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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: August 7, 2001
(Date of earliest event reported)
FAIR, ISAAC AND COMPANY, INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 0-16439 94-1499887
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
200 Smith Ranch Road, San Rafael, CA 94903
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (415) 472-2211
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Item 5. Other Events.
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SUMMARY OF RIGHTS
On August 7, 2001, the Board of Directors of Fair, Isaac and Company,
Incorporated (the "Company") declared a dividend distribution of one "Right" for
each outstanding share of common stock (the "Common Stock") of the Company to
stockholders of record at the close of business on August 21, 2001 (the "Record
Date"). Except as set forth below, each Right, when exercisable, entitles the
registered holder to purchase from the Company one one-thousandth of a share of
a new series of preferred stock, designated as Series A Participating Preferred
Stock (the "Preferred Stock"), at a price of Two Hundred Forty Dollars ($240.00)
per one one-thousandth of a share (the "Purchase Price"), subject to adjustment.
The description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and Mellon Investor Services LLC, as
"Rights Agent."
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights certificates will
be distributed. The Rights will separate from the Common Stock and a
"Distribution Date" will occur upon the earliest of the following: (i) a public
announcement that a person, entity or group of affiliated or associated persons
or entities (an "Acquiring Person") has acquired, or obtained the right to
acquire, beneficial ownership of fifteen percent (15%) or more of the
outstanding shares of Common Stock (other than (A) as a result of repurchases of
stock by the Company or certain inadvertent actions by institutional or certain
other stockholders, (B) the Company, any subsidiary of the Company or any
employee benefit plan of the Company or any subsidiary and (C) certain other
instances set forth in the Rights Agreement); or (ii) ten (10) business days
(unless such date is extended by the Board of Directors) following the
commencement of a tender offer or exchange offer which would result in any
person, entity or group of affiliated or associated persons or entities becoming
an Acquiring Person (unless such tender offer or exchange offer is a Permitted
Offer (defined below)).
Until the Distribution Date (or earlier redemption or expiration of the
Rights, if applicable), (i) the Rights will be evidenced by certificates for
Common Stock and will be transferred only with such Common Stock certificates,
(ii) new Common Stock certificates issued after the Record Date upon transfers
or new issuances of the Common Stock will contain a notation incorporating the
Rights Agreement by reference and (iii) the surrender for transfer of any
certificates for outstanding Common Stock will also constitute the transfer of
the Rights associated with such Common Stock. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date, and the separate Rights Certificates
alone will evidence the Rights.
The Rights are not exercisable unless and until a Distribution Date
occurs. The Rights will expire on the earliest of (i) August 9, 2011, (ii)
consummation of a merger transaction with a person, entity or group who (x)
acquired Common Stock pursuant to a Permitted Offer and (y) is offering in the
merger the same price per share and form of consideration paid in the Permitted
Offer or (iii) redemption or exchange of the Rights by the Company as described
below.
2
The number of Rights associated with each share of Common Stock shall
be proportionately adjusted in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Common Stock. The Purchase
Price payable, and the number of one one-thousandths of a share of Preferred
Stock or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time (i) in the event of a stock dividend on,
or a subdivision, combination or reclassification of the Preferred Stock, (ii)
upon the grant to holders of the Preferred Stock of certain rights, options or
warrants to subscribe for Preferred Stock, certain convertible securities or
securities having the same or more favorable rights, privileges and preferences
as the Preferred Stock at less than the current market price of the Preferred
Stock or (iii) upon the distribution to holders of the Preferred Stock of
evidences of indebtedness or assets (excluding regular quarterly cash dividends
out of earnings or retained earnings) or of subscription rights, options or
warrants (other than those referred to above). With certain exceptions, no
adjustments in the Purchase Price will be required until cumulative adjustments
require an adjustment of at least one percent (1%) in such Purchase Price.
In the event that, after the first date of public announcement by the
Company or an Acquiring Person that an Acquiring Person has become such, the
Company is involved in a merger or other business combination transaction
(whether or not the Company is the surviving corporation) or fifty percent (50%)
or more of the Company's assets or earning power are sold (in one transaction or
a series of transactions), proper provision shall be made so that each holder of
a Right (other than an Acquiring Person) shall thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price, that
number of shares of common stock of either the Company, in the event that it is
the surviving corporation of a merger or consolidation, or the acquiring company
(or, in the event there is more than one acquiring company, the acquiring
company receiving the greatest portion of the assets or earning power
transferred) which at the time of such transaction would have a market value of
two (2) times the Purchase Price (such right being called the "Merger Right").
In the event that a person, entity or group becomes an Acquiring Person (unless
pursuant to a tender offer or exchange offer for all outstanding shares of
Common Stock at a price and on terms determined prior to the date of the first
acceptance of payment for any of such shares by at least a majority of the
members of the Board of Directors who are not officers of the Company and are
not Acquiring Persons (or affiliated or associated persons or entities thereof)
to be fair to, and in the best interests of, the Company and its stockholders (a
"Permitted Offer")), then proper provision shall be made so that each holder of
a Right will, for a sixty (60) day period (subject to extension under certain
circumstances) thereafter, have the right to receive upon exercise that number
of shares of Common Stock (or, at the election of the Company, which election
may be obligatory if sufficient authorized shares of Common Stock are not
available, a combination of Common Stock, property, other securities (e.g.,
Preferred Stock) or cash (including by way of a reduction in the Purchase
Price)) having a market value of two (2) times the Purchase Price (such right
being called the "Subscription Right"). The holder of a Right will continue to
have the Merger Right whether or not such holder exercises the Subscription
Right. Notwithstanding the foregoing, upon the occurrence of any of the events
giving rise to the exercisability of the Merger Right or the Subscription Right,
any Rights that are or were at any time after the Distribution Date owned by an
Acquiring Person (or affiliated or associated persons or entities thereof) shall
immediately become null and void.
3
At any time prior to the earlier to occur of (i) a person, entity or
group becoming an Acquiring Person or (ii) the expiration of the Rights, the
Company may redeem the Rights in whole, but not in part, at a price of $0.001
per Right (the "Redemption Price"), which redemption shall be effective upon the
action of the Board of Directors. Additionally, the Company may, following a
person, entity or group becoming an Acquiring Person, redeem the then
outstanding Rights in whole, but not in part, at the Redemption Price (i) if
such redemption is incidental to a merger or other business combination
transaction or series of transactions involving the Company but not involving an
Acquiring Person (or certain related persons or entities) or (ii) following an
event giving rise to, and the expiration of the exercise period for, the
Subscription Right if and for as long as the Acquiring Person triggering the
Subscription Right beneficially owns securities representing less than fifteen
percent (15%) of the outstanding shares of Common Stock and at the time of
redemption there are no other Acquiring Persons. The redemption of Rights
described in the preceding sentence shall be effective only as of such time when
the Subscription Right is not exercisable. Upon the effective date of the
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.
Subject to applicable law, the Board of Directors, at its option, may
at any time after a person, group or entity becomes an Acquiring Person (but not
after the acquisition by such Acquiring Person of fifty percent (50%) or more of
the outstanding shares of Common Stock), exchange all or part of the then
outstanding and exercisable Rights (except for Rights which have become void)
for shares of Common Stock at a rate of one share of Common Stock per Right
(subject to adjustment) or, alternatively, for substitute consideration
consisting of cash, securities of the Company or other assets (or any
combination thereof).
The Preferred Stock purchasable upon exercise of the Rights will be
nonredeemable and junior to any other series of preferred stock the Company may
issue (unless otherwise provided in the terms of such stock). Each share of
Preferred Stock will have a preferential quarterly dividend in an amount equal
to 1,000 times the dividend declared on each share of Common Stock, but in no
event less than $25.00. In the event of liquidation, the holders of shares of
Preferred Stock will receive a preferred liquidation payment equal, per share,
to the greater of $1,000.00 or 1,000 times the payment made per share of Common
Stock. Each share of Preferred Stock will have 1,000 votes, voting together with
the shares of Common Stock. In the event of any merger, consolidation or other
transaction in which shares of Common Stock are exchanged, each share of
Preferred Stock will be entitled to receive 1,000 times the amount and type of
consideration received per share of Common Stock. The rights of the Preferred
Stock as to dividends, liquidation and voting, and in the event of mergers and
consolidations, are protected by customary antidilution provisions. Fractional
shares of Preferred Stock will be issuable; however, the Company may elect to
(i) distribute depositary receipts in lieu of such fractional shares and (ii)
make an adjustment in cash, in lieu of fractional shares other than fractions
that are multiples of one one-thousandth of a share, based on the market price
of the Preferred Stock prior to the date of exercise.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights should not
be taxable to stockholders or to the Company, holders of Rights may, depending
upon the circumstances, recognize taxable income in the event (i) that the
4
Rights become exercisable for (x) Common Stock or Preferred Stock (or other
consideration) or (y) common stock of an acquiring company in the instance of
the Merger Right as set forth above or (ii) of any redemption or exchange of the
Rights as set forth above.
The Company and the Rights Agent retain broad authority to amend the
Rights Agreement; however, following any Distribution Date any amendment may not
adversely affect the interests of holders of Rights.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Company. THIS
SUMMARY DESCRIPTION OF THE RIGHTS DOES NOT PURPORT TO BE COMPLETE AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE RIGHTS AGREEMENT, WHICH IS
INCORPORATED HEREIN BY REFERENCE.
5
Item 7. Financial Statements and Exhibits.
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(c) Exhibits
4.1 Rights Agreement dated as of August 9, 2001 between Fair,
Isaac and Company, Incorporated and Mellon Investor Services
LLC, which includes as Exhibit B the form of Rights
Certificate and as Exhibit C the Summary of Rights. Pursuant
to the Rights Agreement, printed Rights Certificates will not
be mailed until after the Distribution Date (as defined in the
Rights Agreement). (Filed as Exhibit 4.1 to the Company's
Registration Statement on Form 8-A relating to the Series A
Participating Preferred Stock Purchase Rights and incorporated
herein by reference.)
99.1 Press release dated August 9, 2001.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: August 9, 2001.
FAIR, ISAAC AND COMPANY, INCORPORATED
By: /s/ Henk J. Evenhuis
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Name: Henk J. Evenhuis
Title: Vice President, Chief Financial Officer and
Secretary
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EXHIBIT INDEX
EXHIBIT
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4.1 Rights Agreement dated as of August 9, 2001 between
Fair, Isaac and Company, Incorporated and Mellon
Investor Services LLC, which includes as Exhibit B
the form of Rights Certificate and as Exhibit C the
Summary of Rights. Pursuant to the Rights Agreement,
printed Rights Certificates will not be mailed until
after the Distribution Date (as defined in the
Rights Agreement). (Filed as Exhibit 4.1 to the
Company's Registration Statement on Form 8-A
relating to the Series A Participating Preferred
Stock Purchase Rights and incorporated herein by
reference.)
99.1 Press release dated August 9, 2001.
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Exhibit 99.1
Contact: Debbie McGowan
Fair, Isaac
415-492-5309
dmcgowan@fairisaac.com
Fair, Isaac Adopts Stockholder Rights Plan
SAN RAFAEL, Calif.--August 9, 2001--Fair, Isaac and Company, Incorporated (NYSE:
FIC) today announced that its Board of Directors has adopted a Stockholder
Rights Plan. Under the Rights Plan, rights will be distributed as a dividend at
the rate of one right for each share of Fair, Isaac common stock, held by
stockholders of record as of the close of business on August 21, 2001.
The Rights Plan is designed to enable all Fair, Isaac stockholders to realize
the full value of their investment and to provide for fair and equal treatment
for all stockholders in the event that an unsolicited attempt is made to acquire
Fair, Isaac. The adoption of the Rights Plan is intended as a means to guard
against abusive takeover tactics. While the Company as a matter of policy does
not comment on the existence or absence of takeover proposals, the Stockholder
Rights Plan was adopted only for precautionary purposes to protect the rights of
the stockholders and not in response to any known takeover proposal.
The rights will be distributed as a non-taxable dividend and will expire ten
years from the date of adoption of the Rights Plan. The rights will be
exercisable only if a person or group acquires 15 percent or more of Fair,
Isaac's common stock, subject to certain exceptions set forth in the Rights
Plan. If a person acquires 15 percent or more of Fair, Isaac's common stock
while the Rights Plan remains in place, all rights holders, except the buyer,
will be entitled to acquire Fair, Isaac common stock at a discount. The effect
will be to discourage acquisitions of 15 percent or more of Fair, Isaac's common
stock in the absence of negotiations with the Company's Board of Directors.
The rights will trade with Fair, Isaac's common stock unless and until they are
separated upon the occurrence of certain future events. Fair, Isaac's Board of
Directors may terminate the Rights Plan at any time or redeem the rights prior
to the time a person acquires 15 percent or more of Fair, Isaac's common stock.
Additional details regarding
-more-
the Rights Plan will be outlined in a summary to be mailed to all stockholders
following the record date, and a copy of the Rights Plan will be filed shortly
with the Securities and Exchange Commission.
About Fair, Isaac
Fair, Isaac and Company is a global provider of customer analytics and decision
technology. Widely recognized for its pioneering work in credit scoring, Fair,
Isaac revolutionized the way lending decisions are made. Today the Company helps
clients in multiple industries increase the value of customer relationships.
Fair, Isaac has made the Forbes list of the top 200 U.S. small companies eight
times in the last nine years. Headquartered in San Rafael, California, Fair,
Isaac reported revenues of $298 million in fiscal 2000.
For more information about Fair, Isaac and Company, Incorporated, visit
http://www.fairisaac.com.
Except for the historical information contained herein, the matters set forth in
this press release are forward-looking statements within the meaning of the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. Such statements include, without limitation, statements regarding the
anticipated benefits and expected consequences of the Rights Plan. These
forward-looking statements are subject to risks and uncertainties that may cause
actual results to differ materially. For a discussion of factors that may cause
results to differ, see Fair, Isaac's SEC reports, including its Quarterly Report
on Form 10-Q for the quarter ended March 31, 2001 and its Annual Report on Form
10-K for the year ended September 30, 2000. These forward-looking statements
speak only as of the date hereof. Fair, Isaac disclaims any intent or obligation
to update these forward-looking statements.
Fair, Isaac is a registered trademark of Fair, Isaac and Company, Inc., in the
United States and/or in other countries.
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