Legal Proceedings

EX-10.59 13 a86033exv10w59.txt EXHIBIT 10.59 EXHIBIT 10.59 FAIR, ISAAC AND COMPANY, INCORPORATED NONSTATUTORY STOCK OPTION AGREEMENT NOVEMBER 16, 2001 FOR THOMAS GRUDNOWSKI NONSTATUTORY This option is not intended to qualify as an incentive stock STOCK OPTION option under Section 422 of the Internal Revenue Code. VESTING Your entire option vests and will be exercisable in full on the Vesting Date, as shown on the Notice of Grant of Stock Options and Options Agreement ("Option Agreement"). In addition, your entire option vests and will be exercisable in full in the event that: - Your service as an employee or director of Fair, Isaac (or any subsidiary) terminates because of your disability or death, or - Fair, Isaac is subject to a Change in Control while you are still an employee or director of Fair, Isaac (or any subsidiary). No additional shares become exercisable after your Fair, Isaac service has terminated for any reason. DEFINITIONS "Retirement" means that you are eligible for normal retirement or early retirement, as defined as follows: - "Normal Retirement Age" means age 65 - "Early Retirement" means age 55 and completed 10 Years of Service. One Year of Service is the completion of at least 1,000 hours of service during the year. "Disability" means that you are unable to engage in any substantial gainful activity by reason of a medically determinable, physical or mental impairment which can be expected to result in death or which has lasted (or can be expected to last) for a continuous period of not less than 12 months. "Change in control" shall be deemed to occur upon the occurrence of BOTH (A): i. The sale, lease conveyance or other disposition of all or substantially all of Fair, Isaac's assets as an entirety or substantially as an entirety to any person, entity or group of persons acting in concert; ii. Any "person" (as such term is used in Section 13(d) and 14(d) of the Securities and Exchange Act of 1934, as amended) becoming the "beneficial owner" (as defined in Rule 13d-3 under said Act), directly or indirectly of securities of Fair, Isaac representing 50% or more of the total voting power represented by Fair, Isaac's then outstanding voting securities; or iii. A merger or consolidation of Fair, Isaac with any other corporation, other than a merger or consolidation which would result in the voting securities of Fair, Isaac outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 50% of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; AND (B): i. A material adverse change in your position with Fair, Isaac which materially reduces your responsibility, without "cause" and without your written consent; ii. A material reduction in your compensation without your written consent; or iii. A relocation of your place of employment without your written consent. TERM Your option will expire in any event at the close of business at Fair, Isaac headquarters on the Expiration Date shown on the Option Agreement. (It will expire earlier if your Fair Isaac service terminates, as described below.) REGULAR TERMINATION If your service as an employee, director, consultant or advisor of Fair, Isaac (or any subsidiary) terminates for reasons other than retirement, disability or death, then your option will expire at the close of business at Fair, Isaac headquarters on the earlier of the expiration date stated in the Option Agreement or the 90th day after your termination date. Fair, Isaac determines when your service terminates for this purpose. RETIREMENT If you retire as an employee or director of Fair, Isaac (or any subsidiary), or your service as a non-employee director terminates for any reason, then your option will expire at the close of business at Fair, Isaac headquarters on the earlier of the expiration date stated in the Option Agreement or the date 12 months after the date of your retirement. During that 12-month period, you may exercise your option. Fair, Isaac determines your retirement date for this purpose. DISABILITY If you become disabled as an employee, director, consultant or advisor of Fair, Isaac (or any subsidiary), then your option will expire at the close of business at Fair, Isaac headquarters on the earlier of the expiration date stated in the Option Agreement or the date 12 months after the commencement of your disability. Fair, Isaac determines the commencement date of your disability for this purpose. DEATH If you die as an employee, director, consultant or advisor of Fair, Isaac (or any subsidiary), then your option will expire at the close of business at Fair, Isaac headquarters on the earlier of the expiration date stated in the Option Agreement or the date 12 months after the date of death. During that 12-month period, your estate, beneficiary or heirs may exercise your option. -2- LEAVES OF ABSENCE For purposes of this option, your service does not terminate when you go on a military leave, a sick leave or another bona fide leave of absence, if the leave was approved by Fair, Isaac in writing. But your service will be treated as terminating 90 days after you went on leave, unless your right to return to active work is guaranteed by law or by a contract. And your service terminates in any event when the approved leave ends, unless you immediately return to active work. Fair, Isaac determines which leaves count for this purpose. RESTRICTIONS ON EXERCISE You agree not to exercise this option if the issuance of shares at that time would violate any law or regulation, as determined by Fair, Isaac. Moreover, you cannot exercise this option unless you have returned a signed copy of the Option Agreement to Fair, Isaac. NOTICE OF EXERCISE When you wish to exercise this option, you must notify Fair, Isaac by filing the proper "Notice of Exercise" form at the address given on the form. The notice will be effective when it is received by Fair, Isaac. But if your notice was sent by facsimile transmission, it will be effective only if it is promptly confirmed by filing a form with an original signature. Your notice must specify how many shares you wish to purchase. Your notice must also specify how your shares should be registered (in your name only or in your and your spouse's names as community property or as joint tenants with right of survivorship). If someone else wants to exercise this option after your death, that person must prove to Fair, Isaac's satisfaction that he or she is entitled to do so. FORM OF PAYMENT When you submit your Notice of Exercise, you must include payment of the exercise price for the shares you are purchasing, as shown on the Option Agreement. Payment may be made in one (or a combination of two or more) of the following forms: - Your personal check, a cashier's check or a money order. - Irrevocable directions to a securities broker approved by Fair, Isaac to sell your option shares and to deliver all or a portion of the sale proceeds to Fair, Isaac in payment of the exercise price. (The balance of the sale proceeds, if any, will be delivered to you via your broker.) The directions must be given by signing a special "Notice of Exercise" form provided by Fair, Isaac. - Certificates for Fair, Isaac stock that you have owned for at least 12 months, along with any forms needed to effect a transfer of the shares to Fair, Isaac. The value of the shares, determined as of the effective date of the option exercise, will be applied to the exercise price. WITHHOLDING TAXES You will not be allowed to exercise this option unless you make acceptable arrangements to pay any withholding taxes that may be due as a result of the option exercise. These arrangements must be satisfactory to Fair, Isaac. You may direct Fair, Isaac to withhold shares with a market value equal to the withholding taxes due from -3- the shares to be issued as a result of your exercise. RESTRICTIONS ON RESALE By signing the Option Agreement, you agree not to sell any shares at a time when applicable laws or Fair, Isaac policies prohibit a sale. This restriction will apply as long as you are an employee or director of Fair, Isaac (or a subsidiary). TRANSFER OF OPTION Prior to your death, only you or a permitted assignee as defined herein may exercise this option (unless this option or a portion thereof has been transferred to your former spouse by a domestic relations order by a court of competent jurisdiction). You may transfer this option or a portion of this option by gift to members of your immediate family, a partnership consisting solely of you and/or members of your immediate family, or to a trust established for the benefit of you and/or members of your immediate family (including a charitable remainder trust whose income beneficiaries consist solely of such persons). For purposes of the foregoing, "immediate family" means your spouse, children or grandchildren, including step-children or step-grandchildren. Any of these persons is a "permitted assignee." However, such transfer shall not be effective until you have delivered to Fair, Isaac notice of such transfer. You cannot otherwise transfer or assign this option. For instance, you may not sell this option or use it as security for a loan. If you attempt to do any of these things, this option will immediately become invalid. You may, however, dispose of this option in your will or by a written beneficiary designation. Such a designation must be filed with Fair, Isaac on the proper form and will be recognized only if it is received at Fair, Isaac headquarters before your death. RETENTION RIGHTS Your option, the Option Agreement or the terms of this Agreement do not give you the right to be retained by Fair, Isaac (or any subsidiaries) in any capacity. Fair, Isaac (and any subsidiaries) reserve the right to terminate your service at any time, with or without cause. STOCKHOLDER RIGHTS You, or your estate, beneficiaries or heirs, have no rights as a stockholder of Fair, Isaac until a certificate for your option shares has been issued. No adjustments are made for dividends or other rights if the applicable record date occurs before your stock certificate is issued, except as described in the Plan. ADJUSTMENTS In the event of a stock split, a stock dividend or a similar change in Fair, Isaac stock, the number of shares covered by this option and the exercise price per share may be adjusted as Fair, Isaac may determine pursuant to the Plan. APPLICABLE LAW This Agreement will be interpreted and enforced under the laws of the State of Delaware (without regard to its rules on choice of law). -4- OTHER AGREEMENTS The Option Agreement and this Nonstatutory Stock Option Agreement constitute the entire understanding between you and Fair, Isaac regarding this option. Any prior agreements, commitments or negotiations concerning this option are superseded. This Agreement may be amended only in writing. BY SIGNING THE NOTICE OF GRANT AND STOCK OPTION AGREEMENT, YOU AGREE TO ALL OF THE TERMS AND CONDITIONS DESCRIBED ABOVE. -5-