plan and
this Agreement, with the Company to be the surviving corporation of the Merger.
B. The Boards of Directors of HNC, Sub and the Company,
respectively, have determined it to be advisable and in the respective interests
of HNC, Sub and the Company and their respective stockholders that Sub be merged
with and into the Company in accordance with the Plan (the "MERGER") so that the
Company will be the surviving corporation of the Merger.
C. The Plan, this Agreement and the Merger have been approved by HNC
as the sole stockholder of Sub and by the stockholders of the Company in
accordance with applicable law.
NOW, THEREFORE, Sub and the Company hereby agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS
As used in this Agreement, the following terms will have the meanings
set forth below:
1.1 The "EFFECTIVE TIME" means the date on which the Merger becomes
legally effective under the laws of the States of California and Delaware as a
result of the filing with the Delaware Secretary of State of this Agreement or,
in lieu thereof, a Certificate of Merger (the "CERTIFICATE OF MERGER"),
conforming to the requirements of Section 252 of the Delaware General
Corporation Law, and the filing with the California Secretary of State of this
Agreement of Merger (and related officers' certificates).
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1.2 "HNC COMMON STOCK" means HNC's Common Stock, $0.001 par value per
share.
1.3 "HNC CLOSING AVERAGE PRICE PER SHARE" means the average of the
closing prices per share of HNC Common Stock as quoted on the Nasdaq National
Market (or such other exchange or quotation system on which HNC Common Stock is
then traded or quoted) and reported in The Wall Street Journal for the twenty
(20) trading days immediately preceding (but not including) the date of this
Agreement.
1.4 "COMPANY COMMON STOCK" means the Company's Common Stock, no par
value per share.
1.5 "COMPANY OPTIONS" means, collectively, options to purchase shares
of Company Common Stock granted by the Company to Company employees under the
Company's 1995 Stock Option Plan (the "COMPANY OPTION PLAN").
1.6 "COMPANY DERIVATIVE SECURITIES" means, collectively: (a) any
warrant, option, right or other security that entitles the holder thereof to
purchase or otherwise acquire any shares of the capital stock of the Company
(collectively, "COMPANY STOCK RIGHTS"); (b) any note, evidence of indebtedness,
stock or other security of the Company that is convertible into or exchangeable
for any shares of the capital stock of the Company or any Company Stock Rights
("COMPANY CONVERTIBLE SECURITY"); and (c) any warrant, option, right, note,
evidence of indebtedness, stock or other security that entitles the holder
thereof to purchase or otherwise acquire any Company Stock Rights or any Company
Convertible Security; provided, however, that the term "Company Derivative
Securities" does not include any Company Options.
1.7 "NUMBER OF COMPANY FULLY DILUTED SHARES" means that number of
shares of Company Common Stock that is equal to the sum of: (a) the total number
of shares of Company Common Stock that are issued and outstanding immediately
prior to the Effective Time; plus (b) the total number of shares of Company
Common Stock subject to or issuable under all Company Options that are issued
and outstanding immediately prior to the Effective Time; plus (c) the total
number of shares of Company Common Stock that, immediately prior to the
Effective Time, are, directly or indirectly, ultimately or potentially issuable
by the Company upon the exercise, conversion or exchange of all Company
Derivative Securities (if any) that are issued and outstanding immediately prior
to the Effective Time.
1.8 "COMPANY STOCKHOLDERS" means those persons who, immediately prior
to the Effective Time, hold the shares of Company stock that are outstanding
immediately prior to the Effective Time; provided, however, that for purposes of
Section 2.4 of this Agreement, the term "Company Stockholders" means only those
Company Stockholders (as defined above in this Section) who are issued shares of
HNC Common Stock in the Merger.
1.9 "COMPANY DISSENTING SHARES" means any shares of Company Stock
that (i) are outstanding immediately prior to the Effective Time and qualify
fully as "dissenting shares" within the meaning of Section 1300(b) of the
California Corporations Code and (ii) with respect to which dissenter's rights
to require the purchase of such dissenting shares for cash at their fair
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market value in accordance with Chapter 13 of the California Corporations Code
have been duly and properly exercised and perfected in connection with the
Merger.
1.10 "HNC MERGER SHARES" means that number of shares of HNC Common
Stock equal to the sum of (i) Five Million (5,000,000) shares of HNC Common
Stock, as presently constituted, plus (ii) the Additional Shares.
1.11 "ADDITIONAL SHARES" means that number of shares of HNC Common
Stock (as constituted immediately prior to the Effective Time) obtained by
dividing (i) the Retained Earnings (as defined below) by (ii) the HNC Closing
Average Price Per Share. As used herein, the "RETAINED EARNINGS" means the
retained earnings of the Company as of the last day of the last full calendar
month ended prior to the Effective Time, computed in accordance with generally
accepted accounting principles consistently applied.
1.12 "CONVERSION RATIO" means the quotient obtained by (a) dividing
the number of shares of HNC Common Stock constituting the HNC Merger Shares by
(b) the Number of Company Fully Diluted Shares.
ARTICLE 2
THE MERGER
2.1 The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time, Sub will be merged with and into the Company
pursuant to the Plan and this Agreement and in accordance with applicable
provisions of the laws of the State of California and the State of Delaware as
follows:
2.1.1 Conversion of Sub Stock. At the Effective Time, each share
of Common Stock of Sub that is issued and outstanding immediately prior to the
Effective Time shall, by virtue of the Merger and without the need for any
further action on the part of the holder thereof, be converted into and become
one (1) share of Company Common Stock that is issued and outstanding immediately
after the Effective Time, and the shares of Company Common Stock into which the
shares of Sub Common Stock are so converted shall be the only shares of Company
stock that are issued and outstanding immediately after the Effective Time.
2.1.2 Conversion of Company Stock. At the Effective Time, each
share of Company Common Stock that is issued and outstanding immediately prior
to the Effective Time (other than any Company Dissenting Shares as provided in
Section 2.1.3) will, by virtue of the Merger, and without the need for any
further action on the part of the holder thereof, be converted into a number of
shares of HNC Common Stock that is equal to the Conversion Ratio, subject to the
provisions of Section 2.1.4 regarding the elimination of fractional shares.
2.1.1 Company Dissenting Shares. Holders of Company Dissenting
Shares (if any) will be entitled to their appraisal rights under Chapter 13 of
the California Corporations Code with respect to such Company Dissenting Shares,
and such Company Dissenting Shares will not be converted into shares of HNC
Common Stock in the Merger; provided, however, that nothing in this Section
2.1.3 is intended to remove, release, waive, alter or affect any of the
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conditions to HNC's and Sub's obligations to consummate the Merger set forth in
Section 9.8 and Section 9.9 of the Plan, or any other provision of the Plan
relating to the Company Dissenting Shares. Shares of the capital stock of the
Company that are outstanding immediately prior to the Effective Time of the
Merger and with respect to which dissenting shareholders' rights of appraisal
under the California Corporations Code have not been properly perfected will,
when such dissenting shareholders' rights can no longer be legally exercised
under the California Corporations Code, be converted into HNC Common Stock as
provided in Section 2.1.2.
2.1.4 Fractional Shares. No fractional shares of HNC Common Stock
shall be issued in connection with the Merger. In lieu thereof, each holder of
Company Common Stock who would otherwise be entitled to receive a fraction of a
share of HNC Common Stock under Section 2.1.2 of this Agreement, after
aggregating all shares of HNC Common Stock to be received by such holder, shall
instead receive from HNC, within three (3) business days after the Effective
Time, an amount of cash equal to the product obtained by multiplying (i) the HNC
Closing Average Price Per Share (as adjusted to reflect any Capital Change (as
defined below) of HNC) by (ii) the fraction of a share of HNC Common Stock to
which such holder would otherwise be entitled to receive.
2.2 Assumption and Conversion of Company Options. Each Company Option
that is outstanding immediately prior to the Effective Time shall, by virtue of
the Merger and at the Effective Time and without the need for any further action
on the part of any holder thereof, be assumed by HNC and converted into an
option (an "HNC OPTION") to purchase that number of shares of HNC Common Stock
determined by multiplying the number of shares of Company Common Stock subject
to such Company Option immediately prior to the Effective Time by the Conversion
Ratio, at an exercise price per share of HNC Common Stock equal to the exercise
price per share of Company Common Stock that was in effect for such Company
Option immediately prior to the Effective Time divided by the Conversion Ratio;
provided, however, that if the foregoing calculation would result in an assumed
and converted Company Option being converted into an HNC Option that, after
aggregating all the shares of HNC Common Stock issuable upon the exercise of
such HNC Option, would be exercisable for a fraction of a share of HNC Common
Stock, then the number of shares of HNC Common Stock subject to such HNC Option
shall be rounded down to the nearest whole number of shares of HNC Common Stock.
The terms, exercisability, vesting schedule, status as an "incentive stock
option" under Section 422 of the Internal Revenue Code of 1986, as amended (if
applicable) or a nonqualified stock option, and all other terms and conditions
of each Company Option (including but not limited to the provisions of the
Company Option Plan that form part of the terms and conditions of such Company
Option) that is converted into an HNC Option in the Merger will (except as
otherwise provided in the terms of such Company Option), to the extent permitted
by law and otherwise reasonably practicable, be unchanged and continue in effect
after the Merger. Pre-Merger employment service with the Company will be
credited to each holder of a Company Option for purposes of applying any vesting
schedule contained in a Company Option to determine the number of shares of HNC
Common Stock that are exercisable under the HNC Option into which such Company
Option is converted in the Merger.
2.3 Adjustments for Capital Changes. Notwithstanding the provisions
of Section 2.1 or Section 2.2, if at any time prior to the Effective Time, HNC
recapitalizes, either through a
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subdivision (or stock split) of any of its outstanding shares into a greater
number of shares, or a combination (or reverse stock split) of any of its
outstanding shares into a lesser number of shares, or reorganizes, reclassifies
or otherwise changes its outstanding shares into the same or a different number
of shares of other classes (other than through a subdivision or combination of
shares provided for in the previous clause), or declares a dividend on its
outstanding shares payable in shares of HNC Common Stock or in shares or
securities convertible into shares of HNC Common Stock (each, a "CAPITAL
CHANGE"), then the HNC Closing Average Price Per Share, the number of shares of
HNC Common Stock constituting the HNC Merger Shares and the Conversion Ratio
will each be appropriately adjusted so as to maintain the proportionate
interests of the stockholders and optionholders of HNC and the Company in the
outstanding equity of HNC immediately following the Merger as contemplated by
this Agreement.
2.4 Escrow Agreement. HNC will withhold ten percent (10%) of the
shares of HNC Common Stock to be issued to Company Stockholders in the Merger
pursuant to Section 2.1.2, rounded down to the nearest whole number of shares to
be issued to each the Company Stockholder (the "ESCROW SHARES") and will deliver
certificates representing such Escrow Shares to State Street Bank and Trust
Company or a similar institution, as escrow agent (the "ESCROW AGENT"), together
with related stock transfer powers, to be held by the Escrow Agent as security
for the Company Stockholders' indemnification obligations under Section 11 of
the Plan and pursuant to the provisions of an escrow agreement entered into by
HNC, the Escrow Agent, the Company Stockholders and the representatives of the
Company Stockholders pursuant to the Plan (the "ESCROW AGREEMENT"). The Escrow
Shares will be represented by a certificate or certificates issued in the names
of the Company Stockholders in proportion to their respective interests therein
and will be held by the Escrow Agent during that time period specified in the
Escrow Agreement (the "ESCROW PERIOD").
2.5 Effects of the Merger. At and upon the Effective Time: (a) the
separate existence of Sub will cease and Sub will be merged with and into the
Company, and the Company will be the surviving corporation of the Merger (the
"SURVIVING CORPORATION") pursuant to the terms of this Agreement and the Plan;
(b) the Restated Articles of Incorporation of the Company shall be amended to
read as set forth in Exhibit A attached hereto and shall be the Articles of
Incorporation of the Surviving Corporation; (c) each share of Company stock that
is outstanding immediately prior to the Effective Time and each Company Option
that is outstanding immediately prior to the Effective Time shall be converted
into HNC Common Stock or an HNC Option, respectively, as provided in this
Section 2; (d) each share of Sub Common Stock that is outstanding immediately
prior to the Effective Time shall be converted into one (1) share of Company
Common Stock as provided in Section 2.1.1 hereof; and (e) the Merger shall, from
and after the Effective Time, have all of the effects provided by applicable
law.
ARTICLE 3
EXCHANGE OF CERTIFICATES
3.1 At or before the Effective Time, each holder of shares of Company
stock will surrender the certificate(s) for such shares (each a "COMPANY
CERTIFICATE"), duly endorsed to HNC for cancellation. Promptly after the
Effective Time and receipt of such Company Certificates, HNC or its transfer
agent will issue to each tendering holder of a Company
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Certificate a certificate for the number of shares of HNC Common Stock to which
such holder is entitled pursuant to Section 2.1.2 hereof (less the Escrow Shares
to be placed in escrow pursuant to Section 2.4 of the Plan and the Escrow
Agreement), and HNC or its transfer agent will pay by check to each tendering
holder cash in lieu of fractional shares in the amount payable to such holder in
accordance with Section 2.1.4 hereof. At the Closing (as defined in the Plan),
HNC will deliver the certificates representing the Escrow Shares to the Escrow
Agent pursuant to the Escrow Agreement.
3.2 No dividends or distributions payable to holders of record of HNC
Common Stock after the Effective Time, or cash payable in lieu of fractional
shares, will be paid to the holder of any unsurrendered the Company Certificate
until the holder of such unsurrendered the Company Certificate surrenders such
the Company Certificate to HNC as provided above. Subject to the effect, if any,
of applicable escheat and other laws, following surrender of any the Company
Certificate, there will be delivered to the person entitled thereto, without
interest, the amount of any dividends and distributions therefor paid with
respect to HNC Common Stock so withheld as of any date subsequent to the
Effective Time and prior to such date of delivery.
3.3 After the Effective Time, there will be no further registration
of transfers on the stock transfer books of the Company or its transfer agent of
the Company Stock that was outstanding immediately prior to the Effective Time.
If, after the Effective Time, the Company Certificates are presented for any
reason, they will be canceled and exchanged as provided in this Section 3.
3.4 Until the Company Certificates representing the Company stock
outstanding prior to the Merger are surrendered pursuant to Section 3.1 above,
such Company Certificates will be deemed, for all purposes, to evidence
ownership of the number of shares of HNC Common Stock into which the Company
Stock will have been converted pursuant to Section 2.1.2 of this Agreement.
ARTICLE 4
TERMINATION AND AMENDMENT
4.1 Agreement Subject to Termination by Mutual Consent.
Notwithstanding the approval of this Agreement by the stockholders of Sub and
the Company, this Agreement may be terminated at any time prior to the Effective
Time by the mutual written agreement of Sub and the Company.
4.2 Agreement Subject to Termination on Termination of Plan.
Notwithstanding the approval of this Agreement by the stockholders of Sub and
the Company, this Agreement will terminate forthwith in the event that the Plan
is terminated in accordance with its terms prior to the Effective Time.
4.3 Effect of Termination. In the event of the termination of this
Agreement as provided above, this Agreement will forthwith become void and there
will be no liability on the part of either Sub or the Company or their
respective officers and directors, except as otherwise provided in the Plan.
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4.4 Amendment. This Agreement may be amended by the parties hereto at
any time before or after approval by the stockholders of either Sub or the
Company, but, after such approval, no amendment will be made which by applicable
law requires the further approval of stockholders without obtaining such further
approval. This Agreement may not be amended except by an instrument in writing
signed on behalf of Sub and the Company.
ARTICLE 5
MISCELLANEOUS
5.1 Plan. The Plan and this Agreement are intended to be construed
together in order to effectuate their purposes.
5.2 Assignment; Binding Upon Successors and Assigns. Neither party
hereto may assign or delegate any of its rights or obligations under this
Agreement without the prior written consent of the other party hereto. This
Agreement will be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
5.3 Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of California (irrespective of
its choice of law principles).
5.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be an original as regards any party whose
signature appears thereon and all of which together will constitute one and the
same instrument.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement of
Merger to be duly executed as of the date and year first above written.
COMPREVIEW, INC. FW1 ACQUISITION CORP.
By:/s/ Xxxxxx X. Xxxxxx By:
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Xxxxxx X. Xxxxxx, M.D. Xxxxxx X. North
Chairman and Chief Executive President and Chief Executive
Officer Officer
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxxxx Xxxxxxx X. Xxxxxx
Secretary Chief Financial Officer and
Secretary
By: /s/ Xxxxxxxx XxXxxxx
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Xxxxxxxx XxXxxxx
President
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EXHIBIT A
RESTATED ARTICLES OF INCORPORATION
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RESTATED ARTICLES OF INCORPORATION
OF
COMPREVIEW, INC.
ARTICLE I
The name of the corporation is CompReview, Inc.
ARTICLE II
The purpose of the corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of California other than the banking business, the trust company business or
the practice of a profession permitted to be incorporated by the California
Corporations Code.
ARTICLE III
The liability of the directors of the corporation for monetary damages
shall be eliminated to the fullest extent permissible under California law.
Unless applicable law otherwise provides, any amendment, repeal or modification
of this Article III shall not adversely affect any right of any director under
this Article III that existed at or prior to the time of such amendment, repeal
or modification.
ARTICLE IV
The corporation is authorized to provide indemnification of agents (as
defined in Section 317 of the California Corporations Code) through bylaw
provisions, by agreements with agents, vote of shareholders or disinterested
directors or otherwise, in excess of the indemnification otherwise permitted by
Section 317 of the California Corporations Code, subject only to the applicable
limits on such excess indemnification set forth in Section 204 of the California
Corporations Code. Unless applicable law otherwise provides, any amendment,
repeal or modification of any provision of this Article IV shall not adversely
affect any contract or other right to indemnification of any agent of the
corporation that existed at or prior to the time of such amendment, repeal or
modification.
ARTICLE V
The corporation is authorized to issue only one class of shares of
stock, which shall be designated "Common Stock" and which shall have no par
value. The total number of shares of Common Stock the corporation is authorized
to issue is one hundred (100) shares.
