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Employment Agreement - HNC Software Inc. and John Mutch

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December 13, 1999

Mr. John Mutch

Dear John,

     On behalf of the Board of Directors of HNC Software Inc ("HNC"), we would
like to offer you the position of President and Chief Executive Officer of HNC,
effective as of January 15, 2000 (the "Commencement Date" ), subject to the
following terms and conditions:

     1. TITLE; SALARY. Effective as of the Commencement date of January 15,
2000, you will be employed as President and Chief Executive Officer of HNC. You
will report to the HNC Board of Directors. Your salary will be al the rate of
$400,000 annually, effective as of the Commencement Date.

     2. EMPLOYMENT TERM. The Term of your employment as President and Chief
Executive Officer under this Agreement (the "Employment Term") will commence on
the Commencement date and end on the first ( lst) anniversary of the
Commencement Date.

     3. BONUS. You will be eligible for a target bonus of up to a maximum of
$240,000 for fiscal year 2000, based on attainment of bonus objectives
determined by the HNC Board of Directors, to be paid in Q-l of 2001 based on
your performance against the agreed upon bonus objectives. It your employment
with HNC is Terminated due to a "Termination without Cause" (as defined m
Section 6(c) below) prior to the normal bonus payment date, you will receive the
pro rata portion of any bonus earned as of the date of termination (prorated
according to the portion of the Employment Term during which you remained
employed with HNC). Your rights to receive a bonus with respect to fiscal year
1999 will be governed by the terms of your employment agreement with HNC dated
as of October 13, 1999 appointing you HNC's President and Chief Operating
Officer (the "October 1999 Agreement").

     4. BENEFITS. You will be eligible to participate in HNC's employee benefit
plans of general application, including, without limitation, those plans
covering medical, disability and life insurance in accordance with the rules
established for individual participation in any such plan and under applicable
law. You will be eligible for vacation and sick leave in accordance with HNC
polices in effect during the term of this Agreement and will receive such other
benefits as HNC generally provides to its other employees of comparable position
and experience.

     5. OPTIONS. The Compensation Committee of The Board of Directors has
approved that you be granted an additional option to purchase up to 100,000
shares of the Company's common stock (the "New Option'), subject to the
execution of this Agreement and your executing a stock option grant agreement
consistent with the terms and conditions of the HNC option plan under which the
New Option is granted. The date of grant of the New Option will be the date on
which you execute and deliver this Agreement to HNC and the exercise price per
share of the New Option will be the fair market value of HNC's common stock on
the date of grant of the New Option as determined under such HNC option plan.
The right to exercise the New Option will vest in 48 equal monthly installments
beginning one month from the Commencement Date. Notwithstanding anything herein
to the contrary, the New Option will not vest (nor will there be any
acceleration of vesting) prior to the Commencement Date or unless and until you
in fact accept this offer and take office HNC's President and Chief and
Executive Officer as of the Commencement Date.

     6. AT-WILL EMPLOYMENT. Your employment with HNC will be at-will and may be
terminated by you or by HNC at any time for any reason as follows:


          (a) You may terminate your employment upon written notice to the Board
     of Directors at any time in your discretion ("Voluntary Termination");

          (b) HNC may terminate your employment upon written notice to you at
     any time following a determination by two thirds (2/3) vote of all members
     of HNC's Board of Directors (excluding yourself at the time you are a
     member of HNC's Board of Directors) that there is "Cause" as defined below,
     for such termination ("Termination for Cause");

          (c) HNC may terminate your employment upon written notice to you at
     any time in the sole discretion of the HNC Board of Directors without a
     determination that there is Cause for such Termination ("Termination
     without Cause").

          (d) Your employment will automatically Terminate upon your death or
     upon your Disability (as defined below) as determined by the Board of
     Directors ("Termination for Death or Disability")

For purposes of this agreement, the term"disability" shall mean your complete
inability to perform your job responsibilities for a period of 180 consecutive
days or 180 days in the aggregate in any 12-month period.

     For purposes of this agreement, "Cause" means (i) gross negligence or
willful misconduct in the performance of your duties to HNC (other than as a
result of a disability) that has resulted or is likely to result in substantial
and material damage to HNC, after a demand for substantial performance is
delivered to you by the Board of Directors which specifically identifies the
manner in which file Board believes you have not substantially performed your
duties and you have been provided with a reasonable opportunity to cure any
alleged gross negligence or willful misconduct; (ii) continued failure to
perform your duties to HNC as requested by the Board of Directors (other than as
a result of a disability); (iii) commission of any act of fraud with respect to
HNC; or (iv) conviction of a felony or a crime involving moral turpitude causing
material harm to the business and affairs of HNC. No act or failure to act by
you shall be considered "willful' if done or omitted by you in good faith with
reasonable belief that your action or omission was in tile best interests of

     7. SEPARATION BENEFITS. Upon termination of your employment with HNC for
any reason, you will receive payment for all salary and unpaid vacation accrued
to the date of your termination of employment. Your benefits will be continued
under HNC's then existing benefit plans and policies for so long as provided
under the terms of such plans and policies and as required by applicable law.
Subject to 7(f) below, under certain circumstances, you will also be entitled to
receive severance benefits as set forth below, but you will not be entitled to
any other compensation, award or damages with respect to your employment or

          (a) In the event of your Voluntary Termination or Termination for
     Cause, you will not be entitled to any cash severance benefits or
     additional vesting of shares of stock options.

          (b) Subject to your compliance with Section 8 below and the provisions
     of Section 7(f) below, in the event of your Termination without Cause: (i)
     you will be entitled to a severance payment equal to your annual salary
     prorated for the remainder of the Employment Term (less applicable
     deductions and withholdings) payable within thirty (30) days after the
     effective date of your Termination; and (ii) your New Option as described
     herein and the option to purchase up to 100,000 shares of HNC common stock
     that was granted to you as described in Section 5 of the October 1999
     Agreement (the "October 1999 Option") will accelerate and become 100%
     vested and exercisable. Any other options or restricted stock awards
     granted to


     you by HNC (Whether in the past or in the future) will not accelerate
     pursuant to this subsection but will continue to be governed by the terms
     of the stock option or restricted stock agreement and applicable HNC option

          (c) Subject to Section 7(f) below, in the event of your Termination
     for Death or Disability, the New Option and the October 1999 Option will
     accelerate and become 100% vested and exercisable. Any other options or
     restricted stock awards granted to you by HNC (whether in the past or in
     the future) will not accelerate pursuant to this subsection but will
     continue to be governed by the terms of the stock option or restricted
     stock agreement and the applicable HNC option plan.

          (d) If your severance and other benefits provided for in this Section
     7 constitute "parachute payments" within the meaning of Section 280G of the
     Internal Revenue Code and, but for this subsection, would be subject to the
     excise tax imposed by Section 4999 of the Internal Revenue Code, then your
     severance and other benefits under this Section 7 will be payable, at your
     election, either in full or in such lesser amount as would result, after
     taking into account the applicable federal state and local income taxes and
     the excise tax imposed by Section 4999, in your receipt on an after
     tax-basis of the greatest amount of severance and other benefits.

          (e) No payments due you hereunder shall be subject to mitigation or

          (f) Not withstanding anything in the preceding paragraphs of this
     Section 7 to the contrary, you hereby acknowledge and agree that, in the
     event of a termination of your Employment with HNC prior to the
     Commencement Date of January l5, 2000 for any reason, whatsoever (including
     without limitation any Voluntary Termination, Termination for Cause,
     Termination without Cause or Termination the Death or Disability): (i)
     effective upon such termination of your employment the New Option will
     immediately and automatically terminate, will not be or become exercisable
     and will not vest or accelerate; and (ii) in the case of a Termination
     without Cause, the severance payment referred to in clause (i) of Section
     7(b)will be based on your current annual salary rate of $325,000 per annum,
     rather than the new salary rate of $400,000 per annum that is to take
     effect upon the Commencement Date.

     8. RELEASE. You agree that the provisions of section 7(b) above will not
apply unless you (i) have executed a general release (in a form prescribed by
HNC) of all known and unknown claims that you may then have against HNC and/or
persons or entities affiliated with HNC and (ii) have agreed not to prosecute or
bring any legal action or other proceeding based upon any of such claims.

     9. GOVERNING LAW. This Agreement will be governed by the internal laws of
the State of California without reference to its conflict of laws provisions.

     10. ENTIRE AGREEMENT. This Agreement and your employee invention assignment
and confidentiality agreement with HNC contain the entire agreement and
understanding of the parties with respect to the subject mature hereof. This
Agreement will supersede in its entirety the October 1999 Agreement, EXCEPT THAT
the following provisions of the October 1999 Agreement will survive and continue
in effect to the extent provided below: (a) Section 2 (Title; Salary) shall
continue in effect until the Commencement Date; (b) Section 3 (Bonus) shall
survive and apply with regard to your bonus program for fiscal 1999; and (c)
Section 5 (Options) shall survive. Except as provided in this Agreement, no
other agreements, representations or understandings (whether oral or written and
whether expressed or implied) which are not expressly set forth in this
Agreement have been made or entered into by either party with respect to the
subject matter hereof.

     11. SUCCESSORS AND ASSIGNS. This Agreement will be binding upon you (and
your successors, heirs and assigns) and any successor (whether direct or
indirect and whether by


purchase, lease, merger, consolidation, liquidation or otherwise) to all or
substantially all of HNC's business and/or assets. For all purposes of this
Agreement, the term "HNC" shall include any successor to HNC's business and/or
asserts which becomes bound by this Agreement.

     We look forward to your continued contributions as part of the HNC team.

                                    Sincerely yours,

                                    By: Robert L North
                                    Chairman of the Board

By signing this letter, I am agreeing to the above.

Signature:   /s/ John Mutch                  Date: December 14,1999
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