8-KLeadership ChangesExhibits & Filings

FAIR ISAAC CORP 8-K Report, Executive Changes (Jan 20, 2010)

Filed January 20, 2010For Securities:FICO

Summary

Fair Isaac Corporation (FICO) has announced the appointment of Charles Ill as Executive Vice President, Sales and Marketing, effective February 1, 2010. This 8-K filing details the terms of his employment agreement, including his salary, bonus structure, and equity awards, which are designed to incentivize performance and retention. The agreement spans three years, concluding on January 31, 2013, and includes provisions for termination and change of control scenarios. Investors should note the comprehensive compensation package offered to Mr. Ill, which includes a signing bonus, a base salary of $500,000, a performance-based incentive award opportunity of up to 100% of his base salary (with a guaranteed minimum for fiscal year 2010), and significant equity awards. These equity awards include an initial option grant for 250,000 shares and potential restricted stock units (RSUs), subject to a four-year vesting schedule. The structure of these awards aims to align Mr. Ill's interests with those of the shareholders.

Key Highlights

  • 1Appointment of Charles Ill as Executive Vice President, Sales and Marketing, effective February 1, 2010.
  • 2Employment agreement with a term of three years, from February 1, 2010, to January 31, 2013.
  • 3Annual base salary of $500,000, with potential for upward adjustment.
  • 4Incentive award opportunity of 0% to 100% of base salary, with a target of 50%, and a guaranteed minimum of $167,667 for fiscal year 2010.
  • 5Initial stock option grant for 250,000 shares, with an exercise price equal to the fair market value on the grant date.
  • 6Eligibility to receive restricted stock units (RSUs) in lieu of up to half of the initial option award.
  • 7Provisions for severance pay and benefits in case of termination without Cause or resignation for Good Reason, with enhanced benefits in the event of a change of control.

Frequently Asked Questions

In his first year (Fiscal Year 2010), Mr. Ill is guaranteed a base salary of $500,000 and a minimum incentive bonus of $167,667, totaling $667,667. This excludes the potential for additional incentive bonus beyond the minimum and the value of his equity awards (stock options and potential RSUs).

Both the initial stock option award and any restricted stock units (RSUs) granted will be subject to four-year ratable vesting. This means that over a four-year period, portions of the awards will become exercisable or owned by Mr. Ill.

If Mr. Ill's employment is terminated by the Company without Cause or if he resigns for Good Reason within 12 months following a change of control event, all of his unvested stock options and restricted stock units will vest in full, subject to certain limitations outlined in the Management Agreement. Benefits may also apply if termination occurs within 90 days prior to a change of control if it can be demonstrated that the termination was in connection with or anticipation of the event.

If terminated without Cause or if he resigns for Good Reason (not in connection with a change of control), Mr. Ill is entitled to his then-current annual base salary plus the total incentive bonus paid in the preceding fiscal year (or his minimum guaranteed FY2010 bonus if applicable). He will also receive 12 months of continued company-paid health and life insurance benefits.