-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IjVrbykSvpQD/XtonquDAuPsUogBakngYLk306/xe5fJgk2lD3K25QaW4+X2goCd t4YSshCWTPUHfydmQM0shw== /in/edgar/work/0001095811-00-003795/0001095811-00-003795.txt : 20001009 0001095811-00-003795.hdr.sgml : 20001009 ACCESSION NUMBER: 0001095811-00-003795 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000929 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20001006 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HNC SOFTWARE INC/DE CENTRAL INDEX KEY: 0000945093 STANDARD INDUSTRIAL CLASSIFICATION: [7372 ] IRS NUMBER: 330248788 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-26146 FILM NUMBER: 735887 BUSINESS ADDRESS: STREET 1: 5935 CORNERSTONE CT W CITY: SAN DIEGO STATE: CA ZIP: 92121-3728 BUSINESS PHONE: 8585468877 MAIL ADDRESS: STREET 1: 5935 CORNERSTONE CT WEST CITY: SAN DIEGO STATE: CA ZIP: 92121-3728 8-K 1 a66160e8-k.txt FORM 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549-1004 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): SEPTEMBER 29, 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, California 92121 -------------------------------------------------------- (Address of Principal Executive Offices) (858) 546-8877 -------------- (Registrant's Telephone Number, Including Area Code) 1 2 ITEM 5. OTHER EVENTS On October 2, 2000, HNC Software Inc. ("HNC") announced in a press release that it had completed the separation of Retek Inc. (Nasdaq: RETK) from HNC through the distribution of all of HNC's 40 million shares of Retek Inc. After the close of market on September 29, 2000, HNC shareholders who were record holders of HNC common shares on September 15, 2000 were distributed 1.243 shares of Retek Inc. common stock for each share of HNC common stock held on September 15, 2000. Cash will be issued in lieu of fractional shares. As a result of HNC's distribution of its shares of Retek Inc. common stock, Retek is no longer affiliated with HNC. The above-mentioned press release is attached as Exhibit 99.1 to this report on Form 8-K. On or about October 6, 2000, HNC issued a Tax Information Statement to its stockholders entitled "U.S. FEDERAL INCOME TAX INFORMATION FOR HNC SOFTWARE INC. SHAREHOLDERS". This Tax Information Statement contains a description of certain U.S. federal income tax implications of the spin-off of Retek from HNC; This Tax Information Statement is attached as Exhibit 99.2 to this report on Form 8-K. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits Exhibit 99.1 Press Release dated October 2, 2000. Exhibit 99.2 Tax Information Statement dated October 6, 2000. 2 3 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 hereunto duly authorized. Date: October 6, 2000 HNC SOFTWARE INC. By: /s/ Russell C. Clark ------------------------------------- Russell C. Clark, Vice President, Corporate Finance and Assistant Secretary 3 4 EXHIBIT INDEX
Exhibit Description Page ------- ----------- ---- 99.1 Press Release dated October 2, 2000. 99.2 Tax Information Statement dated October 6, 2000.
4 EX-99.1 2 a66160ex99-1.txt EXHIBIT 99.1 1 EXHIBIT 99.1 FOR MORE INFORMATION: INVESTORS: MEDIA: Heidi Flannery Melinda Bateman FiComm (for HNC) HNC Software Inc. 503.844.8888, x 111 858.799.3880 HNC SOFTWARE COMPLETES SEPARATION OF RETEK INC. SAN DIEGO, OCTOBER 2, 2000 -- HNC Software Inc. (Nasdaq: HNCS) announced today that it has completed the separation of Retek Inc. (Nasdaq: RETK) through the distribution of all of its 40 million shares of Retek Inc. After the close of market on September 29, 2000, HNC shareholders were issued 1.243 shares of Retek Inc. common stock for each share of HNC common stock held. Cash will be issued in lieu of fractional shares. As a result of HNC's distribution of its shares of Retek Inc. common stock, Retek is no longer affiliated with HNC. "Completing the separation of Retek is a significant milestone for HNC," said John Mutch, president and CEO of HNC Software. "We can now concentrate the company's resources on developing the strategic direction of the core business, leveraging our leadership in predictive analysis and decision management in the services industries." ABOUT HNC SOFTWARE INC. Headquartered in San Diego, California, HNC Software Inc. is a leading provider of predictive software solutions for service industries, including financial, insurance and telecommunications. HNC's suite of predictive software solutions can provide real-time insight into customer relationships based on transaction-level data, helping companies manage their relationships with individual customers. By accurately predicting customer behaviors, these companies can create initiatives to mitigate risk and attrition; improve customer service; 1 2 develop marketing programs to enhance profitability; and detect fraudulent customer transactions. For more information, visit HNC's Web site at www.hnc.com or contact Melinda Bateman, HNC Software Inc., 5935 Cornerstone Court West, San Diego, CA 92121, (858) 799-3880. ABOUT RETEK INC. Retek Inc. delivers high capacity, full function business infrastructure exclusively for the changing world of retail. Retek's solutions deliver improved decision-making capabilities and operational efficiencies by enabling supplier network orchestration, multi-channel selling, and retail CRM. Retek solutions are available on client platforms, through retail.com--Retek's Marketplace for the Retail Community--and via electronic exchanges operating Retek's Retail Server. Retek's customers include A&P, Ann Taylor, Brooks Brothers, Family Dollar Stores, Kohl's Department Stores, Selfridges, Eckerd Corp., The Home Shopping Network, Tesco, and Best Buy. For more information, visit Retek's Web site at www.retek.com or call 877.362.2532. Retek can be contacted in Europe at +44 20 7872 5795. 2 EX-99.2 3 a66160ex99-2.txt EXHIBIT 99.2 1 EXHIBIT 99.2 [HNC SOFTWARE LOGO] U.S. FEDERAL INCOME TAX INFORMATION FOR HNC SOFTWARE INC. SHAREHOLDERS October 6, 2000 DEAR HNC SOFTWARE INC. SHAREHOLDERS: On September 29, 2000, (the "DISTRIBUTION DATE"), HNC Software Inc. ("HNC") distributed all of the shares of the common stock of Retek Inc. ("RETEK") that were owned by HNC to the holders of record of the common stock of HNC (the "SPIN-OFF") on September 15, 2000 (the "RECORD DATE"). This letter contains information regarding: - the U.S. federal income tax implications of the spin-off of Retek from HNC; - the calculation of your U.S. federal income tax basis in your HNC shares that were outstanding on the Record Date and the Retek shares that were distributed on those HNC shares in the spin-off; and - the determination of your holding period in your Retek shares. Also included is: - a shareholder statement to be filed with your U.S. federal income tax return; and - a worksheet for calculating your U.S. federal income tax basis. TAX IMPLICATIONS In August 2000 HNC obtained from the Internal Revenue Service ("IRS") a private letter ruling (the "IRS LETTER RULING") stating that, except for fractional shares, HNC shareholders will incur no U.S. federal income tax liability due to the distribution of Retek common stock to them in the spin-off. However, the IRS requires that each taxpayer who received this tax-free distribution attach to their U.S. federal income return for the tax period including the September 29, 2000 Distribution Date, a statement containing the details of the transaction. To assist you in complying with this requirement, a shareholder statement is enclosed that 1 2 you can complete and attach to your U.S. federal income tax return for the period including September 29, 2000. For those shareholders who are calendar year taxpayers, the enclosed statement should be attached to your U.S. federal income tax return for 2000. The distribution of 1.243 shares of Retek common stock for every share of HNC common stock held on the Record Date may have entitled you to receive a fractional share of Retek common stock. However, fractional shares of Retek common stock were not distributed to HNC shareholders. The fractional shares have been distributed to an agent acting on behalf of the holders of HNC common stock entitled to receive fractional shares. The agent will accumulate such fractional shares, sell the shares, and distribute the cash proceeds from such sale (less any brokerage commissions, transfer taxes and other expenses of the sale) pro rata to the holders of HNC common stock who would otherwise have been entitled to receive the fractional shares of Retek common stock. The IRS Letter Ruling provides that the cash received by an HNC shareholder, in lieu of a fractional share of Retek common stock, should be treated as a sale by the shareholder of a fractional share of Retek common stock. In such case, the shareholder will recognize gain or loss for U.S. federal income tax purposes measured by the difference between the allocable tax basis of the fractional share (see tax basis computation discussed below) and the amount of cash received. Therefore, you should keep a record of the amount of cash you receive in lieu of receiving a fractional share of Retek common stock for purposes of completing your U.S. federal income tax return for the period including the Distribution Date. U.S. FEDERAL INCOME TAX BASIS The IRS Letter Ruling states that for U.S. federal income tax purposes that, except for gain resulting from the sale of a fractional share of Retek common stock, you should not recognize any gain or loss when you receive shares of Retek common stock due to the spin-off. However, as in any sale of stock, you must recognize any gain or loss you realize if you subsequently sell shares of HNC or Retek common stock. To determine your gain or loss from the sale of HNC or Retek common stock, you will need to know your tax basis. Enclosed is a worksheet that illustrates how to allocate the tax basis in the HNC common stock you held on the Record Date among such shares and the shares of Retek common stock distributed with respect to such HNC shares in the spin-off. To allocate the tax basis in your HNC common stock you will need to know: - the number of shares of HNC common stock you held on the Record Date; and - your total tax basis in those shares immediately prior to the spin-off. 2 3 Generally, the total tax basis of HNC common stock you purchased is equal to the total price you paid for those shares plus any commissions or other fees you paid. If you received any of your shares by gift, bequest or through a merger, reorganization, stock split, or similar corporate transaction, special rules apply for purposes of determining the tax basis of your shares that are beyond the scope of this letter. Please consult your tax advisor for additional guidance with respect to the determination of the tax basis of your shares of HNC common stock. As a result of the spin-off, you received 1.243 shares of Retek common stock for every share of HNC common stock you owned on the Record Date. U.S. federal income tax law requires that you allocate the tax basis of the HNC shares you owned on the Record Date between (i) those HNC shares, and (ii) the Retek shares received in the spin-off (including fractional shares sold on your behalf). This allocation depends on the ratio of the fair market values of the shares of HNC and Retek common stock. The enclosed tax basis worksheet explains this calculation and includes a sample allocation of tax basis between HNC and Retek shares. The percentages of tax basis to be allocated to shares of HNC and Retek common stock are based on the average of the high and low sale prices per share on the Nasdaq National Market on the Distribution Date. HOLDING PERIOD The IRS Letter Ruling addressed the appropriate manner to calculate the holding period of your Retek shares for federal income tax purposes if you hold your shares of HNC common stock as a capital asset. To determine your holding period, the IRS Letter Ruling provides that you add (i) the period you hold the shares of Retek common stock from the Distribution Date until you sell them and (ii) the previous period during which you held the shares of HNC common stock with respect to which you received the distribution of Retek common stock. For example, after receiving the Retek shares, assume you hold such Retek shares for three months after the Distribution Date before disposing of that Retek stock. If you held the shares of HNC common stock that entitled you to receive the shares of Retek common stock for ten months prior to the spin-off, you will be treated as having held the Retek shares for a total of thirteen months before the disposition. Since the holding period of the shares of Retek common stock in such a case would exceed one year, any gain or loss on the disposition would be long-term capital gain or loss if such stock had been held by you as a capital asset. THE INFORMATION REGARDING THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE SPIN-OFF PRESENTED IN THIS LETTER IS FOR GENERAL REFERENCE ONLY AND DOES NOT PURPORT TO COVER ALL U.S. FEDERAL INCOME TAX CONSEQUENCES THAT MAY APPLY TO ALL 3 4 CATEGORIES OF SHAREHOLDERS. ACCORDINGLY, ALL SHAREHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE PARTICULAR FEDERAL, FOREIGN, STATE, AND LOCAL TAX CONSEQUENCES OF THE SPIN-OFF TO THEM AND ANY PROPOSED CHANGES IN APPLICABLE LAW. HNC SOFTWARE INC. 4 5 SHAREHOLDER STATEMENT PURSUANT TO TREASURY REGULATION SECTION 1.355-5(b) Statement of shareholder receiving a distribution of stock in Retek Inc. (the controlled corporation) pursuant to Treasury Regulation Section 1.355-5(b). 1. The undersigned, a shareholder owning shares in HNC Software Inc. as of September 15, 2000, received a distribution of stock in the controlled corporation pursuant to Section 355 of the Internal Revenue Code. 2. The names and addresses of the corporations involved are as follows: (a) HNC Software Inc. (Parent) 5935 Cornerstone Court West San Diego, CA 92121 (b) Retek Inc. (Controlled Corporation) 801 Nicollet Mall, 11th Floor Minneapolis, MN 55402 3. The undersigned surrendered no stock or securities in HNC Software Inc. in connection with the distribution. 4. The undersigned received _______ shares (including fractional shares) of Retek Inc. in the distribution constituting only common shares in such corporation. 5. By letter dated August 1, 2000, the IRS ruled that the distribution by HNC Software Inc. of shares Retek Inc. should be a nontaxable Section 355 corporate separation. - -------------------------------------- Shareholder's Signature - -------------------------------------- Spouse's Signature (if stock held jointly) ATTACH TO YOUR U.S. FEDERAL INCOME TAX RETURN FOR THE TAX PERIOD INCLUDING SEPTEMBER 29, 2000. 5 6 U.S. FEDERAL INCOME TAX BASIS WORKSHEET (EXAMPLES ONLY)
Hypothetical Example ------------ 1. Number of HNC shares held. 100 2. Multiply line 1 by 1.243. Number of Retek shares you were entitled to receive. 124.3 3. Tax basis of pre-spin HNC shares. $10,000 4. Percentage of the tax basis allocated to your post-spin HNC shares (see the attached calculation). 20.92% 5. Percentage of the tax basis allocated to your Retek shares (see the attached calculation). 79.08% 6. Line 3 multiplied by line 4. THIS IS THE NEW TAX BASIS OF YOUR HNC SHARES POST SPIN-OFF. $2,092 7. Divide line 6 by line 1. This is the new tax basis per share of your HNC shares post spin-off. $20.92 8. Line 3 multiplied by line 5. This is the tax basis of the Retek shares you were entitled to receive in the spin-off. $7,908 9. Divide line 8 by line 2. This is the tax basis per share of the Retek shares you received in the spin-off. $63.62 10. Line 2 less number of whole shares of Retek distributed to you in the spin-off. This is the fractional share you were entitled to receive. 0.3 11. Line 9 multiplied by line 10. This is the tax basis of the Retek fractional share that is being sold for you. $19.09 12. Line 8 less line 11. THIS IS THE TAX BASIS OF THE RETEK SHARES THAT WERE DISTRIBUTED TO YOU IN THE SPIN-OFF $7,888.91
EXAMPLE OF CALCULATION OF PERCENTAGE OF TAX BASIS ALLOCABLE AMONG HNC AND RETEK SHARES
HNC Retek Total -------- -------- -------- 1. High stock price on Distribution Date (September 29, 2000) $ 82.25 $ 54.00 2. Low stock price on Distribution Date (September 29, 2000) $ 73.75 $ 45.25 3. Average of line 1 and line 2. Fair market value per share $ 78.00 $ 49.625 4. Exchange factor 1 1.243 5. Retek Line 3 multiplied by Retek line 4 N/A $ 61.68 6. HNC line 3 less Retek line 5 $ 16.32 N/A 7. Carry down HNC line 6 and Retek line 5 $ 16.32 $ 61.68 $ 78.00 8. Percentage of tax basis allocable among HNC and Retek shares (line 7 divided by total in line 7) 20.92% 79.08% 100.00%
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