8-KLeadership ChangesExhibits & Filings

FAIR ISAAC CORP 8-K Report, Executive Changes (Apr 25, 2012)

Filed April 25, 2012For Securities:FICO

Summary

Fair Isaac Corporation (FICO) announced significant leadership changes via an 8-K filing on April 25, 2012. The report details the intended departures of two key executives: Deborah Kerr, Executive Vice President and Chief Technology Officer, and Charles L. Ill, Executive Vice President of Sales, Services, and Marketing. Both executives have entered into transition agreements to ensure a smooth handover of their responsibilities. These agreements outline specific terms for their continued employment in consultative or transition capacities, compensation packages during this period, and severance benefits contingent upon meeting certain conditions, including the execution of releases and adherence to non-solicitation and non-disparagement clauses. Investors should note the financial implications of these agreements, including base salaries, potential incentive payments, and extended benefits, as these departures represent a notable shift in the company's senior management structure.

Key Highlights

  • 1Deborah Kerr, EVP and CTO, will transition out of her role and remain as a consultant until December 19, 2012.
  • 2Charles L. Ill, EVP of Sales, Services, and Marketing, will continue in his role until September 30, 2012, and then provide transition assistance until February 22, 2013.
  • 3Both executives have entered into Transition Agreements detailing their separation terms.
  • 4Ms. Kerr will receive a lump-sum payment equal to one year's base salary plus her FY2011 incentive, along with 12 months of COBRA benefits.
  • 5Mr. Ill will continue to receive his current base salary during his transition period and is eligible for FY2012 incentive payments.
  • 6Mr. Ill's potential separation benefits include a lump-sum payment based on salary and incentive, 12 months of COBRA, and potential acceleration of unvested equity upon a change of control event.
  • 7All executive agreements include provisions for release of claims, compliance with non-solicitation and non-disparagement, and cooperation in the transition.

Frequently Asked Questions

The 8-K filing states that both Deborah Kerr and Charles L. Ill 'intend to transition out of their respective roles'. The specific reasons for their departures are not detailed, but they have entered into transition agreements to manage the process.

The company will incur costs related to the transition agreements, including continued salary payments, potential incentive payouts, and severance packages for both executives. Specifically, Ms. Kerr is eligible for a lump-sum payment and benefits, while Mr. Ill is also eligible for specific severance benefits, including potential equity acceleration upon a change of control.

Ms. Kerr will remain employed in a consultative capacity until December 19, 2012, receiving a $100,000 annual base salary and no FY2012 incentive. Upon separation, if conditions are met, she will receive a lump sum payment (FY2011 base + incentive) and 12 months of COBRA continuation.

Mr. Ill will continue in his role until September 30, 2012, and provide transition assistance until February 22, 2013, receiving his current $550,000 base salary. He is eligible for FY2012 incentive payments. His separation package includes a lump sum payment and 12 months of life insurance continuation, with additional severance provisions tied to a change of control, including equity acceleration.