EX-10.3






Exhibit 10.3




Fair Isaac Corporation

1992 Long-term Incentive Plan




Nonstatutory Stock Option Agreement

INITIAL GRANTS

(FOR Non-employee Directors)




     These are the terms and conditions applicable to the NONSTATUTORY STOCK OPTION granted by Fair
Isaac Corporation, a Delaware corporation (“Fair Isaac”), to you, the optionee listed on the Notice
of Grant of Stock Option attached hereto as the cover page (the “Cover Page”), effective as of the
date of grant specified on the Cover Page. The Cover Page together with these Terms and
Conditions of Nonstatutory Stock Option Agreement constitute the Nonstatutory Stock Option
Agreement (the “Option Agreement”). This Option is granted pursuant to the terms of Fair Isaac’s
1992 Long-term Incentive Plan, as amended (the “Plan”). Terms that are not defined in this Option
Agreement will have the meanings given to them in the Plan.



	 	 	 
	Nonstatutory 

Stock Option

	 	This Option is not intended to qualify as an incentive stock
option under Section 422 of the Internal Revenue Code.
	 
	 	 
	Vesting

	 	The applicable percentage of this Option will vest and become
exercisable on the Vesting Dates, as shown on the Cover Page.
In addition, this entire Option will vest and become
exercisable in full in the event that:
	 
	 	 
	 

	 	•     Your service as a 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 a director of Fair Isaac (or any Subsidiary).

	 
	 	 
	 

	 	Options that are not exercisable, or do not become exercisable
in accordance with the foregoing provisions, as of the
termination of your service as a director, shall terminate as
of such date. Vested Options may be exercised in the manner
and during the period of time set forth in this Option
Agreement.
	 
	 	 
	Exercise Period

	 	The right to purchase shares under this Option Agreement
terminates at 3:00 p.m. Pacific Time on the earliest of
	 
	 	 
	 

	 	•     the Expiration Date shown on the Cover Page; or

	 
	 	 
	 

	 	•     the first anniversary date of the termination date of
your service as a director of Fair Isaac (or any Subsidiary).

	 
	 	 
	Restrictions 

On Exercise

	 	You may not 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

	 	You must notify Fair Isaac in writing of your intent to
exercise this Option. The notice must specify how many
shares you wish to purchase and must also specify how your
shares should be registered (i.e., in your name only, in your
and your spouse’s names as community property or as joint
tenants with right of survivorship).






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	 	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, you must include payment of the
exercise price shown on the Cover Page for the shares you are
purchasing. Payment may be made in one (or a combination of
two or more) of the following forms, as approved by Fair Isaac
in its sole discretion:
	 
	 	 
	 

	 	•     Your personal check, a cashier’s check or a money
order;

	 
	 	 
	 

	 	•     Irrevocable directions to a securities broker approved
by Fair Isaac to sell shares underlying this Option and to
deliver all or a portion of the sale proceeds to Fair Isaac in
payment of the exercise price and the balance of the sale
proceeds to you; or

	 
	 	 
	 

	 	•     Certificates for shares of Fair Isaac common stock
that you have owned for at least 12 months, along with any
forms needed to effect a transfer of those shares to Fair
Isaac with the value of the shares, determined as of the
effective date of the exercise of this Option, applied to the
exercise price.

	 
	 	 
	Withholding Taxes

	 	You are responsible to pay any withholding taxes that may be
due as a result of your exercise of this Option. Fair Isaac
will not withhold any taxes.
	 
	 	 
	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.
	 
	 	 
	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 to (i) members of your immediate family, a
partnership or limited liability company 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), and (ii)
any other person or entity to which a transfer of compensatory
securities is permitted under the applicable rules for a
Securities and Exchange Commission Form S-8 registration
statement. For purposes of the foregoing, “immediate family”
means your spouse, children or grandchildren, including
step-children or step-grandchildren. Any of these persons or
entities to whom this Option may be transferred is a
“permitted assignee.” However, such transfer shall not be
effective until you have delivered to Fair Isaac notice of
such transfer and such permitted assignee agrees to be bound
by the terms of this Option, this Option Agreement, the Plan
and the insider trading (and other applicable) policies of
Fair Isaac. You cannot transfer, pledge, hypothecate, assign
or otherwise dispose of this Option, including using this
Option as security for a loan. Any






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	 	attempts to do any of
these things contrary to the provisions of this Option or this
Option Agreement, or the levy of any attachment or similar
process upon this Option, shall be null and void. 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.
	 
	 	 
	Retention 

Rights

	 	Neither your Option nor the terms of this Option Agreement
give you the right to continue as a director of 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 assignees, estate, beneficiaries or heirs, have
no rights as a stockholder of Fair Isaac until the Options
have been exercised, and the exercise price has been received
by Fair Isaac, and such rights are conferred upon your
becoming a holder of record of the purchased shares. No
adjustments are made for dividends or other rights if the
applicable record date occurs before you become a holder of
record, except as described in the Plan.
	 
	 	 
	Adjustments

	 	In the event of any adjustments to the capital stock of Fair
Isaac as described in Article 10 of the Plan, the number of
shares covered by this Option and the exercise price per share
shall 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).
	 
	 	 
	Other 

Agreements

	 	This Option Agreement and the Plan constitute the entire
understanding between you and Fair Isaac regarding this
Option. Any other prior agreements, commitments or
negotiations concerning this Option are superseded. If there
is any inconsistency between the provisions of this Option
Agreement and the Plan, the provisions of the Plan shall
govern. This Option Agreement may be amended only in
writing.
	 
	 	 
	Definitions

	 	“Disability” means that you are unable to engage in any
substantial gainful activity by reason of a medically
determinable, physical or mental impairment that can be
expected to result in death or that has lasted (or can be
expected to last) for a continuous period of not less than 12
months.





By signing the Cover Page, you agree to all of the terms and conditions described above and in the
Plan.





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