FAIR, ISAAC AND COMPANY, INCORPORATED
1999 Employee Stock Purchase Plan
EXHIBIT 10.2
FAIR, ISAAC AND COMPANY, INCORPORATED
1999 Employee Stock Purchase Plan
1. Purpose.................................................................1
2. Definitions.............................................................1
3 Eligibility.............................................................3
4. Offering Periods........................................................3
5. Participation...........................................................3
6 Payroll Deductions......................................................4
7. Grant of Options........................................................5
8. Exercise of Option......................................................5
9 Delivery of Shares; Participant Accounts................................5
10. Withdrawal of Payroll Deductions or Shares; Termination of Employment...6
11. Interest................................................................7
12. Stock...................................................................7
13. Administration..........................................................7
14. Designation of Beneficiary..............................................8
15. Transferability.........................................................8
16. Use of Funds............................................................8
17. Reports.................................................................9
18. Adjustments Upon Changes in Capitalization, Dissolution, Liquidation,
Merger or Asset Sale....................................................9
19. Amendment or Termination................................................9
20. Notices................................................................10
21. Conditions Upon Issuance of Shares.....................................10
22. Plan Effective Date and Stockholder Approval...........................10
(i)
FAIR, ISAAC AND COMPANY, INCORPORATED
1999 Employee Stock Purchase Plan
1. Purpose. The purpose of this 1999 Employee Stock Purchase Plan (the
"Plan") is to provide employees of Fair, Isaac and Company, Incorporated (the
"Company") and its Designated Subsidiaries with an opportunity to purchase Stock
of the Company through accumulated payroll deductions, enabling such persons to
acquire or increase a proprietary interest in the Company in order to strengthen
the mutuality of interests between such persons and the Company's stockholders.
It will also provide a benefit that will assist the Company in competing to
attract and retain employees of high quality. It is the intention of the Company
that the Plan qualify as an "employee stock purchase plan" under Section 423 of
the Code. Accordingly, the provisions of the Plan shall be construed in a manner
consistent with the requirements of that Section of the Code.
2. Definitions. For purposes of the Plan, the following terms shall be
defined as set forth below, in addition to such terms as defined in Section 1
hereof:
(a) "Account" means the account maintained on behalf of
the participant by the Custodian for the purpose of
investing in Stock and engaging in other transactions
permitted under the Plan.
(b) "Administrator" means the person or persons
designated to administer the Plan under Section
13(a).
(c) "Board" means the Company's Board of Directors.
(d) "Code" means the Internal Revenue Code of 1986, as
amended from time to time, including regulations
thereunder and successor provisions and regulations
thereto.
(e) "Committee" means the Compensation Committee of the
Company's Board of Directors.
(f) "Compensation" means all gross earnings and
commissions, including payments for overtime, shift
premium, incentive compensation, incentive payments,
bonuses and other cash compensation, but excluding
grants of options , restricted stock, stock
appreciation rights and payments for severance.
(g) "Custodian" means a custodian or any successor
thereto as appointed by the Board from time to time.
(h) "Designated Subsidiaries" means the Subsidiaries
which have been designated by the Board from time to
time in its sole discretion as eligible to have their
Employees participate in the Plan.
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(i) "Employee" means any individual who is a common law
employee of the Company or a Designated Subsidiary.
(j) "Enrollment Date" means the first day of the next
Offering Period.
(k) "Exercise Date" means the last day of each Offering
Period.
(l) "Fair Market Value" means the fair market value of a
share of Stock as determined by the Committee or
under procedures established by the Committee. Unless
otherwise determined by the Committee, the Fair
Market Value of Stock as of any given date shall be
the last trade price of a share of Stock reported on
a consolidated basis for securities listed on the New
York Stock Exchange for trades on the date as of
which such value is being determined or, if that day
is not a Trading Day, then on the latest previous
Trading Day.
(m) "Offering Period" means the approximately six-month
periods commencing (a) on the first Trading Day on or
after January 1 and terminating on the last Trading
Day in the following June, and (b) on the first
Trading Day on or after July 1 and terminating on the
last Trading Day in the following December. The
beginning and ending dates and duration of Offering
Periods may be changed pursuant to Section 4 of the
Plan.
(n) "Purchase Price" means an amount equal to 85% of the
Fair Market Value of a share of Stock on the
Enrollment Date or 85% of the Fair Market Value of a
share of Stock on the Exercise Date, whichever is
lower.
(o) "Reserves" means the number of shares of Stock
covered by all options under the Plan which have not
yet been exercised and the number of shares of Stock
which have been authorized for issuance under the
Plan but which have not yet become subject to
options.
(p) "Stock" means the Company's Common Stock, and such
other securities as may be substituted (or
resubstituted) for Stock pursuant to Section 18
hereof.
(q) "Subsidiary" means any corporation (other than the
Company) in an unbroken chain of corporations
beginning with the Company if each of the
corporations (other than the last corporation in the
unbroken chain) owns stock possessing 50% or more of
the total combined voting power of all classes of
stock in one of the other corporations in the chain.
(r) "Trading Day" means a day on which the New York Stock
Exchange is open for trading.
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3. Eligibility.
(a) All Employees (as determined in accordance with
Section 2(i) hereof) of the Company or a Designated
Subsidiary on a given Enrollment Date shall be
eligible to participate in the Plan.
(b) Any provisions of the Plan to the contrary
notwithstanding, no Employee shall be granted an
option under the Plan (i) to the extent that,
immediately after the grant, such Employee (or any
other person whose Stock would be attributed to such
Employee pursuant to Section 424(d) of the Code)
would own capital stock and/or hold outstanding
options to purchase such stock possessing 5% or more
of the total combined voting power or value of all
classes of the capital stock of the Company or of any
Subsidiary, or (ii) to the extent that his or her
rights to purchase stock under all employee stock
purchase plans of the Company and its Subsidiaries
accrue at a rate which exceeds $25,000 worth of stock
(determined at the fair market value of the shares at
the time such option is granted) for each calendar
year in which such option is outstanding at any time.
(c) All participants in the Plan shall have equal rights
and privileges (subject to the terms of the Plan)
with respect to options outstanding during any given
Offering Period.
4. Offering Periods. The Plan shall be implemented by consecutive
Offering Periods with a new Offering Period commencing on the first Trading Day
on or after January 1 and July 1 of each year following the initial Offering
Period, or on such other date as the Committee shall determine, and continuing
thereafter until terminated in accordance with Section 19 hereof. The Committee
shall have the power to change the beginning date, ending date, and duration of
Offering Periods with respect to future offerings without stockholder approval
if such change is announced at least five days prior to the scheduled beginning
of the first Offering Period to be affected thereafter, provided that Offering
Periods will in all cases comply with applicable limitations under Section
423(b)(7) of the Code.
5. Participation.
(a) Any person who will be an eligible Employee on a
given Enrollment Date may become a participant in the
Plan by completing a subscription agreement
authorizing payroll deductions and filing it with the
Administrator at least 15 days prior to such
Enrollment Date.
(b) Payroll deductions for a participant shall commence
on the first payroll following the Enrollment Date
and shall end on the last payroll in the Offering
Period to which such authorization is applicable,
unless sooner terminated by the participant as
provided in Section 10 hereof.
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6. Payroll Deductions.
(a) At the time a participant files his or her
subscription agreement, he or she shall elect to have
payroll deductions made on each pay day during the
Offering Period in an amount from 1% to 10% of the
Compensation which he or she receives for each pay
period during the Offering Period.
(b) All payroll deductions made for a participant shall
be credited to his or her Account under the Plan.
Payroll deductions shall be withheld in whole
percentages only, unless otherwise determined by the
Committee. A participant may not make any additional
payments into such Account.
(c) A participant may discontinue his or her
participation in the Plan as provided in Section 10
hereof, or may decrease the rate of his or her
payroll deductions during the Offering Period, by
completing and filing with the Administrator a new
subscription agreement authorizing a change in
payroll deduction rate. Unless otherwise authorized
by the Committee, a participant may not change his or
her payroll deduction rate more than once during any
Offering Period. The change in rate shall be
effective with the first payroll period following 10
business days after the Administrator's receipt of
the new subscription agreement unless the Company
elects to process a given change in participation
more quickly. A participant's subscription agreement
shall remain in effect for successive Offering
Periods unless terminated as provided in Section 10
hereof.
(d) The foregoing notwithstanding, to the extent
necessary to comply with Section 423(b)(8) of the
Code and Section 3(b) hereof, a participant's payroll
deductions may be terminated at such time during any
Offering Period which is scheduled to end during the
current calendar year (the "Current Offering Period")
that the aggregate of all payroll deductions
accumulated with respect to the Current Offering
Period equal $21,250 (or such other limit as may
apply under Code Section 423(b)(8)). Payroll
deductions shall recommence at the rate provided in
such participant's subscription agreement (as
previously on file or as changed prior to the
recommencement date in accordance with Section 6(c))
at the beginning of the next Offering Period which is
scheduled to end in the following calendar year,
unless terminated by the participant as provided in
Section 10 hereof.
(e) The Company or any Designated Subsidiary is
authorized to withhold from any payment to be made to
a participant, including any payroll and other
payments not related to the Plan, amounts of
withholding and other taxes due in connection with
any transaction under the Plan, including any
disposition of shares acquired under the Plan, and a
participant's enrollment in the Plan will be deemed
to constitute his or her consent to such withholding.
At the time of a participant's exercise of an option
or disposition of shares acquired under the Plan, the
Company may require the participant to make other
arrangements to meet tax withholding obligations as a
condition to exercise of rights or distribution of
shares or cash from the participant's Account. In
addition, a Participant may be required to advise the
Company of sales and other
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dispositions of Stock acquired under the Plan in
order to permit the Company to comply with tax laws
and to claim any tax deductions to which the Company
may be entitled with respect to the Plan.
7. Grant of Options. On the Enrollment Date of each Offering Period,
each eligible Employee participating in such Offering Period shall be granted an
option to purchase on the Exercise Date of such Offering Period, at the
applicable Purchase Price, up to a number of shares of Stock determined by
dividing such Employee's payroll deductions accumulated prior to such Exercise
Date and retained in the Participant's Account as of the Exercise Date by the
applicable Purchase Price; provided that such purchase shall be subject to the
limitations set forth in Sections 3(b) and 12 hereof. Exercise of the option
shall occur as provided in Section 8 hereof, unless the participant has
withdrawn pursuant to Section 10 hereof. To the extent not exercised, the option
shall expire on the last day of the Offering Period.
8. Exercise of Option. Participant's option for the purchase of shares
shall be exercised automatically on the Exercise Date, and the maximum number of
shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or her
account. Shares purchased shall include fractional shares calculated to at least
three decimal places, unless otherwise determined by the Committee. If
fractional shares are not to be purchased for a participant's Account, any
payroll deductions accumulated in a participant's account not sufficient to
purchase a full share shall be retained in the participant's account for the
subsequent Offering Period, subject to earlier withdrawal by the participant as
provided in Section 10 hereof. During a participant's lifetime, a participant's
option to purchase shares hereunder is exercisable only by him or her.
9. Delivery of Shares; Participant Accounts.
(a) At or as promptly as practicable after the Exercise
Date for an Offering Period, the Company will deliver
the shares of Stock purchased to the Custodian for
deposit into the participant's Account.
(b) Cash dividends on any Stock credited to a
participant's Account will be automatically
reinvested in additional shares of Stock; such
amounts will not be available in the form of cash to
participants. All cash dividends paid on Stock
credited to participants' Accounts will be paid over
by the Company to the Custodian at the dividend
payment date. The Custodian will aggregate all
purchases of Stock in connection with the Plan for a
given dividend payment date. Purchases of Stock for
purposes of dividend reinvestment will be made as
promptly as practicable (but not more than 30 days)
after a dividend payment date. The Custodian will
make such purchases, as directed by the Committee,
either (i) in transactions on any securities exchange
upon which Stock is traded, otherwise in the
over-the-counter market, or in negotiated
transactions, or (ii) directly from the Company at
100% of the Fair Market Value of a share of Stock on
the dividend payment date. Any shares of Stock
distributed as a dividend or distribution in respect
of shares of Stock or in connection with a split of
the Stock credited to a participant's Account will be
credited to such Account. In the event of any other
non-cash dividend or distribution in respect of Stock
credited to a participant's Account, the Custodian
will, if reasonably practicable and at the direction
of the Committee, sell any property received in
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such dividend or distribution as promptly as
practicable and use the proceeds to purchase
additional shares of Common Stock in the same manner
as cash paid over to the Custodian for purposes of
dividend reinvestment.
(c) Each participant will be entitled to vote the number
of shares of Stock credited to his or her Account
(including any fractional shares credited to such
Account) on any matter as to which the approval of
the Company's stockholders is sought. If a
participant does not vote or grant a valid proxy with
respect to shares credited to his or her Account,
such shares will be voted by the Custodian in
accordance with any stock exchange or other rules
governing the Custodian in the voting of shares held
for customer accounts. Similar procedures will apply
in the case of any consent solicitation of Company
stockholders.
10. Withdrawal of Payroll Deductions or Shares; Termination of
Employment.
(a) If a participant decreases his or her payroll
deduction rate to zero during an Offering Period,
payroll deductions shall not resume at the beginning
of the succeeding Offering Period unless the
participant delivers to the Administrator a new
subscription agreement.
(b) Upon a participant's ceasing to be an Employee for
any reason (including upon the participant's death),
he or she shall be deemed to have elected to withdraw
from the Plan and the payroll deductions credited to
such participant's Account during the Offering Period
but not yet used to exercise the option shall be
returned to such participant or, in the case of his
or her death, to the person or persons entitled
thereto under Section 14 hereof, and such
participant's option shall be automatically
terminated.
(c) Following the completion of two years from the first
day of an Offering Period, a participant may elect to
withdraw shares of Stock acquired during such
Offering Period from his or her Account in
certificated form or to transfer such shares from his
or her Account to an account of the participant
maintained with a broker-dealer or financial
institution. During the first two years from the
first day of the Offering Period, all sales and
transfers shall only be effectuated by the Custodian
on the participant's behalf. If a participant elects
to withdraw shares, one or more certificates for
whole shares shall be issued in the name of, and
delivered to, the participant, with such participant
receiving cash in lieu of fractional shares based on
the Fair Market Value of a share of Stock on the date
of withdrawal. If shares of Stock are transferred
from a participant's Account to a broker-dealer or
financial institution that maintains an account for
the participant, only whole shares shall be
transferred and cash in lieu of any fractional share
shall be paid to such participant based on the Fair
Market Value of a share of Stock on the date of
transfer. A Participant seeking to withdraw or
transfer shares of Stock must give instructions to
the Custodian in such manner and form as may be
prescribed by the Committee and the Custodian, which
instructions will be acted upon as promptly as
practicable. Withdrawals and transfers will be
subject to any fees imposed in accordance with
Section 10(e) hereof.
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(d) Upon termination of employment of a participant for
any reason, the Custodian will continue to maintain
the participant's Account until the earlier of such
time as the participant withdraws or transfers all
Stock in the Account or two years after the
participant ceases to be employed by the Company and
its Subsidiaries. At the expiration of such two-year
period, the assets in Participant's account shall be
withdrawn or transferred as elected by the
Participant or, in the absence of such election, as
determined by the Committee.
(e) Costs and expenses incurred in the administration of
the Plan and maintenance of Accounts will be paid by
the Company, including annual fees of the Custodian
and any brokerage fees and commissions for the
purchase of Stock upon reinvestment of dividends and
distributions. The foregoing notwithstanding, the
Custodian may impose or pass through a reasonable fee
for the withdrawal of Stock in the form of stock
certificates (as permitted under Section 10(c)), and
reasonable fees for other services unrelated to the
purchase of Stock under the Plan, to the extent
approved in writing by the Company and communicated
to participants. In no circumstance shall the Company
pay any brokerage fees and commissions for the sale
of Stock acquired under the Plan by a participant.
11. Interest. No interest shall accrue on the payroll deductions of a
participant in the Plan
12. Stock.
(a) The maximum number of shares of Stock which shall be
made available for sale under the Plan shall be 1.5
million shares, subject to adjustment as provided in
Section 18 hereof. If, on a given Exercise Date, the
number of shares with respect to which options are to
be exercised exceeds the number of shares then
available under the Plan, the Company shall make a
pro rata allocation of the shares remaining available
for purchase in as uniform a manner as shall be
practicable and as it shall determine to be
equitable. Any shares of Stock delivered by the
Company under the Plan may consist, in whole or in
part, of authorized and unissued shares or shares
acquired by the Company in the open market. Shares
acquired in the open market through dividend
reinvestment will not count against the Reserves.
(b) The participant shall have no interest or voting
right in shares purchasable upon exercise of his or
her option until such option has been exercised.
13. Administration.
(a) The Plan shall be administered by the Committee
except to the extent the Board elects to administer
the Plan, in which case references herein to the
"Committee" shall be deemed to include references to
the "Board." The Committee shall have full and final
authority to construe, interpret and apply the terms
of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan.
The Committee may, in its discretion, delegate
authority to the Administrator. Every finding,
decision and determination made by the Committee or
Administrator shall, to the full extent permitted by
law, be final
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and binding upon all parties (except for any reserved
right of the Committee to review a finding, decision
or determination of the Administrator). The
Committee, Administrator, and each member thereof
shall be entitled to, in good faith, rely or act upon
any report or other information furnished to him or
her by any executive officer, other officer or
employee of the Company or any Designated Subsidiary,
the Company's independent auditors, consultants or
any other agents assisting in the administration of
the Plan. Members of the Committee or Administrator
and any officer or employee of the Company or any
Designated Subsidiary acting at the direction or on
behalf of the Committee shall not be personally
liable for any action or determination taken or made
in good faith with respect to the Plan, and shall, to
the extent permitted by law, be fully indemnified and
protected by the Company with respect to any such
action or determination.
(b) The Custodian will act as custodian under the Plan,
and will perform such duties as are set forth in the
Plan and in any agreement between the Company and the
Custodian. The Custodian will establish and maintain,
as agent for each Participant, an Account and any
subaccounts as may be necessary or desirable for the
administration of the Plan.
14. Designation of Beneficiary.
(a) A participant may file a written designation of a
beneficiary who is to receive any shares and cash, if
any, from the participant's Account under the Plan in
the event of (i) such participant's death subsequent
to an Exercise Date on which the option is exercised
but prior to a distribution to such participant of
shares or cash then held in the participant's Account
or (ii) such participant's death prior to exercise of
the option. If a participant is married and the
designated beneficiary is not the spouse, spousal
consent shall be required for such designation to be
effective.
(b) Such designation of beneficiary may be changed by the
participant at any time by written notice. In the
event of the death of a participant and in the
absence of a beneficiary validly designated under the
Plan who is living at the time of such participant's
death, any shares or cash otherwise deliverable under
Section 14(a) shall be delivered to the participant's
estate.
15. Transferability. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 14 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect.
16. Use of Funds. All payroll deductions received or held by the
Company under the Plan may be used by the Company for any corporate purpose, and
the Company shall not be obligated to segregate such payroll deductions.
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17. Reports. An individual Account shall be maintained by the Custodian
for each participant in the Plan. Statements of Account shall be given to each
participant at least semi-annually, which statements shall set forth the amounts
of payroll deductions, the Purchase Price, the number of shares purchased, any
remaining cash balance, and other information deemed relevant by the Committee.
18. Adjustments Upon Changes in Capitalization, Dissolution,
Liquidation, Merger or Asset Sale.
(a) Changes in Capitalization. The Committee shall
proportionately adjust the Reserves, and the price
per share and the number of shares of Stock covered
by each option under the Plan which has not yet been
exercised, for any increase or decrease in the number
of issued shares of Stock resulting from a stock
split, reverse stock split, stock dividend,
combination or reclassification of the Stock, or
other extraordinary corporate event which affects the
Stock in order to prevent dilution or enlargement of
the rights of participants. The determination of the
Committee with respect to any such adjustment shall
be final, binding and conclusive.
(b) Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company,
the Offering Period shall terminate immediately prior
to the consummation of such proposed action, unless
otherwise provided by the Committee.
(c) Asset Sale or Merger. In the event of a proposed sale
of all or substantially all of the assets of the
Company, or the merger of the Company with or into
another corporation, the Committee shall shorten the
Offering Period then in progress by setting a new
Exercise Date (the "New Exercise Date"). The New
Exercise Date shall be before the date of the
Company's proposed asset sale or merger. The
Committee shall notify each participant in writing,
at least ten business days prior to the New Exercise
Date, that the Exercise Date for the participant's
option has been changed to the New Exercise Date and
that the participant's option shall be exercised
automatically on the New Exercise Date, unless prior
to such date the participant has withdrawn from the
Offering Period as provided in Section 10 hereof.
19. Amendment or Termination.
(a) The Board may at any time and for any reason
terminate or amend the Plan. Except as provided in
Section 18 hereof, no such termination can affect
options previously granted, provided that an Offering
Period may be terminated by the Board of Directors by
shortening the Offering Period and accelerating the
Exercise Date to a date not prior to the date of such
Board action if the Board determines that termination
of the Plan is in the best interests of the Company
and its stockholders. Except as provided in Section
18 and this Section 19, no amendment may make any
change in any option theretofore granted which
materially adversely affects the rights of any
participant, and any amendment will be subject to the
approval of the Company's stockholders not later than
one year after Board approval of such amendment if
such stockholder approval is
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required by any federal or state law or regulation or
the rules of any stock exchange or automated
quotation system on which the Stock may then be
listed or quoted, or if such stockholder approval is
necessary in order for the Plan to continue to meet
the requirements of Section 423 of the Code, and the
Board may otherwise, in its discretion, determine to
submit any amendment to stockholders for approval.
(b) Without stockholder consent and without regard to
whether any participant rights may be considered to
have been "adversely affected," the Committee shall
be entitled to change the Offering Periods, limit the
frequency and/or number of changes in the amount
withheld during an Offering Period, establish the
exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, permit payroll
withholding in excess of the amount designated by a
participant in order to adjust for delays or mistakes
in the Company's processing of properly completed
withholding elections, establish reasonable waiting
and adjustment periods and/or accounting and
crediting procedures to ensure that amounts applied
toward the purchase of Stock for each participant
properly correspond with amounts withheld from the
participant's Compensation, and establish such other
limitations or procedures as the Committee determines
in its sole discretion are advisable and consistent
with the Plan.
20. Notices. All notices or other communications by a participant to
the Company under or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Company at the location,
or by the person, designated by the Company for the receipt thereof.
21. Conditions. Upon Issuance of Shares. The Company shall not be
obligated to issue shares with respect to an option unless the exercise of such
option and the issuance and delivery of such shares pursuant thereto shall
comply with all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange or automated quotation
system upon which the shares may then be listed or quoted, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.
22. Plan Effective Date and Stockholder Approval. The Plan has been
adopted by the Board on November 19, 1999, but shall become effective upon
approval by the Company's stockholders by a vote sufficient to meet the
requirements of Section 423(b)(2) of the Code within 12 months after the date
the Plan was adopted and prior to the first Exercise Date. In the event
stockholders fail to so approve the Plan, all options granted under the Plan
shall be canceled, all payroll deductions shall be refunded, and the Plan shall
be terminated.
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