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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
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INTUIT INC.
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[INTUIT LOGO]
PO Box 7850
Mountain View, CA 94039-7850
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 4, 1998
Dear Stockholders:
We are notifying you that the Annual Meeting of Stockholders of Intuit Inc. will
be held at our offices at 2550 Garcia Avenue, Mountain View, California 94043,
at 8:00 a.m. P.S.T. on Friday, January 15, 1999. Only stockholders of record at
the close of business on November 19, 1998 are entitled to vote at the Meeting.
At the Meeting we will ask stockholders to act on the following matters:
1. Elect seven directors to serve until the next Annual Meeting of
Stockholders. We intend to nominate the following incumbent directors
for re-election:
Christopher W. Brody Michael R. Hallman
William V. Campbell William H. Harris, Jr.
Scott D. Cook Burton J. McMurtry
L. John Doerr
2. Amend the Intuit Inc. 1993 Equity Incentive Plan to increase the
number of shares of Common Stock available under the plan by
2,640,000 shares (from 13,105,000 shares to 15,745,000 shares).
3. Amend the Intuit Inc. 1996 Employee Stock Purchase Plan to increase
the number of shares of Common Stock available under the plan by
300,000 shares (from 500,000 shares to 800,000 shares).
4. Amend the Intuit Inc. 1996 Directors Stock Option Plan to increase
the number of shares of Common Stock available under the Plan by
30,000 shares (from 165,000 shares to 195,000 shares).
5. Ratify the appointment of Ernst & Young LLP as our independent
auditors for fiscal 1999.
6. Transact any other business that is properly presented at the
Meeting.
Each of these matters is described in more detail in the enclosed Proxy
Statement. We have also enclosed a copy of our Annual Report for our fiscal year
ended July 31, 1998.
Please use this opportunity to take part in Intuit's affairs by voting your
shares. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE THE
ENCLOSED PROXY CARD AND RETURN IT IN THE ENVELOPE PROVIDED.
Sincerely,
/s/ CATHERINE L. VALENTINE
Catherine L. Valentine
Vice President and Corporate Secretary
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[INTUIT LOGO]
PO Box 7850
Mountain View, CA 94039-7850
PROXY STATEMENT
DECEMBER 4, 1998
INFORMATION ABOUT THE MEETING, VOTING AND PROXIES
DATE, TIME AND PLACE OF MEETING
The Board of Directors of Intuit Inc. is asking for your proxy for use at the
Annual Meeting of Stockholders of Intuit to be held on Friday, January 15, 1999
at 8:00 a.m. P.S.T at our offices at 2550 Garcia Avenue, Mountain View,
California. We are initially mailing this proxy statement and proxy to
stockholders of Intuit on December 4, 1998.
RECORD DATE, OUTSTANDING SHARES AND QUORUM
Only holders of record of Intuit Common Stock at the close of business on
November 19, 1998 (called the "Record Date") will be entitled to vote at the
Meeting. On the Record Date, we had approximately 59,618,115 shares of Common
Stock outstanding and entitled to vote, with approximately 800 stockholders of
record and approximately 25,000 beneficial owners of our stock. If a majority of
the shares outstanding on the Record Date are present at the Meeting, either in
person or by proxy, we will have a quorum at the Meeting. Any shares represented
by proxies that are marked to abstain from voting on a proposal will be counted
as present in determining whether we have a quorum. If a broker, bank,
custodian, nominee or other record holder of Intuit Common Stock indicates on a
proxy that it does not have discretionary authority to vote certain shares on a
particular matter, the shares held by that record holder (referred to as "broker
non-votes") will also be counted as present in determining whether we have a
quorum.
VOTING RIGHTS AND VOTING OF PROXIES
Holders of our Common Stock are entitled to one vote for each share they held as
of the Record Date. Cumulative voting for directors is not permitted. Directors
will be elected by a plurality of the votes cast by the shares of Common Stock
present at the Meeting (either in person or by proxy), which means that the
seven nominees with the most votes will be elected. Proposals 2, 3, 4 and 5 must
be approved by a majority of the shares of Common Stock voting for or against
the Proposal at the Meeting. All votes will be tabulated by the Inspector of
Elections appointed for the Meeting. The Inspector will separately tabulate yes
and no votes, abstentions and broker non-votes for each proposal. If you do not
give specific voting instructions on your proxy for a specific proposal, your
shares will be counted as affirmative votes for that proposal. Broker non-votes
and abstentions on a particular proposal will not be considered present except
for purposes of determining a quorum, so those shares will not be counted as
either yes or no votes in determining whether or not the proposal is approved.
SOLICITATION AND VOTING OF PROXIES
The proxy included with this Proxy Statement is solicited by the Board of
Directors of Intuit for use at the Meeting. You can submit your proxy by mailing
it in the envelope provided. If you hold your shares in "street name" (i.e.,
through a broker, bank or other entity that holds them on your behalf) rather
than in your own name, you may be able to provide voting instructions for your
shares by telephone or via the Internet. If these options are available to
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you, instructions for telephone and electronic voting are included with your
proxy card. If your proxy is properly completed and submitted, and it is not
revoked before the Meeting, your shares will be voted at the Meeting according
to the instructions indicated on your proxy. If you sign and return your proxy
card but do not give any voting instructions, your shares will be voted in favor
of the election of each of the director nominees listed in Proposal No. 1 below,
and in favor of Proposal Nos. 2, 3, 4 and 5. As far as we know, no other matters
will be presented at the Meeting. However, if any other matters of business are
properly presented, the proxy holders named on the proxy card are authorized to
vote the shares represented by proxies according to their judgment.
Intuit will pay all expenses of soliciting proxies to be voted at the Meeting.
After the proxies are initially distributed, Intuit and/or its agents may also
solicit proxies by mail, telephone or in person. We have hired a proxy
solicitation firm, Beacon Hill Partners, Inc., to assist us in soliciting
proxies. We will pay Beacon Hill a fee of $4,500, plus their expenses (which we
estimate will be approximately $1,000). After the proxies are initially
distributed, we will ask brokers, custodians, nominees and other record holders
to forward copies of the Proxy Statement, proxy card and other materials to
people for whom they hold shares of Common Stock, and to request that the
beneficial holders give them authority to sign the proxies. We will reimburse
record holders for reasonable expenses they incur in forwarding proxy materials
to beneficial holders.
REVOCATION OF PROXIES
If you submit the enclosed proxy, you may revoke it at any time before voting
takes place at the Meeting. There are three ways you can revoke your proxy: (1)
deliver to the Secretary of Intuit a written notice, dated later than the proxy
you want to revoke, stating that the proxy is revoked; (2) deliver to the
Secretary of Intuit a signed proxy with a later date than the proxy you want to
revoke; or (3) attend the Meeting and vote in person. Please note that if your
shares are held of record by a broker, bank or other nominee and you wish to
vote at the Meeting, you must bring to the Meeting a letter from the record
holder confirming your beneficial ownership of the shares.
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
Our Board of Directors currently has seven members who generally serve one-year
terms. At the Meeting, we will nominate the seven current directors for
re-election to the Board of Directors. The current directors are Christopher W.
Brody, William V. Campbell, Scott D. Cook, L. John Doerr, Michael R. Hallman,
William H. Harris, Jr. and Burton J. McMurtry. Your proxy will be voted for each
of these seven nominees unless your proxy is marked to withhold authority to
vote for any or all of them. Directors will be elected by a plurality of the
shares present at the Meeting, which means that the seven nominees who receive
the most votes will be elected. We are not aware that any nominee is unable or
unwilling to serve. However, if any nominee is unable or for good cause
unwilling to serve, the proxy holders may decide to vote the shares for any
substitute nominee.
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DIRECTORS/NOMINEES
The following table shows Intuit's current directors and nominees for election.
Each nominee, if elected, will serve until the next Annual Meeting of
Stockholders and until a qualified successor is elected, unless the nominee
resigns or is removed from the Board prior to that time.
<TABLE>
<CAPTION>
DIRECTOR
NAME OF DIRECTOR AGE PRINCIPAL OCCUPATION SINCE
-------------------- --- -------------------------- --------
<S> <C> <C> <C>
Christopher W. Brody(1)(2) 54 Managing Director, E.M. Warburg Pincus & Co., LLC 1993
William V. Campbell(3)(4) 58 Chairman of the Board, Intuit 1994
Scott D. Cook(2)(3) 46 Chairman of the Executive Committee of Intuit's Board 1984
L. John Doerr(4) 47 General Partner, Kleiner Perkins Caufield & Byers 1990
Michael R. Hallman(4) 53 President, The Hallman Group 1993
William H. Harris, Jr.(3) 42 President and Chief Executive Officer, Intuit 1998
Burton J. McMurtry(1) 63 General Partner of the General Partner, Technology 1990
Venture Investors partnerships
</TABLE>
- ----------
1. Member of the Audit Committee
2. Member of the Nominating Committee
3. Member of the Executive Committee
4. Member of the Compensation Committee
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
ELECTION OF EACH OF THE NOMINATED DIRECTORS.
Mr. Brody became a director of Intuit in December 1993 following Intuit's
acquisition of ChipSoft, Inc. He had joined the ChipSoft Board of Directors in
December 1989 and served as its Chairman from December 1989 until July 1991. Mr.
Brody is a Managing Director of E.M. Warburg, Pincus & Co., LLC, a venture
capital and investment counseling firm. He joined that firm in 1968 and has been
a managing director since 1971. Mr. Brody holds a Bachelor of Arts degree in
English literature and a Masters in Business Administration from Harvard
University.
Mr. Campbell was elected to Intuit's Board of Directors in May 1994 and
currently serves as Chairman of the Board. He served as Intuit's President and
Chief Executive Officer from April 1994 through July 1998. Mr. Campbell was
President and Chief Executive Officer of GO Corporation (a pen-based computing
software company) from January 1991 to December 1993. Mr. Campbell also serves
on the board of directors of SanDisk, Inc. (a computer storage devices company),
Great Plains Software, Inc. (a software company), Apple Computer, Inc. (a
computer company) and Netscape Communications Corp. (an Internet browser
company). He is a member of SanDisk's Compensation Committee and a member of
Apple's Audit Committee. Mr. Campbell holds both a Bachelors and a Masters
degree in economics from Columbia University.
Mr. Cook, a founder of Intuit, has been a director of Intuit since March 1984
and is currently Chairman of the Executive Committee of the Board. He served as
Intuit's Chairman of the Board from March 1993 through July 1998. From March
1984 to April 1994, he also served as President and Chief Executive Officer of
Intuit. Mr. Cook also serves on the board of directors of Amazon.com, Inc. (an
online bookseller) and ebay Inc. (an online electronic commerce company). Mr.
Cook holds a Bachelor of Arts degree in economics and mathematics from the
University of Southern California and a Masters in Business Administration from
Harvard University.
Mr. Doerr has been a director of Intuit since August 1990. He has been a general
partner of Kleiner Perkins Caufield & Byers, a venture capital firm, since
August 1980. He is also a director of @Home Corporation (which provides cable
network-based Internet access), Amazon.com, Inc. (an online bookseller),
Netscape Communications Corporation (an Internet browser company), Platinum
Software Corporation (a software company), and Sun Microsystems, Inc. (a
computer and software company). Mr. Doerr holds Bachelor of Science and Master
of Science degrees in electrical engineering and computer science from Rice
University and a Masters in Business Administration from Harvard University.
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Mr. Hallman became a director of Intuit in December 1993 following Intuit's
acquisition of ChipSoft. He had joined ChipSoft's Board of Directors in April
1992. Mr. Hallman has been President of The Hallman Group, a management
consulting firm, since October 1992. Mr. Hallman was President and Chief
Operating Officer of Microsoft Corporation from March 1990 through April 1992,
and a consultant to Microsoft through September 1992. Mr. Hallman is also a
director of In Focus Systems, Inc. (which makes computer-operated projection
products), Key Tronic Corporation (a computer keyboard company), and Network
Appliance, Inc. (which makes network data storage products). Mr. Hallman holds a
Bachelors degree in business and a Masters in Business Administration from the
University of Michigan.
Mr. Harris became President and Chief Executive Officer of Intuit in August 1998
and joined Intuit's Board of Directors in May 1998. He joined Intuit as
Executive Vice President in December 1993, in connection with Intuit's
acquisition of ChipSoft, and served in that capacity through July 1998. He was
responsible for Intuit's tax and consumer finance businesses from July 1996
through July 1998. From January 1992 to December 1993, Mr. Harris served as
President and Chief Operating Officer of ChipSoft. Mr. Harris earned a Bachelor
of Arts degree in American Studies from Middlebury College in Vermont and a
Masters in Business Administration from Harvard University.
Mr. McMurtry has been a director of Intuit since August 1990. Since July 1980,
he has been a general partner of various limited partnerships that, in turn, are
general partners of various Technology Venture Investors venture capital
partnerships. Mr. McMurtry is also a director of Aradigm Corporation (which
develops pulmonary drug delivery systems) and SpectraLink Corporation (which
makes wireless telephone systems). Mr. McMurtry holds Bachelor of Arts and
Bachelor of Science degrees in electrical engineering from Rice University and
Master of Science and Ph.D. degrees in electrical engineering from Stanford
University.
BOARD OF DIRECTORS MEETINGS, COMMITTEES AND COMPENSATION
The Board of Directors met 6 times and acted by written consent 10 times during
fiscal 1998. During fiscal 1998, all directors attended at least 75% of the
meetings of the Board and of the committees on which he served, except that Mr.
Harris attended only 2 of the 3 Board meetings held while he was serving on the
Board during fiscal 1998.
The Board has four committees -- an Audit Committee, a Compensation Committee,
an Executive Committee and a Nominating Committee.
Mr. Brody and Mr. McMurtry are currently the members of the Audit Committee and
served on the Audit Committee throughout fiscal 1998. The Audit Committee met 6
times during fiscal 1998. The Audit Committee reviews Intuit's financial
statements, meets with Intuit's independent accountants to review the adequacy
of Intuit's internal control systems and financial reporting procedures, reviews
the general scope of Intuit's annual audit and the fees charged by the
independent accountants, and reviews and monitors the performance of non-audit
services by Intuit's auditors. The Audit Committee also reviews the fairness of
any proposed transaction between Intuit and any member of Intuit's management
(except for transactions that are reviewed by the Compensation Committee) and
makes recommendations to the full Board on these matters.
Mr. Doerr and Mr. Hallman are currently the voting members of the Compensation
Committee. Both members served on the Compensation Committee throughout fiscal
1998, except that Mr. McMurtry served during Mr. Doerr's absence from July 1,
1998 through the end of fiscal 1998. Since August 1, 1998, Mr. Campbell has been
a non-voting advisory member of the Compensation Committee. The Compensation
Committee met 4 times and acted by written consent 15 times during fiscal 1998.
The Compensation Committee determines general compensation policies for Intuit,
as well as specific compensation for all executive officers of Intuit. The
Committee also administers Intuit's 1993 Equity Incentive Plan and other option
plans and its 1996 Employee Stock Purchase Plan.
Mr. Campbell, Mr. Cook and Mr. Harris are currently the members of the Executive
Committee. The Executive Committee was established on July 28, 1998 and did not
meet during fiscal 1998. The Executive Committee serves as an administrative
committee of the Board of Directors to facilitate the approval of certain
corporate actions that do not require consideration by the full Board.
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Mr. Brody and Mr. Cook are currently the members of the Nominating Committee.
The Nominating Committee met twice during fiscal 1998. The Nominating Committee
identifies and evaluates potential new Board members and provides information
for the full Board to consider. The Nominating Committee is not presently
considering nominee recommendations from security holders.
Directors are not paid for their services on the Board or any committee (other
than reimbursement for expenses), except that non-employee directors participate
in the 1996 Directors Stock Option Plan. Under this plan, Mr. Brody, Mr. Doerr,
Mr. Hallman and Mr. McMurtry each received option grants for 7,500 shares at an
exercise price of $27.31 per share during fiscal 1998. See page 11 for details
about this plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1998, all members of the Compensation Committee (Mr. Doerr, Mr.
Hallman and Mr. McMurtry) were directors of the Company who were not current or
former officers or employees of Intuit or of any Intuit subsidiary. Effective
August 1, 1998, William Campbell, Chairman of the Board and the former President
and Chief Executive Officer of Intuit, joined the Committee as a non-voting
advisory member. None of the members of the Compensation Committee have any
"interlocking" relationships as defined by the Securities and Exchange
Commission, in that none of them serve on the Board of Directors or Compensation
Committee of any other company where an executive officer of that company is on
the Board or Compensation Committee of Intuit. See "Certain Relationships and
Related Transactions," on page 22, for information about a transaction involving
the Company and certain entities affiliated with Mr. Doerr.
PROPOSAL NO. 2 -- AMENDMENT TO 1993 EQUITY INCENTIVE PLAN
TO ADD 2,640,000 AUTHORIZED SHARES
We are asking stockholders to approve an amendment to the Intuit Inc. 1993
Equity Incentive Plan (the "Equity Plan") to increase the number of shares of
Common Stock that are authorized and reserved for issuance under the Equity Plan
by 2,640,000 shares (from 13,105,000 shares to 15,745,000 shares). The Equity
Plan is an important part of our compensation program and we believe it is
essential to our ability to attract and retain highly qualified employees in an
extremely competitive environment in which employees view equity incentives as
an increasingly important component of their compensation. The proposed
amendment to the Equity Plan is necessary to enable us to continue providing
stock-based compensation to new and current employees. The closing price of
Intuit's Common Stock on the Nasdaq National Market on November 19, 1998 was
$60.00. The Equity Plan is described in detail below.
VOTE REQUIRED FOR APPROVAL
Approval of this amendment to the Equity Plan requires the affirmative vote of a
majority of shares of Common Stock that are voted for or against the Proposal.
Intuit's executive officers and directors have an interest in approval of this
Proposal because they, along with all other individuals eligible to participate
in the Equity Plan, will be eligible for grants of options and other awards
under the Equity Plan from the additional 2,640,000 shares.
THEBOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE
PROPOSED AMENDMENT TO THE 1993 EQUITY INCENTIVE PLAN.
EQUITY PLAN BACKGROUND
The Equity Plan allows us to grant options and other stock-based compensation to
eligible employees. The Equity Plan was adopted on February 1, 1993 and has a
ten-year term. The Equity Plan has been amended four times in the past to
increase the number of shares authorized for issuance. It was also amended in
March 1994 to bring the Equity Plan into compliance with Section 162(m) of the
Internal Revenue Code of 1986 and to expand the types of awards that are
available under the Equity Plan to include performance awards payable in cash or
in Common Stock. In addition, it was amended in April 1998 to make a number of
amendments relating to administration of the Equity Plan. On October 28, 1998,
the Board of Directors approved an amendment to the Equity Plan, subject to
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stockholder approval, to increase the number of shares of Intuit's Common Stock
authorized for issuance under the Equity Plan from 13,105,000 shares to
15,745,000 shares. This is the amendment that we are asking stockholders to
approve in Proposal No. 2.
The Equity Plan is currently administered by the Compensation Committee. Within
the guidelines of the Equity Plan, the Committee determines which eligible
participants will receive awards, the number of shares or amount of cash for
each award and other terms and conditions of the awards. The Committee also
interprets the provisions of the Equity Plan and awards granted. From September
1994 through July 1998, the Committee delegated to Mr. Campbell the authority to
grant stock options to non-officer employees or consultants, in accordance with
Intuit's option award guidelines, and up to certain annual and aggregate limits.
Since August 1998, when Mr. Campbell became Chairman of the Board and Mr. Harris
became President and Chief Executive Officer, Mr. Campbell and Mr. Harris,
acting jointly, have held that option granting authority.
From the adoption of the Equity Plan through October 31, 1998, a total of
15,956,278 stock options have been granted, including options that were later
terminated before they were exercised. (If any option or other award terminates
without being exercised or issued, then the shares covered by the terminated
option or award generally go back into the Equity Plan for future grants or
awards.) Since adoption of the Equity Plan, the following "Named Officers" (see
page 16 for a definition of this term) have received options under the Equity
Plan: William V. Campbell -- 1,225,000 shares; William H. Harris, Jr. -- 612,500
shares; Scott D. Cook -- 250,000 shares; David A. Kinser -- 175,000 shares; and
Raymond G. Stern -- 140,000 shares. During the same time period, Intuit's
current executive officers, as a group (14 people), received options to purchase
a total of 3,557,814 shares under the Equity Plan, and all employees and
consultants other than the current executive officers received options to
purchase a total of 12,398,464 shares under the Equity Plan. No non-employee
directors have received any options under the Equity Plan. As of October 31,
1998, 2,941,388 shares had been issued on exercise of options, there were
9,559,658 awards outstanding, and there were 590,880 shares available for future
awards (not including the 2,640,000 shares for which we are seeking stockholder
approval). No other types of awards have been granted under the Equity Plan
since its adoption.
ELIGIBILITY
Employees, officers, directors, independent contractors, consultants, and
advisors of Intuit and its affiliates and majority-owned subsidiaries are
eligible to receive awards under the Equity Plan. Only employees can receive
incentive stock options (described below). As of October 31, 1998, approximately
3,500 individuals were eligible to participate in the Equity Plan, and 2,900
held outstanding options. Participants are not required to pay for any awards
granted to them, other than paying the exercise price if they exercise options
granted to them or the purchase price for restricted stock awards. A participant
may receive a maximum of 2,000,000 shares of Common Stock under the Equity Plan
during the life of the Equity Plan.
TYPES OF AWARDS
Four types of awards -- stock options, restricted stock awards, stock bonus
awards and performance awards -- can be granted under the Equity Plan.
Stock Options. Two types of stock options can be granted under the Equity Plan -
Incentive Stock Options (called "ISOs") and Nonqualified Stock Options (called
"NQSOs"). The option exercise price for each ISO must be no less than the "fair
market value" of a share of Intuit Common Stock at the time the option is
granted (generally, the closing price on the Nasdaq National Market). For
stockholders who hold 10% or more of our Common Stock, the exercise price of an
ISO must be at least 110% of the fair market value. The option exercise price
for each NQSO may be less than fair market value. However, we generally do not
grant NQSOs below fair market value. The exercise price is paid to Intuit when
the option is exercised. Various payment methods are permitted under the Equity
Plan, including cash and "same-day sale" or margin commitments from NASD
brokers.
The Compensation Committee (or its delegees) determines vesting and other terms
of options when they are granted. Options for most employees generally become
exercisable over a period of four years at a rate of 25% on the first
anniversary of the grant, and an additional 2.0833% per month over the next
three years, although some outstanding options (primarily those held by
officers) vest at different rates. Options generally have a term of ten years
from the date of grant, but terminate earlier if the participant leaves Intuit.
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Restricted Stock Awards and Stock Bonus Awards. Restricted stock awards allow
participants to purchase shares of stock if certain goals are met. The purchase
price may be less than fair market value. Stock bonus awards allow participants
to receive shares without any payment, either as compensation for past services
to Intuit or if certain goals are met. Stock bonus awards can also be paid in
cash (equal to the fair market value of the stock when the award is paid).
Various types of goals may be established by the Compensation Committee,
including completion of a certain number of years of service with Intuit,
completion of individual performance goals, and achievement of company-wide
financial performance goals relating to net revenue, operating income, net
income, earnings per share or other financial measures. No restricted stock or
stock bonus award to any individual participant can exceed 30% of the total
shares reserved under the Equity Plan.
Performance Awards. A performance award is a grant of a specific number of
performance "units." Each unit allows the participant to receive a specified
cash payment (or shares of stock with an equivalent value) if the performance
goals specified in the performance award are achieved. No performance award to
any individual participant can exceed 250% of the participant's base salary at
the time of the award, or $1,000,000, whichever is less. The performance factors
that can be used for performance awards are the same as those used for
restricted stock and stock bonus awards.
MERGERS, CONSOLIDATIONS AND OTHER CORPORATE TRANSACTIONS
If Intuit is involved in a merger, consolidation, dissolution, liquidation, sale
of assets or any other similar corporate transaction in which Intuit does not
continue to exist, or a merger where Intuit's pre-merger stockholders own less
than a majority of the shares, any successor company may, but is not required
to, assume responsibility for outstanding awards under the Equity Plan,
substitute equivalent awards in exchange for outstanding awards, or compensate
participants in some other manner. If the successor corporation does not assume
or substitute awards, then all outstanding awards will terminate when the
transaction occurs.
EQUITY PLAN AMENDMENTS
The Board (and in certain instances, the Compensation Committee of the Board)
may generally terminate or amend the Equity Plan or any form of award agreement
used under the Equity Plan at any time. However, neither the Board nor the
Compensation Committee may amend the Equity Plan in any manner that requires
stockholder approval under the Internal Revenue Code of 1986 (referred to as the
"Tax Code"), without stockholder approval, and outstanding awards may not be
amended without the consent of the participant.
FEDERAL INCOME TAX INFORMATION
The following information is a general summary of some of the current federal
income tax consequences of the Equity Plan to participants and to Intuit. Tax
laws may change, and actual tax consequences will depend on a participant's
individual circumstances as well as state and local tax laws. We encourage all
participants to seek tax advice when they participate in the Equity Plan.
Tax Treatment of Participants -- Incentive Stock Options. A participant
generally will not recognize any income when an ISO is granted, and will not
incur any tax when the option is exercised unless the participant is subject to
the alternative minimum tax. If the participant exercises an ISO and holds the
shares for more than one year after exercise and for more than two years after
the date the option was granted, the participant generally will realize
long-term capital gain or loss, rather than ordinary income or loss, when he or
she sells the shares. The gain or loss will be the difference between the amount
received from the sale and the amount paid for the shares. If the participant
sells the shares less than a year after exercise or two years after grant, the
participant will generally realize ordinary income to the extent the fair market
value of the shares on the date of exercise exceeds the exercise price (referred
to as the "Spread"). Any additional gain, or any loss, as applicable, will be a
capital gain or loss, taxable at short-term capital gain rates if the shares are
held twelve months or less and at long-term capital gain rates if the shares are
held longer than twelve months.
Tax Treatment of Participants -- Other Awards. A participant generally will not
recognize any income when an NQSO is granted. When a participant exercises an
NQSO, the Spread must be recognized as ordinary income.
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Intuit will withhold tax on this income when an NQSO is exercised by a
participant who is a current or former employee of Intuit. When the participant
sells the shares, any additional gain or loss will be a capital gain or loss.
Participants will generally be taxed on restricted stock, stock bonus awards and
performance awards when they receive stock or cash, unless there are
restrictions on the shares that enable the participant to elect to defer the
tax.
Tax Treatment of Intuit. When a participant recognizes ordinary income on
exercise of an NQSO or on receipt of restricted stock, a stock bonus or a
performance award, Intuit will generally be entitled to a tax deduction in the
amount of the ordinary income. Intuit will also be entitled to a deduction if a
participant recognizes ordinary income by selling shares acquired on exercise of
an ISO before the one-year or two-year holding period ends.
1998 OPTION PLAN FOR MERGERS AND ACQUISITIONS
On November 11, 1998, our Board of Directors adopted the 1998 Option Plan for
Mergers and Acquisitions (the "1998 Plan") for grants of non-qualified stock
options to individuals who are hired as a result of acquisitions of, or mergers
with, other companies by Intuit. The 1998 Plan has been designed to meet the
"broadly based plans" exemption from the stockholder approval requirement for
stock option plans under the Nasdaq National Market listing requirements.
Options under the 1998 Plan can only be granted to eligible individuals within
18 months following the completion of the relevant acquisition or merger.
Options granted under the 1998 Plan will have an exercise price not less than
the fair market value of Intuit's Common Stock on the date of grant. They will
generally become exercisable over a four-year period based on continued service
and expire ten years after the grant date. Options granted to officers hired as
a result of a merger or acquisition cannot exceed 45% of all shares reserved for
grant under the 1998 Plan. Other terms and conditions of the 1998 Plan are
substantially the same as the Equity Plan except that only non-qualified stock
options can be granted under the 1998 Plan, the 1998 Plan does not comply with
the requirements for tax deductibility under Section 162(m) of the Tax Code, and
adoption of and amendments to the 1998 Plan do not require approval of Intuit
stockholders. Our Board has reserved 1,000,000 shares for issuance under the
1998 Plan, but has not yet granted any options.
8
<PAGE> 11
PROPOSAL NO. 3 -- AMENDMENT TO 1996 EMPLOYEE STOCK PURCHASE
PLAN TO ADD 300,000 AUTHORIZED SHARES
We are asking stockholders to approve an amendment to the Intuit Inc. 1996
Employee Stock Purchase Plan (the "Purchase Plan") to increase the number of
shares of Common Stock that are authorized and reserved for issuance under the
Purchase Plan by 300,000 shares (from 500,000 shares to 800,000 shares). The
purpose of the Purchase Plan is to offer employees of Intuit and some of its
subsidiaries a convenient way to purchase shares of Intuit stock at a discounted
price through payroll deductions. The Purchase Plan is an important part of
Intuit's compensation program, and this proposed amendment to the Purchase Plan
is necessary to enable us to continue providing this benefit to new and current
employees. The closing price of Intuit's Common Stock on the Nasdaq National
Market on November 19, 1998 was $60.00. The Purchase Plan is described in detail
below.
VOTE REQUIRED FOR APPROVAL
Approval of this amendment requires the affirmative vote of a majority of shares
of Common Stock that are voted for or against the Proposal. Intuit's executive
officers have an interest in approval of this Proposal because they, along with
all other individuals eligible to participate in the Purchase Plan, will be able
to continue purchasing shares of Intuit stock under the favorable terms provided
by the Purchase Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE
PROPOSED AMENDMENT TO THE 1996 EMPLOYEE STOCK PURCHASE PLAN.
PURCHASE PLAN BACKGROUND
The Purchase Plan enables employees to purchase shares of Intuit stock during
six-month offering periods at a discounted price based on the market value of
the stock at the beginning or end of the offering period. See "Offering Periods"
below. The Purchase Plan was adopted on October 7, 1996 and has a ten-year term.
The Purchase Plan was amended during fiscal 1997 to change the beginning dates
for future Offering Periods and to clarify certain eligibility requirements. The
Purchase Plan was also amended in January 1998 to increase the shares available
for issuance under the Purchase Plan by 200,000 shares. On October 28, 1998, the
Board of Directors approved an amendment to the Purchase Plan, subject to
stockholder approval, to increase the number of shares of Intuit's Common Stock
authorized for issuance under the Purchase Plan from 500,000 to 800,000 shares.
This is the amendment that we are asking stockholders to approve in Proposal No.
3. The Purchase Plan is administered by the Compensation Committee of the Board
of Directors, which is responsible for interpreting the provisions of the
Purchase Plan.
From the adoption of the Purchase Plan through October 31, 1998, a total of
244,277 shares have been purchased. During this period, none of the "Named
Officers" (see page 16 for a definition of this term) purchased shares under the
Purchase Plan, Intuit's current executive officers, as a group (14 people),
purchased a total of 1,821 shares, and all employees other than the current
executive officers purchased a total of 242,456 shares.
ELIGIBILITY
Employees of Intuit and certain subsidiaries (other than stockholders who own 5%
or more of our Common Stock) are generally eligible to participate in the
Purchase Plan if they work at least 20 hours per week and at least 5 months per
year. As of October 31, 1998, approximately 3,200 employees were eligible to
participate in the Purchase Plan, and approximately 1,300 employees were
participating. Participants are not required to pay to participate in the
Purchase Plan, other than paying the purchase price for the shares they
purchase.
OFFERING PERIODS
Each offering of Intuit stock under the Purchase Plan is generally for a period
of six months (referred to as an "Offering Period"). Offering Periods currently
run from June 16 through December 15 and from December 16 through June 15.
However, the initial Offering Period was January 1, 1997 through June 30, 1997
and the second Offering Period was from July 1, 1997 through December 15, 1997.
The Board can change the duration of Offering Periods for future offerings at
least 15 days prior to the scheduled beginning of the first Offering Period to
be
9
<PAGE> 12
affected. The first day of each Offering Period is called the "Offering Date,"
and the last day of each Offering Period is the called the "Purchase Date."
PAYROLL DEDUCTIONS, PURCHASE PRICE AND AMOUNT OF STOCK PURCHASED
Employees participate in the Purchase Plan through payroll deductions. Employees
can generally select payroll deduction rates in 1% increments from 2% to 10%,
but no participant can purchase more than $25,000 of stock (based on fair market
value) under the Purchase Plan during any calendar year. An employee can
decrease the payroll deduction rate one time during an Offering Period, but the
rate can't be increased during the Offering Period. After a participant enrolls
in the Purchase Plan, the participant is automatically enrolled in subsequent
Offering Periods unless the participant actively withdraws from the Purchase
Plan. A participant may withdraw from any Offering Period up to 15 days before
the end of the Offering Period. Accumulated payroll deductions will be returned
to a participant that withdraws from the Purchase Plan. No interest accrues on
payroll deductions.
When a participant enrolls in the Purchase Plan, the participant essentially
receives an option to purchase shares on the Purchase Date at a purchase price
equal to 85% of the fair market value of the shares on the Offering Date or the
Purchase Date, whichever is lower. Unless the participant withdraws from the
Purchase Plan, the purchase will take place automatically on the Purchase Date.
The number of shares a participant will be able to purchase on the Purchase Date
will generally be equal to the payroll deductions during the Offering Period,
divided by the purchase price. However, no participant will be permitted to
purchase more than two times the number of shares that he or she could have
purchased if the number of shares was determined by using a purchase price of
85% of the fair market value on the Offering Date. In addition, the Compensation
Committee may set a maximum number of shares that may be purchased by any
participant on any Purchase Date.
MERGERS, CONSOLIDATIONS AND OTHER CORPORATE TRANSACTIONS
If Intuit is dissolved or liquidated, the current Offering Period will terminate
immediately prior to the liquidation or dissolution unless the Board decides
otherwise. The Board may, but is not required to, designate a date for the
options to terminate and allow each participant to purchase shares with
accumulated payroll deductions. If Intuit sells most of its assets or is
involved in a merger with another corporation, each option under the Purchase
Plan will be assumed or an equivalent option will be substituted by the
successor corporation, unless the Board decides that participants will be
permitted to exercise their options to purchase shares.
PURCHASE PLAN AMENDMENTS
The Board may generally amend or terminate the Purchase Plan at any time.
However, the Board may not amend the Purchase Plan without stockholder approval
if the amendment would increase the number of shares available under the
Purchase Plan or change the eligibility requirements. In addition, the Board may
not make any changes that affect existing purchase rights without the consent of
the participants.
FEDERAL INCOME TAX INFORMATION
The following information is a general summary of some of the current federal
income tax consequences of the Purchase Plan to participants and to Intuit. Tax
laws may change, and actual tax consequences will depend on a participant's
individual circumstances as well as state and local tax laws. We encourage all
participants to seek tax advice when they participate in the Purchase Plan. The
Purchase Plan is intended to qualify as an "employee stock purchase plan" under
Section 423 of the Tax Code.
Tax Treatment of Participants. Participants will not recognize income when they
enroll in the Purchase Plan or when they purchase shares. All tax consequences
are deferred until the participant disposes of the shares. If the participant
holds the shares for more than one year after the Purchase Date and more than
two years after the Offering Date, or if the participant dies while owning the
shares, the participant will generally realize ordinary income when disposing of
the shares equal to the difference between the purchase price and the fair
market value of the shares on the date of disposition, or 15% of the fair market
value of the shares on the Offering Date, whichever
10
<PAGE> 13
is less. Any additional gain will be taxed as long-term capital gain. If the
shares are sold for less than the purchase price, there is no ordinary income,
but the participant will have a long-term capital loss for the difference
between the purchase price and the sale price. If a participant sells or makes a
gift of the shares less than one year after the Purchase Date or less than two
years after the Offering Date, the participant will generally have ordinary
income equal to the difference between the purchase price and the fair market
value on the Purchase Date. The difference between the sale price and the fair
market value on the Purchase Date will be a capital gain or loss, taxable at
short-term capital gain rates if the shares are held twelve months or less and
at long-term capital gain rates if the shares are held longer than twelve
months.
Tax Treatment of Intuit. When a participant recognizes ordinary income by
disposing of shares before the one-year or two-year holding period ends, Intuit
will generally be entitled to a tax deduction in the amount of the ordinary
income.
PROPOSAL NO. 4 -- AMENDMENT TO 1996 DIRECTORS STOCK OPTION PLAN
TO ADD 30,000 AUTHORIZED SHARES
We are asking stockholders to approve an amendment to the Intuit Inc. 1996
Directors Stock Option Plan (the "Directors Plan") to increase the number of
shares of Common Stock that are authorized and reserved for issuance under the
Directors Plan by 30,000 shares (from 165,000 shares to 195,000 shares). The
Directors Plan gives non-employee directors of Intuit an opportunity to acquire
an equity interest in Intuit and helps to align their interests with the
interests of Intuit's stockholders. Unlike many other companies in the software
industry, Intuit does not currently compensate its outside directors for their
services. This means that the Directors Plan is particularly important in
helping us to attract and retain well-qualified directors. The current
non-employee directors receive options under the Directors Plan for a specified
number of shares on a regular, annual schedule. The closing price of Intuit's
Common Stock on the Nasdaq National Market on November 19, 1998 was $60.00. The
Directors Plan is described in detail below.
VOTE REQUIRED FOR APPROVAL
Approval of this amendment requires the affirmative vote of a majority of shares
of Common Stock that are voted for or against the Proposal. Intuit's
non-employee directors (and any associates to whom they may assign the economic
benefit of their options) have an interest in approval of this Proposal because
the non-employee directors will be eligible for grants of options from the
additional 30,000 shares.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE
PROPOSED AMENDMENT TO THE 1996 DIRECTORS STOCK OPTION PLAN.
DIRECTORS PLAN BACKGROUND
The Directors Plan was adopted on October 7, 1996 and has a ten-year term. In
January 1998, the Directors Plan was amended to increase the shares available
for issuance under the Directors Plan by 45,000 shares. On October 28, 1998, the
Board of Directors approved an amendment to the Directors Plan, subject to
stockholder approval, to increase the number of shares of Intuit's Common Stock
authorized for issuance under the Directors Plan from 165,000 to 195,000 shares.
This is the amendment that we are asking stockholders to approve in Proposal No.
4. Since the adoption of the Directors Plan, we have granted options with
respect to 120,000 shares (representing options for 30,000 shares to each of Mr.
Brody, Mr. Doerr, Mr. Hallman and Mr. McMurtry), all of which are currently
outstanding. No options have been granted to individuals other than non-employee
directors, as indicated below. If any option terminates without being exercised,
then the shares covered by the terminated option go back into the Directors Plan
for future grants. The Directors Plan is administered by the Compensation
Committee of the Board, which is responsible for interpreting the provisions of
the Directors Plan.
11
<PAGE> 14
ELIGIBILITY
Under the Directors Plan, we grant non-qualified stock options to purchase
shares of Intuit Common Stock to each non-employee director according to a fixed
formula that is described below. There are currently four non-employee
directors. No other individuals are eligible to participate in the Directors
Plan. Directors are not required to pay to participate in the Directors Plan,
other than paying the exercise price for the options they exercise. Various
payment methods are permitted under the Directors Plan, including cash and
"same-day sale" or margin commitments from NASD brokers.
FORMULA FOR OPTION GRANTS
We grant options to eligible directors under the Directors Plan according to a
fixed, nondiscretionary formula. On November 25, 1996, immediately after the
Directors Plan was approved by the stockholders, each of our four non-employee
directors received an initial grant for 15,000 shares. Any new non-employee
director who joins the Board in the future and is eligible to participate in the
Directors Plan will also receive an initial grant of 15,000 shares when joining
the Board. In addition, on each anniversary of an initial grant, if the director
is still a member of the Board, he or she will receive an additional grant for
7,500 shares. Our four non-employee directors each received additional grants of
7,500 shares on November 25, 1997 and on November 25, 1998.
EXERCISE PRICE, VESTING AND OTHER TERMS
The exercise price for each option will be the fair market value of Intuit's
Common Stock at the time the option is granted. Options become exercisable over
a period of four years at a rate of 25% on the first anniversary of the grant,
and an additional 2.0833% per month over the next three years. Options have a
term of ten years from the date of grant, but they terminate earlier if the
director is no longer a director or consultant to Intuit.
MERGERS, CONSOLIDATIONS AND CHANGES OF CONTROL
If Intuit is liquidated, is involved in a merger (where Intuit is not the
surviving corporation or where Intuit's pre-merger stockholders own less than a
majority of the shares), sells substantially all of its assets or is involved in
a tender offer or similar transaction covering a majority of its shares, the
vesting of all options granted under the Directors Plan will accelerate and the
options will become fully exercisable on the terms and conditions determined by
the Board.
DIRECTORS PLAN AMENDMENTS
Generally, the Board may amend or terminate the Directors Plan at any time.
However, the Board may not amend the Directors Plan without stockholder approval
if the amendment would increase the number of shares available under the
Directors Plan or change the eligibility requirements. In addition, the Board
may not make any changes that affect outstanding options without the consent of
the participants.
FEDERAL INCOME TAX INFORMATION
All options granted under the Directors Plan are non-qualified stock options.
The tax treatment for participants and Intuit is the same as for NQSOs under the
Equity Plan (see page 8).
12
<PAGE> 15
NEW PLAN BENEFITS
The following table shows all expected fiscal 1999 option grants under the
Directors Plan for the "Named Officers" (defined on page 16) and for the groups
of people indicated. All currently expected fiscal 1999 grants were made on
November 25, 1998 with an exercise price equal to the closing price of Intuit's
Common Stock on that date. During fiscal 1998, grants with respect to 30,000
shares were made to directors who are not officers of the Company. No grants
will be made during fiscal 1999 to any individuals other than non-employee
directors. Future awards and purchases under the Equity Plan and the Purchase
Plan are not included in the table because we can't determine them currently.
Awards under the Equity Plan are made at the discretion of the Compensation
Committee, and grants and purchases by employees under the Purchase Plan are
voluntary.
<TABLE>
<CAPTION>
EXERCISE PRICE NUMBER
NAME AND POSITION (PER SHARE) OF SHARES
--------------------- -------------- ---------
<S> <C> <C>
William V. Campbell
Chairman -- --
William H. Harris, Jr.
President and Chief -- --
Executive Officer
Scott D. Cook
Chairman of the Executive -- --
Committee of the Board of
Directors
David A. Kinser
Senior Vice President -- --
Raymond G. Stern
Senior Vice President -- --
All current executive
officers as a group (14 people) -- --
All current directors who
are not executive officers
as a group (4 people) $58.50 30,000
All employees, including
officers who are not
executive officers, as a group -- --
</TABLE>
PROPOSAL NO. 5 -- RATIFICATION OF SELECTION OF
INDEPENDENT AUDITORS
We have selected Ernst & Young LLP as our independent auditors to perform the
audit of Intuit's financial statements for the fiscal year ending July 31, 1999,
and we are asking stockholders to ratify our selection. Representatives of Ernst
& Young LLP are expected to be present at the Meeting. They will have the
opportunity to make a statement at the Meeting if they wish to do so, and they
will be available to respond to appropriate questions from stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF
THE SELECTION OF ERNST & YOUNG LLP.
13
<PAGE> 16
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows shares of Intuit's Common Stock that we believe are
owned as of October 31, 1998 by (i) each stockholder owning 5% or more of the
Common Stock, (ii) each director, (iii) each Named Officer (defined on page 16)
and (iv) all current directors and executive officers as a group. We have
included in shares owned by each stockholder all options held by the stockholder
that are exercisable within 60 days of October 31, 1998 (which would be December
30, 1998).
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME OF BENEFICIAL OWNERSHIP PERCENT OF
BENEFICIAL OWNER (1) CLASS
------------------------------------------------- -------------------- ----------
<S> <C> <C>
Scott D. Cook(2) ................................ 6,874,144 11.5
Putnam Investments, Inc.(3) ..................... 5,875,844 9.9
Janus Capital Corporation(4) .................... 4,714,765 7.9
Capital Research and Management Company(5) ...... 4,711,600 7.9
Alliance Capital Management L.P.(6) ............. 3,602,200 6.1
William V. Campbell(7) .......................... 733,925 1.2
William H. Harris, Jr.(8) ....................... 258,333 *
Burton J. McMurtry(9) ........................... 120,529 *
L. John Doerr(10) ............................... 85,520 *
David A. Kinser(11) ............................. 61,145 *
Christopher W. Brody(12) ........................ 60,343 *
Michael R. Hallman(13) .......................... 56,319 *
Raymond G. Stern(14) ............................ 55,416 *
All current directors and executive
officers as a group (18 people)(15) ........... 8,721,430 14.7
</TABLE>
- -------------------
* Indicates ownership of less than 1%.
1. Unless indicated in the notes, each stockholder has sole voting and
investment power for all shares shown, subject to community property laws
that may apply to create shared voting and investment power.
2. Mr. Cook is Chairman of the Executive Committee of Intuit's Board of
Directors. His address is 2535 Garcia Avenue, Mountain View, California
94043. The shares listed in the table include 6,790,811 shares held by
trusts of which Mr. Cook is a co-trustee. The remaining 83,333 shares
represent shares issuable upon exercise of options held by Mr. Cook.
3. The address of Putnam Investments, Inc. ("PI") is One Post Office Square,
Boston, Massachusetts 02109. The shares reported represent aggregate shares
owned by PI, Marsh & McLennan Companies, Inc. ("M&Mc"), Putnam Investment
Management, Inc. ("Putnam Management") and the Putnam Advisory Company,
Inc. ("Putnam Advisory") as reported on a Schedule 13G filed by PI with the
SEC as of October 9, 1998. As reported in PI's Schedule 13G, securities
reported on the Schedule 13G as being beneficially owned by M&Mc and PI
consist of securities beneficially owned by subsidiaries of PI, which in
turn include securities beneficially owned by clients of such subsidiaries.
PI, which is a wholly-owned subsidiary of M&Mc, wholly owns two other
subsidiaries, Putnam Management and Putnam Advisory. Both subsidiaries have
depository power over the shares as investment managers, but each of the
mutual fund's trustees have voting power over the shares held by each fund,
and Putnam Advisory has shared voting power over the shares held by the
institutional clients of the fund. The Schedule 13G includes a disclaimer
by both PI an M&Mc that the filing is not an admission by either or both of
them that they are, for the purposes of Section 13(d) and 13(g) the
beneficial owner of any securities covered by the Schedule 13G, and that
neither of them has any power to vote or dispose of, or direct the voting
or disposition of, any of the securities covered by the Schedule 13G.
4. The address of Janus Capital Corporation ("Janus") is 100 Fillmore Street,
Denver, Colorado 80206-4928. We obtained information about shares owned by
this stockholder from a Schedule 13F filed by this stockholder with
14
<PAGE> 17
the SEC as of June 30, 1998. Janus Capital Corporation reported that it has
shared investment discretion and voting authority regarding these shares.
5. The address of Capital Research and Management Company ("CRM") is 333 South
Hope Street, 55th Floor, Los Angeles, California 90071. We obtained
information about shares owned by this stockholder from a Schedule 13G
filed by this stockholder with the SEC as of July 9, 1998. As reported in
CRM's Schedule 13G, CRM is deemed to be the beneficial owner of all shares
reported as a result of acting as investment adviser to various investment
companies registered under Section 8 of the Investment Company Act of 1940.
6. The address of Alliance Capital Management L.P. ("Alliance") is 1345 Avenue
of the Americas, 31st Floor, New York, New York, 10105. We obtained
information about shares owned by this stockholder from a Schedule 13F
filed by this stockholder with the SEC as of June 30, 1998. Alliance
reported that it had sole investment discretion regarding these shares and
had sole voting authority as to 1,314,900 shares, shared voting authority
as to 2,284,300 shares and no voting authority as to 3,000 shares.
7. Mr. Campbell is Chairman of the Board of Directors of Intuit. The shares
listed in the table represent shares issuable upon exercise of options held
by Mr. Campbell.
8. Mr. Harris is President and Chief Executive Officer of Intuit and a
director of Intuit. The shares listed in the table represent shares
issuable upon exercise of options held by Mr. Harris.
9. Mr. McMurtry is a director of Intuit. The shares listed in the table
include 110,686 shares held by a trust of which Mr. McMurtry is a
co-trustee. The remaining 9,843 shares represent shares issuable upon
exercise of options held by Mr. McMurtry.
10. Mr. Doerr is a director of Intuit. The shares listed in the table include
9,843 shares issuable upon exercise of options held by Mr. Doerr.
11. Mr. Kinser is a Senior Vice President of Intuit. The shares listed in the
table represent shares issuable upon exercise of options held by Mr.
Kinser.
12. Mr. Brody is a director of Intuit. The shares listed in the table include
9,843 shares issuable upon exercise of options held by Mr. Brody. Mr. Brody
has assigned the economic benefit of the options to E. M. Warburg Pincus &
Co., LLC, where he is a managing director.
13. Mr. Hallman is a director of Intuit. The shares listed in the table include
24,443 shares issuable upon exercise of options held by Mr. Hallman.
14. Mr. Stern is a Senior Vice President of Intuit. The shares listed in the
table represent shares issuable upon exercise of options held by Mr. Stern.
15. The shares listed in the table include 1,642,118 shares issuable upon
exercise of options. The total reflects all shares and options held by
individuals described in Notes 2 and 7 through 14, plus an additional
19,762 shares and 395,994 options.
15
<PAGE> 18
EXECUTIVE COMPENSATION
The following table shows compensation earned during fiscal 1996, 1997 and 1998
by Intuit's Chief Executive Officer and Intuit's four most highly-compensated
executive officers for fiscal 1998, other than the Chief Executive Officer.
These people are referred to as the "Named Officers." Titles shown in the table
are titles held during fiscal 1998. Effective August 1, 1998, Mr. Campbell
became Chairman of the Board, Mr. Cook became Chairman of the Executive
Committee of the Board and Mr. Harris became President and Chief Executive
Officer. See pages 3-4 for more details. Mr. Kinser joined Intuit during fiscal
1997 and Mr. Stern joined Intuit during fiscal 1998. The information in the
table includes salaries, bonuses, performance sharing, stock options granted and
other miscellaneous compensation. Intuit has not granted stock appreciation
rights or restricted stock awards and has no long-term compensation benefits
other than stock options. For information about employment contracts and
termination or change-of-control arrangements between Intuit and the Named
Officers, see pages 16-17, and Note 1 to the table on page 17.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------------------------------- -----------
SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND FISCAL BONUS COMPENSATION OPTIONS COMPENSATION
FY98 PRINCIPAL POSITION YEAR SALARY($) ($)(1) ($)(2) (#)(3) ($)(4)
------------------------ -------- --------- -------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
William V. Campbell 1998 $489,981 $516,424 -- -- $ --
President and 1997 372,246 491,748 -- 575,000 --
Chief Executive Officer 1996 355,884 -- -- 50,000 --
Scott D. Cook 1998 361,731 251,771 250,000 --
Chairman of the Board 1997 292,246 88,135 -- -- --
1996 275,596 -- -- -- --
William H. Harris, Jr 1998 386,827 217,803 $ 7,748 -- 1,500
Executive Vice 1997 313,085 99,875 78,268 550,000 1,500
President 1996 272,741 -- -- 50,000 1,020
David A. Kinser 1998 274,673 157,186 -- 50,000 --
Senior Vice President 1997 91,346 81,694 -- 75,000 --
1996 N/A N/A N/A N/A N/A
Raymond Stern 1998 191,971 234,616 -- 100,000 --
Senior Vice President 1997 N/A N/A N/A N/A N/A
1996 N/A N/A N/A N/A N/A
</TABLE>
- ------------------
(1) Includes performance-based bonuses and payments under Intuit's
performance sharing plan for all individuals. Mr. Stern's fiscal 1998
bonus total includes a $125,000 signing bonus. Mr. Kinser's fiscal
1997 bonus total includes a $50,000 signing bonus.
(2) Fiscal 1997 compensation for Mr. Harris includes $70,520 in relocation
expenses. All other amounts reflect a car allowance.
(3) Consists of options granted under Intuit's 1993 Equity Incentive Plan.
See Option Grants in Fiscal 1998 on page 18.
(4) The amount for Mr. Harris for fiscal 1996 consists of premiums paid by
Intuit for term life insurance for Mr. Harris. These payments were
obligations of ChipSoft Inc. (Mr. Harris' former employer) that Intuit
assumed when it acquired ChipSoft in December 1993. Amounts for fiscal
1997 and 1998 consist of Intuit matching contributions under Intuit's
401(k) retirement plan.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
On March 30, 1994, we entered into a Letter Agreement of Employment with William
V. Campbell, who served as President and Chief Executive Officer through July
31, 1998. Some terms of the agreement have expired, but the following terms have
been in effect since the beginning of fiscal 1997: Under the agreement, Mr.
Campbell's base
16
<PAGE> 19
salary is reviewed annually and he participates in our annual executive bonus
program under which he can earn a bonus of up to 100% of his base salary. Under
the agreement, Mr. Campbell's employment may be terminated by Intuit or Mr.
Campbell at any time. However, if we terminate his employment without "cause,"
we must continue to pay his salary and health benefits for six months after his
termination or until he accepts another position, whichever is earlier.
On June 11, 1997, we granted options to William V. Campbell and to William H.
Harris, Jr. to purchase 500,000 shares of Common Stock. On August 1, 1997 we
granted an option to Scott D. Cook to purchase 250,000 shares of Common Stock.
The options for Mr. Campbell and Mr. Harris vest at a rate of 20% on the date of
grant and 1.6667% per month after that for four years. The option for Mr. Cook
vests 25% one year after the date of grant and an additional 2.0833% per month
after that for three years. However, the vesting for each of these options will
accelerate by two years if and when there is a change in control of Intuit. The
acceleration may be subject to some Tax Code limits.
OPTION GRANTS IN FISCAL 1998
The following table shows information about stock option grants to the Named
Officers during fiscal 1998. These options are included in the Summary
Compensation Table on page 16. All options were granted at fair market value
under the 1993 Equity Incentive Plan, which is described beginning on page 5.
The options have ten-year terms. The rules of the Securities and Exchange
Commission require us to show hypothetical gains that the Named Officers would
have for these options at the end of their ten-year terms. These gains are
calculated assuming annual compound stock price appreciation of 5% and 10% from
the date the option was originally granted to the end of the option term. THE 5%
AND 10% ASSUMED ANNUAL COMPOUND RATES OF STOCK PRICE APPRECIATION ARE REQUIRED
BY SEC RULES. THEY ARE NOT INTUIT'S ESTIMATE OR PROJECTION OF FUTURE STOCK
PRICES.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE
NUMBER OF AT ASSUMED ANNUAL RATES OF
SHARES % OF TOTAL STOCK PRICE APPRECIATION
UNDERLYING OPTIONS GRANTED EXERCISE OR FOR OPTION TERM
OPTIONS TO EMPLOYEES IN BASE PRICE EXPIRATION -----------------------------
NAME GRANTED(#) FISCAL 1998 ($/SH) DATE 5% 10%
- -------------------- ----------- --------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
William V. Campbell -- -- -- -- -- --
Scott D. Cook 250,000(1) 8.12% $ 27.00 08/01/07 $ 4,245,039 $10,757,762
William H. Harris, Jr -- -- -- -- -- --
David A. Kinser 50,000(2) 1.62 30.25 10/27/07 951,203 2,410,535
Raymond G. Stern 100,000(3) 3.25 30.25 11/07/07 1,902,406 4,821,071
</TABLE>
- ------------------
(1) This option vests 25% one year after the date of grant and an
additional 2.0833% per month after that for three years. However, the
vesting will accelerate by two years if and when there is a change in
control of Intuit. The acceleration may be subject to some Tax Code
limits.
(2) This option vests 50% one year after the date of grant (which was
October 27, 1997) and 50% two years after the date of grant so that
the option will be 100% vested on the second anniversary of the date
of grant.
(3) This option vests 25% on the date of grant (which was November 7,
1997) and an additional 2.0833% per month after that for three years
so that the option will be 100% vested on the third anniversary of the
date of grant.
17
<PAGE> 20
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table shows information about the value realized on option
exercises for each of the Named Officers during fiscal 1998, and the value of
their unexercised options at the end of fiscal 1998. All options were granted
under the Equity Plan except for 289,900 options held by Mr. Harris, which were
granted under option plans of ChipSoft, Inc. and assumed by Intuit when we
acquired ChipSoft in December 1993. Value realized, or gain, is measured as the
difference between the exercise price and the price at which the shares were
sold on the date of exercise. Value at fiscal year end is measured as the
difference between the exercise price and fair market value on July 31, 1998,
which was $49.75.
AGGREGATED OPTION EXERCISES IN FISCAL 1998 AND JULY 31, 1998 OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
FISCAL YEAR-END(#) FISCAL YEAR-END($)
SHARES ACQUIRED VALUE ------------------------------ ------------------------------
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------ --------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
William V. Campbell ..... 100,000 $ 2,440,550 626,633 416,667 $19,403,968 $ 8,870,842
Scott D. Cook ........... -- -- -- 250,000 -- 5,687,500
William H. Harris, Jr ... 94,900 3,281,596 214,583 397,917 5,434,627 8,588,810
David A. Kinser ......... -- -- 25,000 100,000 668,750 2,312,500
Raymond G. Stern ........ -- -- 41,666 58,334 812,487 1,137,513
</TABLE>
18
<PAGE> 21
The following pages contain a report issued by our Compensation Committee
relating to executive compensation for fiscal 1998, and a chart titled "Company
Stock Price Performance." Stockholders should be aware that under SEC rules, the
Compensation Committee report and the stock price performance charts are not
considered "filed" with the SEC under the Securities Exchange Act of 1934, and
are not incorporated by reference in any past or future filing by Intuit under
the Securities Exchange Act of 1934 or the Securities Act of 1933 unless these
sections are specifically referenced.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE
The Compensation Committee of our Board of Directors makes all final decisions
about compensation for executive officers. Mr. Hallman served on the
Compensation Committee throughout fiscal 1998. Mr. Doerr served on the
Compensation Committee from August through June 30, 1998, and Mr. McMurtry
served on the Compensation Committee during Mr. Doerr's absence from July 1,
1998 through the end of fiscal 1998. Since August 1, 1998, Mr. Campbell has been
a non-voting advisory member of the Compensation Committee, but he does not
participate in discussions or decisions about his own compensation. For more
background about the Compensation Committee, see pages 4-5.
GENERAL COMPENSATION POLICY FOR EXECUTIVE OFFICERS
The Compensation Committee establishes the general compensation policy for all
executive officers. The general compensation policy is that cash compensation
should vary with Intuit's performance, and any long-term awards should be
closely aligned with the long-term interests of our stockholders. The Committee
creates long-term equity incentives for executive officers by granting stock
options under the 1993 Equity Incentive Plan and by allowing officers to
participate in the 1996 Employee Stock Purchase Plan. The Compensation Committee
also administers our 1993 Equity Incentive Plan and our 1996 Employee Stock
Purchase Plan. Options and participation in our Purchase Plan provide value for
executives only if our stock price increases, and only if the executives remain
with Intuit until their options vest, and until the end of the Purchase Plan
offering periods. On November 11, 1998, Intuit's Board of Directors adopted the
1998 Option Plan for Mergers and Acquisitions to facilitate grants of
nonqualified stock options to individuals who are hired as a result of an
acquisition or merger by Intuit. Options granted to officers hired as a result
of a merger or acquisition cannot exceed 45% of all shares reserved for grant
under the 1998 Plan and must be granted within 18 months of the closing of the
merger or acquisition. See page 8 for a description of the 1998 Plan.
The Compensation Committee generally reviews base salary levels and target
bonuses for the Chief Executive Officer, the Chairman and other executive
officers near the beginning of each fiscal year. In determining compensation for
a specific officer, the Compensation Committee considers many factors, including
the compensation of executive officers of companies comparable to Intuit, the
officer's individual performance, the officer's current compensation and
Intuit's recent financial performance. Specifically, officer compensation is
compared to competitive market compensation levels of comparable companies to
determine base salary range midpoints, target bonuses and target total cash
compensation. Stock option grant policies of other companies, if available, are
also reviewed and compared. For executive officers other than the Chief
Executive Officer and the Chairman, the Compensation Committee gives
considerable weight to the recommendations of the Chief Executive Officer and
the Chairman.
FISCAL 1998 EXECUTIVE COMPENSATION
Base Compensation. The Committee used the Radford Executive Benchmark Salary
Survey to determine comparable base salaries for executive officers. Comparable
companies selected for the survey included approximately 35 companies in the
computer industry -- primarily software companies. The Compensation Committee
seeks to place the base salary of each executive within the market salary range
for the position, with the actual salary position in the range based on the
Committee's assessment of the individual's job performance.
19
<PAGE> 22
Incentive Compensation. For fiscal 1998, the Compensation Committee approved
incentive bonus plans for Intuit's executive officers and other senior-level
managers. Executive bonuses were based on achievement of pre-determined
objectives for Intuit, as well as objectives for the officer's business or
functional unit and personal objectives for the individual officer. Intuit
objectives were based on revenue and operating income results. Business or
functional unit goals were based on business unit revenue, contribution and
operational factors such as customer satisfaction. Individual objectives related
to budget/expense management, process improvement and employee management. The
weight given to each of these factors varied from officer to officer. Individual
bonuses for fiscal 1998 to Intuit's executive officers who were with Intuit for
the full year ranged from $32,501 to $475,000.
Performance Sharing. Executive officers also participate in Intuit's performance
sharing plan. The performance sharing plan generally provides payments to each
full-time employee equal to a certain percentage of the employee's base
earnings. The percentage, which is the same for all participating employees, is
determined based on Intuit's achievement of specified revenue growth and
operating profit goals. Individual performance sharing payments for fiscal 1998
to Intuit's executive officers who were with Intuit for the full year ranged
from $11,906 to $41,424.
Stock Options. The Committee grants stock options to help retain executive
officers and to align their interests with stockholders' interests. Stock
options are usually granted to executive officers when they first join Intuit.
Officers generally receive additional grants when their responsibilities
increase significantly, and they are also eligible for additional grants in
connection with their annual performance evaluations depending on their
performance level. The Committee may grant options at other times if it believes
options are a necessary or appropriate retention incentive. While options
generally vest at varying rates over a four-year period to provide a long-term
incentive for executives to remain with Intuit, the Committee occasionally
provides faster vesting, to provide a more immediate benefit in response to
competitive factors. The Committee determines the number of options based on
competitive factors, as well as on the executive's anticipated future
contribution, his or her ability to impact corporate and/or business unit
results, past performance, consistency within the executive's peer group and the
current number of vested and unvested options held by the executive. The
Committee granted options for 430,000 shares to current executive officers
during fiscal 1998, including 400,000 shares for grants to Named Officers. Of
these shares, 100,000 were granted in connection with hiring Mr. Stern, a Named
Officer. The remaining grants were made in connection with periodic performance
and compensation evaluations. See Option Grants in Fiscal 1998 on page 17. The
Committee believes that these grants were necessary in order to attract and
retain key executive talent in a very competitive environment. On August 3, 1998
(shortly following the end of fiscal 1998), the Committee granted options for an
additional 385,000 shares to current executive officers, including options for
90,000 shares granted to Named Officers, in connection with annual performance
evaluations.
Intuit Performance and CEO Compensation. For fiscal 1998, Mr. Campbell, who was
Intuit's Chief Executive Officer during fiscal 1998, received a base salary of
$489,615, a performance-based bonus of $475,000 and performance-sharing payments
of $41,424. In determining base salary at the beginning of fiscal 1998, the
Committee considered the Radford Executive Benchmark Salary Survey, CEO total
compensation data published in Forbes Magazine, and the performance of Intuit
and Mr. Campbell during fiscal 1997. The bonus amount for fiscal 1998 was
determined at the same time that fiscal 1999 salary adjustments were made, and
it represents 97% of his fiscal 1998 salary. The Committee concluded that the
bonus amount was appropriate to recognize Mr. Campbell's efforts in successfully
defining and implementing Intuit's new corporate strategies and in facilitating
a smooth management transition effective August 1, 1998. In determining the
bonus amount, the Committee also reviewed current comparable market information
indicating that Mr. Campbell's total compensation was significantly below
market. The bonus amount was intended to bring Mr. Campbell's total cash
compensation more in line with market levels. Although Mr. Campbell did not
receive any option grants during fiscal 1998, he currently holds options to
purchase a total of 1,043,300 shares, including options for 575,000 shares that
were granted during fiscal 1997.
Compliance with Section 162(m) of the Internal Revenue Code of 1986. Certain
types of compensation are tax deductible for Intuit under Section 162(m) of the
Tax Code only if performance criteria are specified in detail, and payments are
contingent on stockholder approval of the compensation arrangement. The Equity
Incentive Plan complies with the requirements of Section 162(m) of the Tax Code.
Intuit does not expect that the cash compensation it pays in fiscal 1999 will be
affected by the requirements of Section 162(m). However, since corporate
objectives may not always be consistent with the requirements for full
deductibility, it is conceivable that
20
<PAGE> 23
Intuit may enter into compensation arrangements in the future under which
payments are not deductible under Section 162(m).
FISCAL 1998 COMPENSATION COMMITTEE
L. John Doerr
Michael R. Hallman
Burton J. McMurtry
COMPANY STOCK PRICE PERFORMANCE
The graph below compares the cumulative total stockholder return on Intuit
Common Stock on the dates indicated from September 30, 1993 (the last day prior
to the beginning of fiscal 1994) to July 31, 1998 (the end of fiscal 1998), with
the cumulative total return on the Nasdaq Stock Market -- U.S. Index and the
Hambrecht & Quist Technology Index on the same dates. (In August 1994, we
changed our fiscal year end from September 30 to July 31.) The graph assumes
that $100 was invested in Intuit Common Stock and in each of the other indexes
on September 30, 1993 and that all dividends were reinvested. The comparisons in
the graph below are based on historical data (with Intuit Common Stock prices
based on the closing price on the dates indicated) and are not intended to
forecast the possible future performance of Intuit's Common Stock.
COMPARISON OF 58 MONTH CUMULATIVE TOTAL RETURN*
AMONG INTUIT INC., THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE HAMBRECHT & QUIST TECHNOLOGY INDEX
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
------------------------------------------------------------------
9/30/93 7/31/94 7/31/95 7/31/96 7/31/97 7/31/98
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
INTUIT INC 100.00 102.13 244.68 198.58 142.91 282.27
NASDAQ STOCK MARKET (U.S.) 100.00 95.02 133.45 145.35 214.48 253.23
HAMBRECHT & QUIST TECHNOLOGY 100.00 103.82 193.23 185.66 313.72 338.00
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Since August 1, 1997, there have not been any transactions involving more than
$60,000 between Intuit and any executive officers, directors or 5% stockholders
or any of their immediate family members, except for salary, bonuses and other
compensation described as required in Executive Compensation (beginning on page
16), the employment contract and termination of employment and change-in-control
arrangements described on pages 16-17, grants of options to non-employee
directors described on page 11, and the transactions described below.
21
<PAGE> 24
On March 13, 1998, the Compensation Committee of the Board of Directors approved
loans to Raymond Stern and Mark Goines, two Senior Vice Presidents of Intuit, in
connection with their relocation. For Mr. Stern, the principal amount of the
loan is $170,000, the interest rate is 5.54% per year, and all interest and
principal are due no later than 5 years from the date of the loan (or upon
termination of Mr. Stern's employment with Intuit). The amount outstanding as of
October 31, 1998 was $175,677. The loan was secured by Mr. Stern's former
residence, which was recently sold, and the loan is expected to be repaid by the
end of our second fiscal quarter (January 31, 1999). For Mr. Goines, the
principal amount of the loan is $200,000, the interest rate is 5.54% per year,
interest is payable annually and principal is due no later than 5 years from the
date of the loan (or upon termination of Mr. Goines' employment with Intuit).
The amount outstanding as of October 31, 1998 was $206,894. The loan is secured
by his residence. If Mr. Goines remains an employee of Intuit, $20,000 of
principal amount will be forgiven each year on the anniversary of the loan, up
to $100,000.
In May 1998, we participated in the formation of a joint venture company,
Venture Finance Software Corp. ("VFSC") that is developing certain Web-oriented
finance products. In exchange for a 49% equity interest in VFSC, we granted VFSC
licenses to certain technology and intellectual property rights, and we have
agreed with VFSC not to compete in certain areas of server-based personal
finance for a period of ten years. VFSC is receiving cash funding from other
investors. Of the $46 million potential funding for VFSC, venture capital funds
managed by Kleiner Perkins Caufield & Byers, of which L. John Doerr, a director
of Intuit, is a general partner, have invested $500,000 and have agreed to
invest up to an additional $500,000. Intuit has the option to purchase the
equity interests of the other investors in VFSC between May 4, 2000 and May 4,
2002 at a price to be determined by a formula based on Intuit's stock price
appreciation (subject to certain minimum return levels).
Eric Dunn, Intuit's Senior Vice President and Chief Technology Officer, is
President and a director of VFSC and is devoting substantially all of his time
to the management of VFSC. Pursuant to an Operating Agreement between Intuit and
VFSC, all of VFSC's development and commercialization efforts, as well as
operating services (such as financing and accounting) are performed by Intuit
and its employees. Intuit receives payments from VFSC based on Intuit's costs of
providing these services. Consistent with the Operating Agreement, Mr. Dunn
continues to receive salary and bonus compensation from Intuit for his services
to VFSC. In addition, in connection with the formation of VFSC, Mr. Dunn
received an option to purchase shares of stock of VFSC representing
approximately 5% of the outstanding shares. The option generally vests at the
end of four years, with monthly prorated vesting if Mr. Dunn is terminated
without cause prior to four years, and no vesting if Mr. Dunn voluntarily
resigns prior to four years. However, if Intuit elects to exercise the Purchase
Option, vesting of Mr. Dunn's option will accelerate. The percentage of the
option that will vest will depend on the then-current value of VFSC, with a
higher value leading to a greater percentage vesting. Any shares purchased by
Mr. Dunn on exercise of his option will be purchased by Intuit, along with the
equity interests of other investors, and at the same formula price, if and when
Intuit exercises the Purchase Option. Mr. Dunn is not eligible to receive any
additional Intuit stock options during his tenure with VFSC.
STOCKHOLDER PROPOSALS
Under SEC rules, any stockholder who intends to present a proposal at Intuit's
2000 Annual Meeting of Stockholders must submit the proposal to Intuit, at our
principal executive offices, no later than August 6, 1999 in order for the
proposal to be included in our Proxy Statement and proxy for the meeting. Any
stockholder who wishes to bring a proposal before the Intuit 2000 Annual Meeting
of Stockholders, but does not wish to include it in the Company's proxy
materials, must provide written notice of the proposal to Intuit's Secretary, at
our principal executive offices, by November 16, 1999.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Intuit's
directors, executive officers, and 10% stockholders to file forms with the SEC
to report their ownership of Intuit shares and any changes in ownership. Anyone
required to file forms with the SEC must also send copies of the forms to
Intuit. We have reviewed all forms provided to us. Based on that review and on
written information given to us by our executive officers and
22
<PAGE> 25
directors, we believe that all Section 16(a) filing requirements were met during
fiscal 1998, except that James J. Heeger, a Senior Vice President of Intuit,
made one late Form 4 filing in June 1998 to report a March 1998 acquisition of
689 shares by his spouse.
OTHER BUSINESS
Our Board of Directors does not currently intend to bring any other business
before the Meeting, and is not aware of any other business to be brought before
the Meeting. If any other business is properly brought before the Meeting, the
proxies will be voted in accordance with the judgment of the proxy holders.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND
PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
23
<PAGE> 26
APPENDIX A
INTUIT INC.
1993 EQUITY INCENTIVE PLAN
As Adopted February 1, 1993
and Amended and Restated through April 29, 1998
and as proposed to be amended January 15, 1998
1. PURPOSE. The purpose of the Plan is to provide incentives to
attract, retain and motivate eligible persons whose present and potential
contributions are important to the success of the Company (or any Parent,
Subsidiary or Affiliate of the Company), by offering those persons an
opportunity to participate in the Company's future performance through awards of
Options, Restricted Stock, Stock Bonuses and Performance Awards. Capitalized
terms are defined in Section 24 if they are not otherwise defined in other
sections of the Plan.
2. SHARES SUBJECT TO THE PLAN.
2.1 Number of Shares Available. Subject to Sections 2.2 and
19, the total number of Shares reserved and available for grant and issuance
pursuant to Awards under the Plan shall be 15,745,000 Shares. Subject to
Sections 2.2 and 19, Shares will again be available for grant and issuance in
connection with future Awards under the Plan if the Shares: (a) are subject to
issuance upon exercise of an Option but cease to be subject to the Option for
any reason other than exercise of the Option; (b) are subject to an Award that
otherwise terminates without Shares being issued; or (c) are subject to an Award
that is forfeited or are repurchased by the Company at the original issue price.
At all times the Company will reserve and keep available a sufficient number of
Shares to satisfy the requirements of all outstanding Awards granted under the
Plan.
2.2 Adjustment of Shares. If the number of outstanding
Shares is changed by a stock dividend, recapitalization, stock split, reverse
stock split, subdivision, combination, reclassification or similar change in the
capital structure of the Company, without consideration, then (a) the number of
Shares reserved for issuance under the Plan, (b) the Exercise Prices of and
number of Shares subject to outstanding Options, and (c) the number of Shares
subject to other outstanding Awards, will be proportionately adjusted, subject
to any required action by the Board or the stockholders of the Company and
compliance with applicable securities laws; provided that fractions of a Share
will not be issued but will either be paid in cash at Fair Market Value, or will
be rounded up to the nearest Share, as determined by the Committee; and provided
further that the Exercise Price of any Option may not be decreased to below the
par value of the Shares.
3. ELIGIBILITY. ISOs may be granted only to employees (including
officers and directors who are also employees) of the Company or of a Parent or
Subsidiary of the Company. All other Awards may be granted to employees,
officers, directors, consultants, independent contractors and advisors of the
Company or any Parent, Subsidiary or Affiliate of the Company; provided that
such consultants, contractors and advisors render bona fide services not in
connection with the offer and sale of securities in a capital-raising
transaction. A person may be granted more than one Award under the Plan. Each
person is eligible to receive Awards with respect to an aggregate maximum of
2,000,000 Shares over the term of the Plan.
4. ADMINISTRATION.
4.1 Committee Authority. The Plan shall be administered by
the Committee. Subject to the terms and conditions of the Plan, the Committee
will have full power to implement and carry out the Plan. Without limiting the
previous sentence, the Committee will have the authority to:
(a) construe and interpret the Plan, any Award Agreement and any
other agreement or document executed pursuant to the Plan;
(b) prescribe, amend and rescind rules and regulations relating to
the Plan, including determining the forms and agreements used in
connection with the Plan; provided that the Committee may
delegate to the President, the Chief Financial Officer or the
officer in charge of Human Resources,
<PAGE> 27
in consultation with the General Counsel, the authority to
approve revisions to the forms and agreements used in connection
with the Plan that are designed to facilitate Plan
administration, and that are not inconsistent with the Plan or
with any resolutions of the Committee relating to the Plan;
(c) select persons to receive Awards; provided that the Committee
may delegate to one or more executive officers of the Company
the authority to grant an Award under the Plan to Participants
who are not Insiders of the Company;
(d) determine the terms of Awards;
(e) determine the number of Shares or other consideration subject to
Awards;
(f) determine whether Awards will be granted singly, in combination,
or in tandem with, in replacement of, or as alternatives to,
other Awards under the Plan or any other incentive or
compensation plan of the Company or any Parent, Subsidiary or
Affiliate of the Company;
(g) grant waivers of Plan or Award conditions;
(h) determine the vesting, exercisability and payment of Awards;
(i) correct any defect, supply any omission, or reconcile any
inconsistency in the Plan, any Award or any Award Agreement;
(j) determine whether an Award has been earned;
(k) amend the Plan, except for amendments that increase the number
of Shares available for issuance under the Plan or change the
eligibility criteria for participation in the Plan; or any other
amendments that require approval of the stockholders of the
Company; or
(l) make all other determinations necessary or advisable for the
administration of the Plan.
4.2 Committee Interpretation and Discretion. Any
determination made by the Committee with respect to any Award shall be made in
its sole discretion at the time of grant of the Award or, unless in
contravention of any express term of the Plan or Award, at any later time, and
such determination shall be final and binding on the Company and all persons
having an interest in any Award under the Plan. Any dispute regarding the
interpretation of the Plan or any Award Agreement shall be submitted by
Participant or the Company to the Committee for review. The resolution of such a
dispute by the Committee shall be final and binding on the Company and
Participant.
5. OPTIONS. The Committee may grant Options to eligible persons and
will determine (i) whether the Options will be ISOs or NQSOs; (ii) the number of
Shares subject to the Option, (iii) the Exercise Price of the Option, (iv) the
period during which the Option may be exercised, and (v) all other terms and
conditions of the Option, subject to the following:
5.1 Form of Option Grant. Each Option granted under the Plan
will be evidenced by a Stock Option Agreement that will expressly identify the
Option as an ISO or NQSO. The Stock Option Agreement will be substantially in a
form (which need not be the same for each Participant) that the Committee or an
officer of the Company (pursuant to Section 4.1(b)) has from time to time
approved, and will comply with and be subject to the terms and conditions of the
Plan.
5.2 Date of Grant. The date of grant of an Option will be
the date on which the Committee makes the determination to grant the Option,
unless a later date is otherwise specified by the Committee. The Stock Option
Agreement, and a copy of the Plan and the current Prospectus for the Plan (plus
any additional documents required to be delivered under applicable laws), will
be delivered to the Participant within a reasonable time after
2
<PAGE> 28
the Option is granted. The Plan, the Prospectus and other documents may
delivered in any manner (including electronic distribution or posting) that
meets applicable legal requirements.
5.3 Exercise Period and Expiration Date. Options will be
exercisable within the times or upon the occurrence of events determined by the
Committee and set forth in the Stock Option Agreement, subject to the provisions
of Section 5.6, and subject to Company policies established by the Committee (or
by individuals to whom the Committee has delegated responsibility) from time to
time with respect to vesting during leaves of absences. The Stock Option
Agreement shall set forth the last date that the option may be exercised (the
"Expiration Date"); provided that no Option will be exercisable after the
expiration of ten years from the date the Option is granted; and provided
further that no ISO granted to a Ten Percent Stockholder will be exercisable
after the expiration of five years from the date the Option is granted. The
Committee also may provide for Options to become exercisable at one time or from
time to time, periodically or otherwise, in such number of Shares or percentage
of Shares subject to the Option as the Committee determines.
5.4 Exercise Price. The Exercise Price of an Option will be
determined by the Committee when the Option is granted and may be less than Fair
Market Value (but not less than the par value of the Shares); provided that (i)
the Exercise Price of an ISO will not be less than the Fair Market Value of the
Shares on the date of grant and (ii) the Exercise Price of any ISO granted to a
Ten Percent Stockholder will not be less than 110% of the Fair Market Value of
the Shares on the date of grant. Payment for the Shares purchased must be made
in accordance with Section 8 of the Plan and the Stock Option Agreement.
5.5 Procedures for Exercise. A Participant may exercise
Options by following the procedures established by the Company's Stock
Administration Department, as communicated and made available to Participants
through the stock pages on the Intuit Legal Department intranet web site, and/or
through the Company's electronic mail system.
5.6 Termination. Any Option granted to a Participant will
cease to vest on the Participant's Termination. Following a Participant's
termination, the Participant's Option may be exercised (to the extent such
Option was exercisable immediately prior to the Termination Date):
(a) no later than 90 days after the Termination Date if a
Participant is Terminated for any reason except death or
Disability, unless a longer time period, not exceeding five
years, is specifically set forth in the Participant's Stock
Option Agreement; provided that no Option may be exercised after
the Expiration Date of the Option; or
(b) no later than (i) twelve months after the Termination Date in
the case of Termination due to Disability or (ii) eighteen
months after the Termination Date in the case of Termination due
to death or if a Participant dies within three months of the
Termination Date, unless a longer time period, not exceeding
five years, is specifically set forth in the Participant's Stock
Option Agreement; provided that no Option may be exercised after
the Expiration Date of the Option.
5.7 Limitations on Exercise. The Committee may specify a
reasonable minimum number of Shares that may be purchased on any exercise of an
Option; provided that the minimum number will not prevent a Participant from
exercising an Option for the full number of Shares for which it is then
exercisable.
5.8 Limitations on ISOs. The aggregate Fair Market Value
(determined as of the date of grant) of Shares with respect to which ISOs are
exercisable for the first time by a Participant during any calendar year (under
the Plan or under any other incentive stock option plan of the Company or any
Affiliate, Parent or Subsidiary of the Company) shall not exceed $100,000. If
the Fair Market Value of Shares on the date of grant with respect to which ISOs
are exercisable for the first time by a Participant during any calendar year
exceeds $100,000, the Options for the first $100,000 worth of Shares to become
exercisable in that calendar year will be ISOs, and the Options for the Shares
with a Fair Market Value in excess of $100,000 that become exercisable in that
calendar year will be NQSOs. If the Code is amended after the Effective Date of
the Plan to provide for a different limit on the Fair Market Value of Shares
permitted to be subject to ISOs, such different limit shall be automatically
incorporated into the Plan and will apply to any Options granted after the
effective date of the amendment.
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5.9 Notice of Disqualifying Dispositions of Shares Acquired
on Exercise of an ISO. If a Participant sells or otherwise disposes of any
Shares acquired pursuant to the exercise of an ISO on or before the later of (1)
the date two years after the Date of Grant, and (2) the date one year after the
exercise of the ISO (in either case, a "Disqualifying Disposition"), the
Participant must immediately notify the Company in writing of such disposition.
The Participant may be subject to income tax withholding by the Company on the
compensation income recognized by the Participant from the Disqualifying
Disposition.
5.10 Modification, Extension or Renewal. The Committee may
modify, extend or renew outstanding Options and authorize the grant of new
Options in substitution therefor; provided that any such action may not, without
the written consent of Participant, impair any of Participant's rights under any
Option previously granted. Any outstanding ISO that is modified, extended,
renewed or otherwise altered shall be treated in accordance with Section 424(h)
of the Code. The Committee may reduce the Exercise Price of outstanding Options
without the consent of Participants affected, by a written notice to them;
provided, however, that the Exercise Price may not be reduced below the minimum
Exercise Price that would be permitted under Section 5.4 of the Plan for Options
granted on the date the action is taken to reduce the Exercise Price; and
provided, further, that the Exercise Price shall not be reduced below the par
value of the Shares.
5.11 No Disqualification. Notwithstanding any other provision
in the Plan, no term of the Plan relating to ISOs will be interpreted, amended
or altered, and no discretion or authority granted under the Plan will be
exercised, so as to disqualify the Plan under Section 422 of the Code or,
without the consent of the Participant affected, to disqualify any ISO under
Section 422 of the Code.
6. RESTRICTED STOCK AWARDS. The Committee may award Restricted
Stock Awards under the Plan to any eligible person. The Committee will determine
the number of Shares subject to the Restricted Stock Award, the Purchase Price,
the restrictions on the Shares and all other terms and conditions of the
Restricted Stock Award, subject to the following:
6.1 Restricted Stock Purchase Agreement. All purchases under
a Restricted Stock Award will be evidenced by Restricted Stock Purchase
Agreement, which will be in substantially a form (which need not be the same for
each Participant) that the Committee has from time to time approved, and will
comply with and be subject to the terms and conditions of the Plan. A
Participant can accept a Restricted Stock Award only by signing and delivering
to the Company a Restricted Stock Purchase Agreement, and full payment of the
Purchase Price, within thirty days from the date the Restricted Stock Purchase
Agreement was delivered to the Participant. If the Participant does not accept
the Restricted Stock Award in this manner within thirty days, then the offer of
the Restricted Stock Award will terminate, unless the Committee determines
otherwise.
6.2 Purchase Price. The Purchase Price for a Restricted
Stock Award will be determined by the Committee, and may be less than Fair
Market Value (but not less than the par value of the Shares) on the date the
Restricted Stock Award is granted. Payment of the Purchase Price must be made in
accordance with Section 9 of the Plan and the Restricted Stock Purchase
Agreement, and in accordance with any procedures established by the Company's
Stock Administration Department, as communicated and made available to
Participants through the stock pages on the Intuit Legal Department intranet web
site, and/or through the Company's electronic mail system.
6.3 Terms of Restricted Stock Awards. Restricted Stock
Awards will be subject to all restrictions, if any, that the Committee may
impose. These restrictions may be based on completion of a specified number of
years of service with the Company or upon completion of the performance goals as
set out in advance in the Participant's Restricted Stock Purchase Agreement,
which shall be in substantially in a form (which need not be the same for each
Participant) as the Committee or an officer of the Company (pursuant to Section
4.1(b)) shall from time to time approve, and shall comply with and be subject to
the terms and conditions of the Plan and the Restricted Stock Purchase
Agreement. Prior to the grant of a Restricted Stock Award, the Committee shall:
(a) determine the nature, length and starting date of any Performance Period for
the Restricted Stock Award; (b) select from among the Performance Factors to be
used to measure performance goals, if any; and (c) determine the number of
Shares that may be awarded to the Participant. Prior to the payment for Shares
to be purchased under any Restricted Stock Award, the Committee shall determine
the extent to which such Restricted Stock Award has
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been earned. Performance Periods may overlap and a Participant may participate
simultaneously with respect to Restricted Stock Awards that are subject to
different Performance Periods and having different performance goals and other
criteria; provided, however, that the maximum Restricted Stock Award for each
Participant with respect to any Performance Period shall be thirty percent of
the Shares reserved for issuance under the Plan.
7. STOCK BONUSES.
7.1 Awards of Stock Bonuses. The Committee may award Stock
Bonuses to any eligible person. No payment will be required for Shares awarded
pursuant to a Stock Bonus. A Stock Bonus may be awarded for past services
already rendered to the Company, or any Parent, Subsidiary or Affiliate of the
Company pursuant to a Stock Bonus Agreement, which shall be in substantially a
form (which need not be the same for each Participant) that the Committee has
from time to time approved, and will comply with and be subject to the terms and
conditions of the Plan.
7.2 Terms of Stock Bonuses. Stock Bonuses will be subject to
all restrictions, if any, that the Committee imposes. These restrictions may be
based upon completion of a specified number of years of service with the Company
or upon completion of the performance goals as set out in advance in the
Participant's Stock Bonus Agreement. The terms of Stock Bonuses may vary from
Participant to Participant and between groups of Participants. Prior to the
grant of a Stock Bonus, the Committee shall: (a) determine the nature, length
and starting date of any Performance Period for the Stock Bonus; (b) select from
among the Performance Factors to be used to measure performance goals; and (c)
determine the number of Shares that may be awarded to the Participant. Prior to
the issuance of any Shares or other payment to a Participant pursuant to a Stock
Bonus, the Committee will determine the extent to which the Stock Bonus has been
earned. Performance Periods may overlap and a Participant may participate
simultaneously with respect to Stock Bonuses that are subject to different
Performance Periods and having different performance goals and other criteria;
provided, however, that the maximum Stock Bonus for each Participant with
respect to any Performance Period shall be thirty percent of the Shares reserved
for issuance under the Plan.
7.3 Form of Payment to Participant. The Committee will
determine whether a Stock Bonus will be paid to the Participant in the form of
cash, whole Shares, or a combination thereof, based on the Fair Market Value on
the date of payment, and in either a lump sum payment or in installments.
7.4 Termination During Performance Period. If a Participant
is Terminated during a Performance Period for any reason, then the Participant
will be entitled to payment (whether in Shares, cash or otherwise) with respect
to the Stock Bonus only to the extent earned as of the date of Termination in
accordance with the Stock Bonus Agreement, unless the Committee determines
otherwise.
8. PERFORMANCE AWARDS.
8.1 Performance Awards. A Performance Award consists of the
grant to a Participant of a specified number of Performance Units. The grant of
a Performance Unit to a Participant will entitle the Participant to receive a
specified dollar value, variable under conditions specified in the Performance
Award, if the performance goals specified in the Performance Award are achieved
and the other terms and conditions of the Performance Award are satisfied.
8.2 Terms of Performance Awards. Each Performance Award
shall be evidenced by a Performance Award Agreement, which shall be in
substantially a form (which need not be the same for each Participant) that the
Committee has from time to time approved, and will comply with and be subject to
the terms and conditions of the Plan. Performance Awards will be subject to all
conditions, if any, that the Committee may impose. Prior to the grant of a
Performance Award, the Committee will: (a) specify the number of Performance
Units granted to the Participant; (b) specify the threshold and maximum dollar
values of Performance Units and the corresponding performance goals; (c)
determine the nature, length and starting date of any Performance Period for the
Performance Award; and (d) specify the Performance Factors to be used to measure
performance goals. Prior to the payment of any Performance Award, the Committee
will determine the extent to which the Performance Units have been earned.
Performance Periods may overlap and a Participant may participate simultaneously
with respect
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to Performance Awards that are subject to different Performance Periods and
having different performance goals and other criteria; provided, however, that
the maximum amount of any Performance Award for each Participant with respect to
any Performance Period shall be the lesser of 250% of Participant's base salary
at the time of the Performance Award or $1,000,000.
8.3 Form of Payment to Participant. Performance Awards may
be paid to a Participant currently or on a deferred basis with such reasonable
interest or dividend equivalent, if any, as the Committee determines. The
Committee will determine whether a Performance Award will be paid in the form of
cash, whole Shares, or a combination thereof, based on the Fair Market Value on
the date of payment, and in either a lump sum payment or in installments.
8.4 Termination During Performance Period. If a Participant
is Terminated during a Performance Period for any reason, then the Participant
will be entitled to payment with respect to the Performance Awards only to the
extent earned as of the date of Termination in accordance with the Performance
Award Agreement, unless the Committee determines otherwise.
9. PAYMENT FOR SHARE PURCHASES.
9.1 Payment. Payment for Shares purchased pursuant to the
Plan may be made by any of the following methods (or any combination of such
methods) that are described in the applicable Stock Option Agreement or other
Award Agreement and that are permitted by law:
(a) in cash (by check);
(b) by cancellation of indebtedness of the Company to the
Participant;
(c) by surrender of Shares that either: (1) were obtained by the
Participant in the public market; or (2) if the Shares were not
obtained in the public market, they have been owned by the
Participant for more than six months and have been paid for
within the meaning of SEC Rule 144 (and, if the Shares were
purchased from the Company by use of a promissory note, the note
has been fully paid with respect to the Shares);
(d) by tender of a full recourse promissory note having such terms
as may be approved by the Committee and bearing interest at a
rate sufficient to avoid imputation of income under Sections 483
and 1274 of the Code; provided, however, that a Participant who
is not an employee of the Company may not purchase Shares with a
promissory note unless the note is adequately secured by
collateral other than the Shares; and provided, further, that
the portion of the Purchase Price or Exercise Price equal to the
par value of the Shares must be paid in cash.
(e) by waiver of compensation due or accrued to Participant for
services rendered;
(f) by tender of property; or
(g) with respect only to purchases upon exercise of an Option, and
provided that a public market for the Company's stock exists:
(1) through a "same day sale" commitment from Participant
and an NASD Dealer whereby the Participant irrevocably
elects to exercise the Option and to sell a portion of
the Shares purchased in order to pay the Exercise Price,
and whereby the NASD Dealer irrevocably commits upon
receipt of the Shares to forward the Exercise Price
directly to the Company; or
(2) through a "margin" commitment from Participant and an
NASD Dealer whereby Participant irrevocably elects to
exercise the Option and to pledge the Shares purchased
to the NASD Dealer in a margin account as security for a
loan from the NASD Dealer in
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the amount of the Exercise Price, and whereby the NASD
Dealer irrevocably commits upon receipt of the Shares to
forward the Exercise Price directly to the Company.
9.2 Loan Guarantees. The Committee may, in its sole
discretion, help a Participant pay for Shares purchased under the Plan by
authorizing a guarantee by the Company of a third-party loan to the Participant.
9.3 Issuance of Shares. Upon payment of the applicable
Purchase Price or Exercise Price (or a commitment for payment from the NASD
Dealer designated by the Participant in the case of an exercise by means of a
"same-day sale" or "margin" commitment), and compliance with other conditions
and procedures established by the Company for the purchase of shares, the
Company shall issue the Shares registered in the name of Participant (or in the
name of the NASD Dealer designated by the Participant in the case of an exercise
by means of a "same-day sale" or "margin" commitment) and shall deliver
certificates representing the Shares (in physical or electronic form, as
appropriate). The Shares may be subject to legends or other restrictions as
described in Section 14 of the Plan.
10. WITHHOLDING TAXES.
10.1 Withholding Generally. Whenever Shares are to be issued
under Awards granted under the Plan, the Company may require the Participant to
pay to the Company an amount sufficient to satisfy federal, state and local
withholding tax requirements prior to the delivery of any certificate(s) for the
Shares. If a payment in satisfaction of an Award is to be made in cash, the
payment will be net of an amount sufficient to satisfy federal, state, and local
withholding tax requirements.
10.2 Stock Withholding. When, under applicable tax laws, a
Participant incurs tax liability in connection with the exercise or vesting of
any Award that is subject to tax withholding and the Participant is obligated to
pay the Company the amount required to be withheld, the Committee may, in its
sole discretion, allow the Participant to satisfy the minimum withholding tax
obligation by electing to have the Company withhold from the Shares to be issued
that number of Shares having a Fair Market Value equal to the minimum amount
required to be withheld, determined on the date that the amount of tax to be
withheld is to be determined. All elections by a Participant to have Shares
withheld for this purpose shall be made in writing in a form acceptable to the
Committee.
11. PRIVILEGES OF STOCK OWNERSHIP. No Participant will have any
rights as a stockholder of the Company with respect to any Shares until the
Shares are issued to the Participant. After Shares are issued to the
Participant, the Participant will be a stockholder and have all the rights of a
stockholder with respect to the Shares; provided, however, that if the Shares
are Restricted Stock, any new, additional or different securities the
Participant may become entitled to receive with respect to the Shares by virtue
of a stock dividend, stock split or any other change in the corporate or capital
structure of the Company will be subject to the same restrictions as the
Restricted Stock; provided further, that the Participant will have no right to
retain such dividends or distributions with respect to Shares that are
repurchased at the Participant's original Exercise Price or Purchase Price
pursuant to Section 13.
12. TRANSFERABILITY. Awards granted under the Plan, and any interest
therein, shall not be transferable or assignable by the Participant, and may not
be made subject to execution, attachment or similar process, otherwise than by
will or by the laws of descent and distribution or as consistent with the Plan
and specific Award Agreement provisions relating thereto. During the lifetime of
the Participant an Award shall be exercisable only by the Participant, and any
elections with respect to an Award may be made only by the Participant.
13. RESTRICTIONS ON SHARES. At the discretion of the Committee, the
Company may reserve to itself and/or its assignee(s) in the Award Agreement a
right to repurchase all or a portion of a Participant's Shares that are not
"Vested" (as defined in the Award Agreement), following the Participant's
Termination, at any time within ninety days after the later of (i) the
Participant's Termination Date or (ii) the date the Participant purchases Shares
under the Plan, for cash or cancellation of purchase money indebtedness with
respect to Shares, at the Participant's original Exercise Price or Purchase
Price; provided that upon assignment of the right to repurchase, the assignee
must pay the Company, upon assignment of the right to repurchase, cash equal to
the excess of the Fair Market Value of the Shares over the original Purchase
Price.
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14. CERTIFICATES. All certificates for Shares or other securities
delivered under the Plan (whether in physical or electronic form, as
appropriate) will be subject to stock transfer orders, legends and other
restrictions that the Committee deems necessary or advisable, including without
limitation restrictions under any applicable federal, state or foreign
securities law, or any rules, regulations and other requirements of the SEC or
any stock exchange or automated quotation system on which the Shares may be
listed.
15. ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a
Participant's Shares, the Committee may require the Participant to deposit all
certificates representing Shares, together with stock powers or other transfer
instruments approved by the Committee, appropriately endorsed in blank, with the
Company or an agent designated by the Company, to hold in escrow until such
restrictions have lapsed or terminated, and the Committee may cause a legend or
legends referencing such restrictions to be placed on the certificates. Any
Participant who is permitted to execute a promissory note as partial or full
consideration for the purchase of Shares under the Plan will be required to
pledge and deposit with the Company all or part of the Shares purchased as
collateral to secure the payment of the Participant's obligation to the Company
under the promissory note; provided, however, that the Committee may require or
accept other or additional forms of collateral to secure the payment of such
obligation and, in any event, the Company will have full recourse against the
Participant under the promissory note notwithstanding any pledge of the
Participant's Shares or other collateral. In connection with any pledge of the
Shares, the Participant will be required to execute and deliver a written pledge
agreement in a form that the Committee has from time to time approved. The
Shares purchased with the promissory note may be released from the pledge on a
pro rata basis as the promissory note is paid.
16. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award shall
not be effective unless the Award is in compliance with all applicable state,
federal and foreign securities laws, rules and regulations of any governmental
body, and the requirements of any stock exchange or automated quotation system
on which the Shares may then be listed, as they are in effect on the date of
grant of the Award and also on the date of exercise or other issuance.
Notwithstanding any other provision in the Plan, the Company shall have no
obligation to issue or deliver certificates for Shares under the Plan prior to
(a) obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable, and/or (b) completion of any registration
or other qualification of such shares under any state, federal or foreign law or
ruling of any governmental body that the Company determines to be necessary or
advisable. The Company shall be under no obligation to register the Shares with
the SEC or to effect compliance with the registration, qualification or listing
requirements of any state, federal or foreign securities laws, stock exchange or
automated quotation system, and the Company shall have no liability for any
inability or failure to do so.
17. NO OBLIGATION TO EMPLOY. Nothing in the Plan or any Award
granted under the Plan shall confer or be deemed to confer on any Participant
any right to continue in the employ of, or to continue any other relationship
with, the Company or any Parent, Subsidiary or Affiliate of the Company or limit
in any way the right of the Company or any Parent, Subsidiary or Affiliate of
the Company to terminate Participant's employment or other relationship at any
time, with or without cause.
18. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or
from time to time, authorize the Company, with the consent of the respective
Participants, to issue new Awards in exchange for the surrender and cancellation
of any or all outstanding Awards. The Committee may at any time buy from a
Participant an Option previously granted with payment in cash, Shares or other
consideration, based on such terms and conditions as the Committee and the
Participant shall agree.
19. CORPORATE TRANSACTIONS.
19.1 Assumption or Replacement of Awards by Successor. In the
event of (a) a merger or consolidation in which the Company is not the surviving
corporation (other than a merger or consolidation with a wholly-owned
subsidiary, a reincorporation of the Company in a different jurisdiction, or
other transaction in which there is no substantial change in the stockholders of
the Company and the Awards granted under the Plan are assumed or replaced by the
successor corporation, which assumption shall be binding on all Participants),
(b) a dissolution or liquidation of the Company, (c) the sale of substantially
all of the assets of the Company, or (d) any other transaction which qualifies
as a "corporate transaction" under Section 424(a) of the Code wherein the
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stockholders of the Company give up all of their equity interest in the Company
(except for the acquisition, sale or transfer of all or substantially all of the
outstanding shares of the Company), any or all outstanding Awards may be assumed
or replaced by the successor corporation, which assumption or replacement shall
be binding on all Participants. In the alternative, the successor corporation
may substitute equivalent Awards or provide substantially similar consideration
to Participants as was provided to stockholders (after taking into account the
existing provisions of the Awards). The successor corporation may also issue, in
place of outstanding Shares of the Company held by the Participant,
substantially similar shares or other property subject to repurchase
restrictions no less favorable to the Participant. In the event such successor
corporation, if any, refuses to assume or replace the Awards, as provided above,
pursuant to a transaction described in this Section 19.1, such Awards shall
expire in connection the transaction at such time and on such conditions as the
Board shall determine.
19.2 Other Treatment of Awards. Subject to any greater rights
granted to Participants under Section 19.1, in the event of the occurrence of
any transaction described in Section 19.1, any outstanding Awards shall be
treated as provided in the applicable agreement or plan of merger,
consolidation, dissolution, liquidation, sale of assets or other "corporate
transaction."
19.3 Assumption of Awards by the Company. The Company, from
time to time, also may substitute or assume outstanding awards granted by
another company, whether in connection with an acquisition of such other company
or otherwise, by either (a) granting an Award under the Plan in substitution of
such other company's award, or (b) assuming such award as if it had been granted
under the Plan if the terms of such assumed award could be applied to an Award
granted under the Plan. Such substitution or assumption shall be permissible if
the holder of the substituted or assumed award would have been eligible to be
granted an Award under the Plan if the other company had applied the rules of
the Plan to such grant. In the event the Company assumes an award granted by
another company, the terms and conditions of such award shall remain unchanged
(except that the exercise price and the number and nature of Shares issuable
upon exercise of any such option will be adjusted appropriately pursuant to
Section 424(a) of the Code). In the event the Company elects to grant a new
Option rather than assuming an existing option, such new Option may be granted
with a similarly adjusted Exercise Price.
20. ADOPTION AND STOCKHOLDER APPROVAL. The Plan became effective on
February 1, 1993, which was the date that it was adopted by the Board (the
"Effective Date") and was approved by the stockholders on February 3, 1993.
21. TERM OF PLAN. The Plan will terminate ten years from the
Effective Date.
22. AMENDMENT OR TERMINATION OF PLAN. The Board may at any time
terminate or amend the Plan in any respect, including without limitation
amendment of any form of Award Agreement or instrument to be executed pursuant
to the Plan. In addition, pursuant to Section 4.1(k), the Board has delegated to
the Committee the authority to make certain amendments to the Plan.
Notwithstanding the foregoing, neither the Board nor the Committee shall,
without the approval of the stockholders of the Company, amend the Plan in any
manner that requires such stockholder approval pursuant to the Code or the
regulations promulgated thereunder as such provisions apply to ISO plans, or
pursuant to the Exchange Act or any rule promulgated thereunder. In addition,
no amendment that is detrimental to a Participant may be made to any outstanding
Award without the consent of the Participant.
23. NONEXCLUSIVITY OF THE PLAN; UNFUNDED PLAN. Neither the adoption
of the Plan by the Board, the submission of the Plan to the stockholders of the
Company for approval, nor any provision of the Plan shall be construed as
creating any limitations on the power of the Board to adopt such additional
compensation arrangements as it may deem desirable, including, without
limitation, the granting of stock options and bonuses otherwise than under the
Plan, and such arrangements may be either generally applicable or applicable
only in specific cases. The Plan shall be unfunded. Neither the Company nor the
Board shall be required to segregate any assets that may at any time be
represented by Awards made pursuant to the Plan. Neither the Company, the
Committee, nor the Board shall be deemed to be a trustee of any amounts to be
paid under the Plan.
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24. DEFINITIONS. As used in the Plan, the following terms shall have
the following meanings:
(a) "Affiliate" means any corporation that directly, or indirectly
through one or more intermediaries, controls or is controlled
by, or is under common control with, another corporation, where
"control" (including the terms "controlled by" and "under common
control with") means the possession, direct or indirect, of the
power to cause the direction of the management and policies of
the corporation, whether through the ownership of voting
securities, by contract or otherwise.
(b) "Award" means any award under the Plan, including any Option,
Restricted Stock or Stock Bonus.
(c) "Award Agreement" means, with respect to each Award, the signed
written agreement between the Company and the Participant
setting forth the terms and conditions of the Award.
(d) "Board" means the Board of Directors of the Company.
(e) "Code" means the Internal Revenue Code of 1986, as amended, and
the regulations promulgated thereunder.
(f) "Committee" means the committee appointed by the Board to
administer the Plan, or if no committee is appointed, the Board.
Each member of the Committee shall be (i) a "non-employee
director" for purposes of Section 16 and Rule 16b-3 of the
Exchange Act, and (ii) an "outside director" for purposes of
Section 162(m) of the Code, unless the Board has fewer than two
such outside directors.
(g) "Company" means Intuit Inc., a corporation organized under the
laws of the State of Delaware, or any successor corporation.
(h) "Disability" means a disability within the meaning of Section
22(e)(3) of the Code, as determined by the Committee.
(i) "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the regulations promulgated thereunder.
(j) "Exercise Price" means the price at which a Participant who
holds an Option may purchase the Shares issuable upon exercise
of the Option.
(k) "Fair Market Value" means, as of any date, the value of a share
of the Company's Common Stock determined as follows:
(1) if such Common Stock is then quoted on the NASDAQ
National Market, its last reported sale price on the
NASDAQ National Market on such date or, if no such
reported sale takes place on such date, the average of
the closing bid and asked prices;
(2) if such Common Stock is publicly traded and is then
listed on a national securities exchange, the last
reported sale price on such date or, if no such reported
sale takes place on such date, the average of the
closing bid and asked prices on the principal national
securities exchange on which the Common Stock is listed
or admitted to trading;
(3) if such Common Stock is publicly traded but is not
quoted on the NASDAQ National Market nor listed or
admitted to trading on a national securities exchange,
the average of the closing bid and asked prices on such
date, as reported by The Wall Street Journal, for the
over-the-counter market; or
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(4) if none of the foregoing is applicable, by the Board of
Directors of the Company in good faith.
(l) "Insider" means an officer or director of the Company or any
other person whose transactions in the Company's Common Stock
are subject to Section 16 of the Exchange Act.
(m) "ISO" means an Incentive Stock Option within the meaning of the
Code.
(n) "NASD Dealer" means broker-dealer that is a member of the
National Association of Securities Dealers, Inc.
(o) "NQSO" means a nonqualified stock option that does not qualify
as an Incentive Stock Option within the meaning of the Code.
(p) "Option" means an award of an option to purchase Shares pursuant
to Section 5 of the Plan.
(q) "Parent" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if at
the time of the granting of an Award under the Plan, each of
such corporations other than the Company owns stock possessing
50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
(r) "Participant" means a person who receives an Award under the
Plan.
(s) "Performance Award" means an award of Shares, or cash in lieu of
Shares, pursuant to Section 8 of the Plan.
(t) "Performance Factors" means the factors selected by the
Committee from among the following measures to determine whether
the performance goals established by the Committee and
applicable to Awards have been satisfied:
(1) Net revenue and/or net revenue growth;
(2) Earnings before income taxes and amortization and/or
earnings before income taxes and amortization growth;
(3) Operating income and/or operating income growth;
(4) Net income and/or net income growth;
(5) Earnings per share and/or earnings per share growth;
(6) Total stockholder return and/or total stockholder return
growth;
(7) Return on equity;
(8) Operating cash flow return on income;
(9) Adjusted operating cash flow return on income;
(10) Economic value added; and
(11) Individual business objectives.
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(u) "Performance Period" means the period of service determined by
the Committee, not to exceed five years, during which years of
service or performance is to be measured for Restricted Stock
Awards, Stock Bonuses or Performance Awards.
(v) "Plan" means this Intuit 1993 Equity Incentive Plan, as amended
from time to time.
(w) "Prospectus" means the prospectus relating to the Plan, as
amended from time to time, that is prepared by the Company and
delivered or made available to Participants pursuant to the
requirements of the Securities Act.
(x) "Purchase Price" means the price to be paid for Shares acquired
under the Plan, other than Shares acquired upon exercise of an
Option.
(y) "Restricted Stock Award" means an award of Shares pursuant to
Section 6 of the Plan.
(z) "SEC" means the Securities and Exchange Commission.
(aa) "Securities Act" means the Securities Act of 1933, as amended,
and the regulations promulgated thereunder.
(bb) "Shares" means shares of the Company's Common Stock $0.01 par
value, reserved for issuance under the Plan, as adjusted
pursuant to Sections 2 and 19, and any successor security.
(cc) "Stock Bonus" means an award of Shares, or cash in lieu of
Shares, pursuant to Section 7 of the Plan.
(dd) "Subsidiary" means any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company if,
at the time of granting of the Award, 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 such chain.
(ee) "Ten Percent Stockholder" means any person who directly or by
attribution owns more than ten percent of the total combined
voting power of all classes of stock of the Company or any
Parent or Subsidiary of the Company.
(ff) "Termination" or "Terminated" means, for purposes of the Plan
with respect to a Participant, that the Participant has ceased
to provide services as an employee, director, consultant,
independent contractor or adviser, to the Company or a Parent,
Subsidiary or Affiliate of the Company; provided that a
Participant shall not be deemed to be Terminated if the
Participant is on a leave of absence approved by the Committee
or by an officer of the Company designated by the Committee; and
provided further, that during any approved leave of absence,
vesting of Awards shall be suspended or continue in accordance
with guidelines established from time to time by the Committee.
Subject to the foregoing, the Committee shall have sole
discretion to determine whether a Participant has ceased to
provide services and the effective date on which the Participant
ceased to provide services (the "Termination Date").
12
<PAGE> 38
APPENDIX B
INTUIT INC.
1996 EMPLOYEE STOCK PURCHASE PLAN
As Adopted on October 7, 1996
As Amended Through January 16, 1998
and as proposed to be amended January 15, 1998
1. ESTABLISHMENT OF PLAN. Intuit Inc., a Delaware corporation (the
"Company"), proposes to grant options for purchase of the Company's Common
Stock, $0.01 par value, to eligible employees of the Company and its
Subsidiaries (as hereinafter defined) pursuant to this Employee Stock Purchase
Plan (this "Plan"). For purposes of this Plan, "Parent Corporation" and
"Subsidiary" (collectively, "Subsidiaries") shall have the same meanings as
"parent corporation" and "subsidiary corporation" in Sections 424(e) and 424(f),
respectively, of the Internal Revenue Code of 1986, as amended (the "Code"). The
Company intends this Plan to qualify as an "employee stock purchase plan" under
Section 423 of the Code (including any amendments to or replacements of such
Section), and this Plan shall be so construed. Any term not expressly defined
in this Plan but defined for purposes of Section 423 of the Code shall have the
same definition herein. A total of 800,000 shares of the Company's Common Stock
is reserved for issuance under this Plan. Such number shall be subject to
adjustments effected in accordance with Section 14 of this Plan.
2. PURPOSE. The purpose of this Plan is to provide employees of the
Company, or of any Subsidiary designated by the Board of Directors of the
Company (the "Board") as eligible to participate in this Plan, with a convenient
means of acquiring an equity interest in the Company through payroll deductions,
to enhance such employees' sense of participation in the affairs of the Company
and Subsidiaries, and to provide an incentive for continued employment.
3. ADMINISTRATION. This Plan shall be administered by a committee
appointed by the Board (the "Committee"). If two or more members of the Board
are "Outside Directors" within the meaning of Code Section 162(m), the Committee
will be comprised of at least two (2) members of the Board, all of whom are
Outside Directors. As used in this Plan, references to the "Committee" shall
mean either such committee or the Board if no committee has been established.
Subject to the provisions of this Plan and the limitations of Section 423 of the
Code or any successor provision in the Code, all questions of interpretation or
application of this Plan shall be determined by the Committee and its decisions
shall be final and binding upon all participants. Members of the Committee shall
receive no compensation for their services in connection with the administration
of this Plan, other than standard fees as established from time to time by the
Committee for services rendered by Committee members serving on Board
committees. All expenses incurred in connection with the administration of this
Plan shall be paid by the Company.
4. ELIGIBILITY. Any employee of the Company, or of any Subsidiary
designated by the Board as eligible to participate in this Plan, is eligible to
participate in an Offering Period (as hereinafter defined) under this Plan
except the following:
(a) employees who are not employed by the Company or Subsidiaries
fifteen (15) days before the beginning of such Offering Period;
(b) employees who are customarily employed for less than twenty (20)
hours per week;
(c) employees who are customarily employed for less than five (5)
months in a calendar year;
(d) employees who, together with any other person whose stock would be
attributed to such employee pursuant to Section 424(d) of the Code, own stock or
hold options to purchase stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Company or any of
its Subsidiaries or who, as a result of being granted an option under this Plan
with respect to such Offering Period, would own stock or hold options to
purchase stock possessing five percent (5%) or more of the total combined voting
power or value of all classes of stock of the Company or any of its
Subsidiaries.
An individual who provides services to the Company, or any designated
Subsidiary, as an independent contractor shall not be considered an "employee"
for purposes of this Section 4 or this Plan, and shall not be eligible to
participate in the Plan, except during such periods as the Company or the
designated Subsidiary, as applicable, is required to withhold U.S. federal
employment taxes for the individual. This exclusion from participation shall
apply even if the individual is reclassified as an employee, rather than an
independent contractor, for any purpose other than U.S. federal employment tax
withholding.
<PAGE> 39
Intuit Inc.
1996 Employee Stock Purchase Plan
5. OFFERING DATES. The offering periods of this Plan (each, an
"Offering Period") shall be of six (6) months duration commencing on December 16
and June 16 of each year and ending on June 15 and December 15 of each year;
provided, however, that the first Offering Period shall commence on January 1,
1997 and end on June 30, 1997, and the Second Offering Period shall commence on
July 1, 1997 and end on December 15, 1997. The first business day of each
Offering Period is referred to as the "Offering Date". The last business day of
each Offering Period is referred to as the "Purchase Date". The Board shall have
the power to change the duration of Offering Periods with respect to future
offerings without stockholder approval if such change is announced at least
fifteen (15) days prior to the scheduled beginning of the first Offering Period
to be affected.
6. PARTICIPATION IN THIS PLAN. Eligible employees may become
participants in an Offering Period under this Plan on the first Offering Date
after satisfying the eligibility requirements by delivering a subscription
agreement to the Company not later than fifteen (15) days before such Offering
Date unless a later time for filing the subscription agreement authorizing
payroll deductions is set by the Committee for all eligible employees with
respect to a given Offering Period. An eligible employee who does not deliver a
subscription agreement to the Company by such date after becoming eligible to
participate in such Offering Period shall not participate in that Offering
Period or any subsequent Offering Period unless such employee enrolls in this
Plan by filing a subscription agreement with the Company not later than fifteen
(15) days preceding a subsequent Offering Date. Once an employee becomes a
participant in an Offering Period, such employee will automatically participate
in the Offering Period commencing immediately following the last day of the
prior Offering Period unless the employee withdraws or is deemed to withdraw
from this Plan or terminates further participation in the Offering Period as set
forth in Section 11 below. Such participant is not required to file any
additional subscription agreement in order to continue participation in this
Plan.
7. GRANT OF OPTION ON ENROLLMENT. Enrollment by an eligible employee in
this Plan with respect to an Offering Period will constitute the grant (as of
the Offering Date) by the Company to such employee of an option to purchase on
the Purchase Date up to that number of shares of Common Stock of the Company
determined by dividing (a) the amount accumulated in such employee's payroll
deduction account during such Offering Period by (b) the lower of (i)
eighty-five percent (85%) of the fair market value of a share of the Company's
Common Stock on the Offering Date (but in no event less than the par value of a
share of the Company's Common Stock), or (ii) eighty-five percent (85%) of the
fair market value of a share of the Company's Common Stock on the Purchase Date
(but in no event less than the par value of a share of the Company's Common
Stock); provided, however, that the number of shares of the Company's Common
Stock subject to any option granted pursuant to this Plan shall not exceed the
maximum number of shares which may be purchased pursuant to Section 10(b) or
10(c) below with respect to the applicable Offering Period. The fair market
value of a share of the Company's Common Stock shall be determined as provided
in Section 8 hereof.
8. PURCHASE PRICE. The purchase price per share at which a share of
Common Stock will be sold in any Offering Period shall be eighty-five percent
(85%) of the lesser of:
(a) The fair market value on the Offering Date; or
(b) The fair market value on the Purchase Date;
provided, however, that in no event may the purchase price per share of the
Company's Common Stock be below the par value per share of the Company's Common
Stock.
For purposes of this Plan, the term "Fair Market Value" means as
of any date, the value of a share of the Company's Common Stock determined as
follows:
(a) if such Common Stock is then quoted on the Nasdaq
National Market, its last reported sale price on the
Nasdaq National Market or, if no such reported sale
takes place on such date, the average of the closing
bid and asked prices;
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Intuit Inc.
1996 Employee Stock Purchase Plan
(b) if such Common Stock is publicly traded and is then
listed on a national securities exchange, its last
reported sale price or, if no such reported sale takes
place on such date, the average of the closing bid and
asked prices on the principal national securities
exchange on which the Common Stock is listed or
admitted to trading;
(c) if such Common Stock is publicly traded but is not
quoted on the Nasdaq National Market or listed or
admitted to trading on a national securities exchange,
the average of the closing bid and asked prices on such
date, as reported in The Wall Street Journal, for the
over-the-counter market; or
(d) if none of the foregoing is applicable, by the Board in
good faith.
9. PAYMENT OF PURCHASE PRICE; CHANGES IN PAYROLL DEDUCTIONS; ISSUANCE
OF SHARES.
(a) The purchase price of the shares is accumulated by regular
payroll deductions made during each Offering Period. The deductions are made as
a percentage of the participant's compensation in one percent (1%) increments
not less than two percent (2%), nor greater than ten percent (10%) or such lower
limit set by the Committee. Compensation shall mean base salary. Payroll
deductions shall commence on the first payday following the Offering Date and
shall continue to the end of the Offering Period unless sooner altered or
terminated as provided in this Plan.
(b) A participant may lower (but not increase) the rate of payroll
deductions during an Offering Period by filing with the Company a new
authorization for payroll deductions, in which case the new rate shall become
effective for the next payroll period commencing more than fifteen (15) days
after the Company's receipt of the authorization and shall continue for the
remainder of the Offering Period unless changed as described below. Such change
in the rate of payroll deductions may be made at any time during an Offering
Period, but not more than one (1) change may be made effective during any
Offering Period. A participant may increase or decrease the rate of payroll
deductions for any subsequent Offering Period by filing with the Company a new
authorization for payroll deductions not later than fifteen (15) days before the
beginning of such Offering Period.
(c) All payroll deductions made for a participant are credited to
his or her account under this Plan and are deposited with the general funds of
the Company. No interest accrues on the payroll deductions. All payroll
deductions received or held by the Company may be used by the Company for any
corporate purpose, and the Company shall not be obligated to segregate such
payroll deductions.
(d) On each Purchase Date, so long as this Plan remains in effect
and provided that the participant has not submitted a signed and completed
withdrawal form before that date which notifies the Company that the participant
wishes to withdraw from that Offering Period under this Plan and have all
payroll deductions accumulated in the account maintained on behalf of the
participant as of that date returned to the participant, the Company shall apply
the funds then in the participant's account to the purchase of whole shares of
Common Stock reserved under the option granted to such participant with respect
to the Offering Period to the extent that such option is exercisable on the
Purchase Date. The purchase price per share shall be as specified in Section 8
of this Plan. Any cash remaining in a participant's account after such purchase
of shares shall be carried forward, without interest, into the next Offering
Period; provided, however, that in the event that this Plan has been
oversubscribed, all funds not used to purchase shares on the Purchase Date shall
be returned to the participant, without interest. No Common Stock shall be
purchased on a Purchase Date on behalf of any employee whose participation in
this Plan has terminated prior to such Purchase Date.
(e) As promptly as practicable after the Purchase Date, the Company
shall issue shares for the participant's benefit representing the shares
purchased upon exercise of his or her option.
(f) During a participant's lifetime, such participant's option to
purchase shares hereunder is exercisable only by him or her. The participant
will have no interest or voting right in shares covered by his or her option
until
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<PAGE> 41
Intuit Inc.
1996 Employee Stock Purchase Plan
such option has been exercised. Shares issued for the benefit of a
participant under this Plan will be issued in the name of the participant or in
the name of the participant and his or her spouse.
10. LIMITATIONS ON SHARES TO BE PURCHASED.
(a) No participant shall be entitled to purchase stock under this
Plan at a rate which, when aggregated with his or her rights to purchase stock
under all other employee stock purchase plans of the Company or any Subsidiary,
exceeds $25,000 in fair market value, determined as of the Offering Date (or
such other limit as may be imposed by the Code) for each calendar year in which
the employee participates in this Plan.
(b) No more than two hundred percent (200%) of the number of
shares determined by using eighty-five percent (85%) of the fair market value of
a share of the Company's Common Stock on the Offering Date as the denominator
may be purchased by a participant on any single Purchase Date.
(c) No participant shall be entitled to purchase more than the
Maximum Share Amount (as defined below) on any single Purchase Date. Not less
than thirty (30) days prior to the commencement of any Offering Period, the
Committee may, in its sole discretion, set a maximum number of shares which may
be purchased by any employee at any single Purchase Date (hereinafter the
"Maximum Share Amount"). In no event shall the Maximum Share Amount exceed the
amounts permitted under Section 10(b) above. If a new Maximum Share Amount is
set, then all participants must be notified of such Maximum Share Amount not
less than fifteen (15) days prior to the commencement of the next Offering
Period. Once the Maximum Share Amount is set, it shall continue to apply with
respect to all succeeding Offering Periods unless revised by the Committee as
set forth above.
(d) If the number of shares to be purchased on a Purchase Date by
all employees participating in this Plan exceeds the number of shares then
available for issuance under this Plan, then the Company will make a pro rata
allocation of the remaining shares in as uniform a manner as shall be reasonably
practicable and as the Committee shall determine to be equitable. In such event,
the Company shall give written notice of such reduction of the number of shares
to be purchased under a participant's option to each participant affected
thereby.
(e) Any payroll deductions accumulated in a participant's account
which are not used to purchase stock due to the limitations in this Section 10
shall be returned to the participant as soon as practicable after the end of the
applicable Offering Period, without interest.
11. WITHDRAWAL.
(a) Each participant may withdraw from an Offering Period under
this Plan by signing and delivering to the Company a written notice to that
effect on a form provided for such purpose. Such withdrawal may be elected at
any time at least fifteen (15) days prior to the end of an Offering Period.
(b) Upon withdrawal from this Plan, the accumulated payroll
deductions shall be returned to the withdrawn participant, without interest, and
his or her interest in this Plan shall terminate. In the event a participant
voluntarily elects to withdraw from this Plan, he or she may not resume his or
her participation in this Plan during the same Offering Period, but he or she
may participate in any Offering Period under this Plan which commences on a date
subsequent to such withdrawal by filing a new authorization for payroll
deductions in the same manner as set forth above for initial participation in
this Plan.
12. TERMINATION OF EMPLOYMENT. Termination of a participant's
employment for any reason, including retirement, death or the failure of a
participant to remain an eligible employee, immediately terminates his or her
participation in this Plan. In such event, the payroll deductions credited to
the participant's account will be returned to him or her or, in the case of his
or her death, to his or her legal representative, without interest. For purposes
of this Section 12, an employee will not be deemed to have terminated employment
or failed to remain in the continuous employ of the Company in the case of sick
leave, military leave, or any other leave of absence approved
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<PAGE> 42
Intuit Inc.
1996 Employee Stock Purchase Plan
by the Committee; provided that such leave is for a period of not more than
ninety (90) days or reemployment upon the expiration of such leave is guaranteed
by contract or statute.
13. RETURN OF PAYROLL DEDUCTIONS. In the event a participant's interest
in this Plan is terminated by withdrawal, termination of employment or
otherwise, or in the event this Plan is terminated by the Board, the Company
shall promptly deliver to the participant all payroll deductions credited to
such participant's account. No interest shall accrue on the payroll deductions
of a participant in this Plan.
14. CAPITAL CHANGES. Subject to any required action by the stockholders
of the Company, the number of shares of Common Stock covered by each option
under this Plan which has not yet been exercised and the number of shares of
Common Stock which have been authorized for issuance under this Plan but have
not yet been placed under option (collectively, the "Reserves"), as well as the
price per share of Common Stock covered by each option under this Plan which has
not yet been exercised, shall be proportionately adjusted for any increase or
decrease in the number of issued and outstanding shares of Common Stock of the
Company resulting from a stock split or the payment of a stock dividend (but
only on the Common Stock) or any other increase or decrease in the number of
issued and outstanding shares of Common Stock effected without receipt of any
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration"; and provided further, that the price per
share of Common Stock shall not be reduced below its par value per share. Such
adjustment shall be made by the Board, whose determination shall be final,
binding and conclusive. Except as expressly provided herein, no issue by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock subject
to an option.
In the event of the proposed dissolution or liquidation of the Company,
the Offering Period will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Board. The Board may, in the
exercise of its sole discretion in such instances, declare that the options
under this Plan shall terminate as of a date fixed by the Board and give each
participant the right to exercise his or her option as to all of the optioned
stock, including shares which would not otherwise be exercisable. In the event
of a proposed sale of all or substantially all of the assets of the Company, or
the merger or consolidation of the Company with or into another corporation,
each option under this Plan shall be assumed or an equivalent option shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation, unless the Board determines, in the exercise of its sole
discretion and in lieu of such assumption or substitution, that the participant
shall have the right to exercise the option as to all of the optioned stock. If
the Board makes an option exercisable in lieu of assumption or substitution in
the event of a merger, consolidation or sale of assets, the Board shall notify
the participant that the option shall be fully exercisable for a period of
twenty (20) days from the date of such notice, and the option will terminate
upon the expiration of such period.
The Board may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the price
per share of Common Stock covered by each outstanding option, in the event that
the Company effects one or more reorganizations, recapitalizations, rights
offerings or other increases or reductions of shares of its outstanding Common
Stock, or in the event of the Company being consolidated with or merged into any
other corporation; provided, that the price per share of Common Stock shall not
be reduced below its par value per share.
15. NONASSIGNABILITY. 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 this 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 22 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be void and
without effect.
16. REPORTS. Individual accounts will be maintained for each
participant in this Plan. Each participant shall receive promptly after the end
of each Offering Period a report of his or her account setting forth the total
payroll deductions accumulated, the number of shares purchased, the per share
price thereof and the remaining cash balance, if any, carried forward to the
next Offering Period.
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<PAGE> 43
Intuit Inc.
1996 Employee Stock Purchase Plan
17. NOTICE OF DISPOSITION. Each participant shall notify the Company if
the participant disposes of any of the shares purchased in any Offering Period
pursuant to this Plan if such disposition occurs within two (2) years from the
Offering Date or within one (1) year from the Purchase Date on which such shares
were purchased (the "Notice Period"). Unless such participant is disposing of
any of such shares during the Notice Period, such participant shall keep the
certificates issued to him or her that represent shares purchased hereunder in
his or her name (and not in the name of a nominee) during the Notice Period. The
Company may, at any time during the Notice Period, place a legend or legends on
any certificate representing shares acquired pursuant to this Plan requesting
the Company's transfer agent to notify the Company of any transfer of the
shares. The obligation of the participant to provide such notice shall continue
notwithstanding the placement of any such legend on the certificates.
18. NO RIGHTS TO CONTINUED EMPLOYMENT. Neither this Plan nor the grant
of any option hereunder shall confer any right on any employee to remain in the
employ of the Company or any Subsidiary, or restrict the right of the Company or
any Subsidiary to terminate such employee's employment.
19. EQUAL RIGHTS AND PRIVILEGES. All eligible employees shall have
equal rights and privileges with respect to this Plan so that this Plan
qualifies as an "employee stock purchase plan" within the meaning of Section 423
or any successor provision of the Code and the related regulations. Any
provision of this Plan which is inconsistent with Section 423 or any successor
provision of the Code shall, without further act or amendment by the Company or
the Board, be reformed to comply with the requirements of Section 423. This
Section 19 shall take precedence over all other provisions in this Plan.
20. NOTICES. All notices or other communications by a participant to
the Company under or in connection with this 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. TERM; STOCKHOLDER APPROVAL. This Plan shall become effective on the
date that it is adopted by the Board. This Plan shall be approved by the
stockholders of the Company, in any manner permitted by applicable corporate
law, within twelve (12) months before or after the date this Plan is adopted by
the Board. No purchase of shares pursuant to this Plan shall occur prior to such
stockholder approval. This Plan shall continue until the earlier to occur of (a)
termination of this Plan by the Board (which termination may be effected by the
Board at any time), (b) issuance of all of the shares of Common Stock reserved
for issuance under this Plan, or (c) ten (10) years from the adoption of this
Plan by the Board.
22. 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 this Plan in the event of such participant's death
subsequent to the end of an Offering Period but prior to delivery to him of such
shares and cash. In addition, a participant may file a written designation of a
beneficiary who is to receive any cash from the participant's account under this
Plan in the event of such participant's death prior to a Purchase Date.
(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 this
Plan who is living at the time of such participant's death, the Company shall
deliver such shares or cash to the executor or administrator of the estate of
the participant, or if no such executor or administrator has been appointed (to
the knowledge of the Company), the Company, in its discretion, may deliver such
shares or cash to the spouse or to any one or more dependents or relatives of
the participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.
23. CONDITIONS UPON ISSUANCE OF SHARES; LIMITATION ON SALE OF SHARES.
Shares shall not be issued 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
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<PAGE> 44
Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and
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, and shall be further subject to the approval of counsel for the Company
with respect to such compliance.
24. APPLICABLE LAW. The Plan shall be governed by the substantive laws
(excluding the conflict of laws rules) of the State of California.
25. AMENDMENT OR TERMINATION OF THIS PLAN. The Board may at any time
amend, terminate or extend the term of this Plan, except that any such
termination cannot affect options previously granted under this Plan, nor may
any amendment make any change in an option previously granted which would
adversely affect the right of any participant, nor may any amendment be made
without approval of the stockholders of the Company obtained in accordance with
Section 21 hereof within twelve (12) months of the adoption of such amendment
(or earlier if required by Section 21) if such amendment would:
(a) increase the number of shares that may be issued under this
Plan;
(b) change the designation of the employees (or class of
employees) eligible for participation in this Plan; or
(c) constitute an amendment for which stockholder approval is
required by any stock exchange or automated quotation system upon which the
shares may then be listed.
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<PAGE> 45
APPENDIX C
INTUIT INC.
1996 DIRECTORS STOCK OPTION PLAN
As Adopted October 7, 1996
As Amended through January 16, 1998
and as proposed to be amended January 15, 1998
1. PURPOSE. This 1996 Directors Stock Option Plan (this "Plan") is
established to provide equity incentives for non-employee members of the Board
of Directors of Intuit Inc. (the "Company"), who are described in Section 6.1
below, by granting such persons options to purchase shares of stock of the
Company.
2. ADOPTION AND STOCKHOLDER APPROVAL. This Plan will become effective
on the date (the "Effective Date") on which it is adopted by the Board of
Directors of the Company (the "Board"). This Plan shall be approved by the
stockholders of the Company, consistent with applicable laws, within twelve (12)
months after the date this Plan is adopted by the Board. Options ("Options") may
be granted under this Plan after the Effective Date provided that, in the event
that stockholder approval is not obtained within the time period provided
herein, this Plan, and all Options granted hereunder, shall terminate. No Option
that is issued as a result of any increase in the number of shares authorized to
be issued under this Plan shall be exercised prior to the time such increase has
been approved by the stockholders of the Company and all such Options granted
pursuant to such increase shall similarly terminate if such stockholder approval
is not obtained.
3. TYPES OF OPTIONS AND SHARES. Options granted under this Plan shall
be non-qualified stock options ("NQSOs"). The shares of stock that may be
purchased upon exercise of Options granted under this Plan (the "Shares") are
shares of the Common Stock of the Company.
4. NUMBER OF SHARES. The maximum number of Shares that may be issued
pursuant to Options granted under this Plan (the "Maximum Number") is 195,000
Shares, subject to adjustment as provided in this Plan. If any Option is
terminated for any reason without being exercised in whole or in part, the
Shares thereby released from such Option shall be available for purchase under
other Options subsequently granted under this Plan. At all times during the term
of this Plan, the Company shall reserve and keep available such number of Shares
as shall be required to satisfy the requirements of outstanding Options granted
under this Plan; provided, however, that if the aggregate number of Shares
subject to outstanding Options granted under this Plan plus the aggregate number
of Shares previously issued by the Company pursuant to the exercise of Options
granted under this Plan equals or exceeds the Maximum Number, then
notwithstanding anything herein to the contrary, no further Options may be
granted under this Plan until the Maximum Number is increased or the aggregate
number of Shares subject to outstanding Options granted under this Plan plus the
aggregate number of Shares previously issued by the Company pursuant to the
exercise of Options granted under this Plan is less than the Maximum Number.
5. ADMINISTRATION. This Plan shall be administered by the Board or by a
committee of not less than two members of the Board appointed to administer this
Plan (the "Committee"). As used in this Plan, references to the Committee shall
mean either such Committee or the Board if no Committee has been established.
The interpretation by the Committee of any of the provisions of this Plan or any
Option granted under this Plan shall be final and binding upon the Company and
all persons having an interest in any Option or any Shares purchased pursuant to
an Option.
6. ELIGIBILITY AND AWARD FORMULA.
6.1 Eligibility. Options shall be granted only to directors of the
Company who are not employees of the Company or any Parent, Subsidiary or
Affiliate of the Company, as those terms are defined in Section 17 below (each
such person referred to as an "Optionee").
6.2 Initial Grant. Each Optionee who on or after the Effective Date
is or becomes a member of the Board will automatically be granted an Option for
15,000 Shares (the "Initial Grant") on the later of the date that
<PAGE> 46
Intuit Inc.
1996 Directors Stock Option Plan
the Plan is approved by the stockholders of the Company or the date such
Optionee first becomes a member of the Board.
6.3 Succeeding Grants. On each anniversary of an Initial Grant, if
the Optionee then is still a member of the Board and has served continuously as
a member of the Board since the date of the Optionee's Initial Grant, the
Optionee will automatically be granted an Option for 7,500 Shares (a "Succeeding
Grant").
7. TERMS AND CONDITIONS OF OPTIONS. Subject to the following and to
Section 6 above:
7.1 Form of Option Grant. Each Option granted under this Plan
shall be evidenced by a written Stock Option Grant ("Grant") in such form (which
need not be the same for each Optionee) as the Committee shall from time to time
approve, which Grant shall comply with and be subject to the terms and
conditions of this Plan.
7.2 Vesting. Options granted under this Plan shall be
exercisable as they vest. The date an Optionee receives an Initial Grant or a
Succeeding Grant is referred to in this Plan as the "Start Date" for such
Option. Each Initial Grant and Succeeding Grant will vest as to twenty-five
percent (25%) of the Shares upon the first anniversary of the Start Date for
such Grant and an additional 2.0833% of the Shares each month thereafter, so
long as the Optionee continuously remains a director or a consultant of the
Company, until the Option is exercisable with respect to 100% of the Shares.
7.3 Exercise Price. The exercise price of an Option shall be the
Fair Market Value (as defined in Section 17.4) of the Shares at the time that
the Option is granted.
7.4 Termination of Option. Except as provided below in this
Section, each Option shall expire ten (10) years after its Start Date (the
"Expiration Date"). The Option shall cease to vest and unvested Options shall
expire when the Optionee ceases to be a member of the Board or a consultant of
the Company. The date on which the Optionee ceases to be a member of the Board
or a consultant of the Company shall be referred to as the "Termination Date."
An Option may be exercised after the Termination Date only as set forth below:
(a) Termination Generally. If the Optionee ceases to be a
member of the Board or consultant of the Company for any reason except death or
disability, then each vested Option (as defined in Section 7.2 of this Plan)
then held by such Optionee may be exercised by the Optionee within seven (7)
months after the Termination Date, but in no event later than the Expiration
Date.
(b) Death or Disability. If the Optionee ceases to be a
member of the Board or consultant of the Company because of the death of the
Optionee or the disability of the Optionee within the meaning of Section
22(e)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), then
each vested Option (as defined in Section 7.2 of this Plan) then held by such
Optionee may be exercised by the Optionee (or the Optionee's legal
representative) within twelve (12) months after the Termination Date, but in no
event later than the Expiration Date.
8. EXERCISE OF OPTIONS.
8.1 Exercise Period. Subject to the provisions of Section 8.5
below, Options shall be exercisable as they vest.
8.2 Notice. Options may be exercised only by delivery to the
Company of an exercise agreement in a form approved by the Committee stating the
number of Shares being purchased, the restrictions imposed on the Shares and
such representations and agreements regarding the Optionee's investment intent
and access to information as may be required by the Company to comply with
applicable securities laws, together with payment in full of the exercise price
for the number of Shares being purchased.
8.3 Payment. Payment for the Shares purchased upon exercise of
an Option may be made (a) in cash or by check; (b) by surrender of shares of
Common Stock of the Company that have been owned by the Optionee for more than
six (6) months (and which have been paid for within the meaning of Securities
and
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<PAGE> 47
Intuit Inc.
1996 Stock Option Plan
Exchange Commission ("SEC") Rule 144 and, if such shares were purchased from
the Company by use of a promissory note, such note has been fully paid with
respect to such shares) or were obtained by the Optionee in the open public
market, having a Fair Market Value equal to the exercise price of the Option;
(c) by waiver of compensation due or accrued to the Optionee for services
rendered; (d) provided that a public market for the Company's stock exists,
through a "same day sale" commitment from the Optionee and a broker-dealer that
is a member of the National Association of Securities Dealers (an "NASD Dealer")
whereby the Optionee irrevocably elects to exercise the Option and to sell a
portion of the Shares so purchased to pay for the exercise price and whereby the
NASD Dealer irrevocably commits upon receipt of such Shares to forward the
exercise price directly to the Company; (e) provided that a public market for
the Company's stock exists, through a "margin" commitment from the Optionee and
an NASD Dealer whereby the Optionee irrevocably elects to exercise the Option
and to pledge the Shares so purchased to the NASD Dealer in a margin account as
security for a loan from the NASD Dealer in the amount of the exercise price,
and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the exercise price directly to the Company; or (f) by any combination of
the foregoing.
8.4 Withholding Taxes. Prior to issuance of the Shares upon
exercise of an Option, the Optionee shall pay or make adequate provision for any
federal or state withholding obligations of the Company, if applicable.
8.5 Limitations on Exercise. Notwithstanding the exercise
periods set forth in the Grant, exercise of an Option shall always be subject to
the following limitations:
(a) An Option shall not be exercisable until such time as
this Plan (or, in the case of Options granted pursuant to an amendment
increasing the number of shares that may be issued pursuant to this Plan, such
amendment) has been approved by the stockholders of the Company in accordance
with Section 15 below.
(b) An Option shall not be exercisable unless such
exercise is in compliance with the Securities Act of 1933, as amended (the
"Securities Act") and all applicable state securities laws, as they are in
effect on the date of exercise.
(c) The Committee may specify a reasonable minimum number
of Shares that may be purchased upon any exercise of an Option, provided that
such minimum number will not prevent the Optionee from exercising the full
number of Shares as to which the Option is then exercisable.
9. NONTRANSFERABILITY OF OPTIONS. During the lifetime of the Optionee,
an Option shall be exercisable only by the Optionee or by the Optionee's
guardian or legal representative, unless otherwise permitted by the Committee.
No Option may be sold, pledged, assigned, hypothecated, transferred or disposed
of in any manner other than by will or by the laws of descent and distribution.
10. PRIVILEGES OF STOCK OWNERSHIP. No Optionee shall have any of the
rights of a stockholder with respect to any Shares subject to an Option until
the Option has been validly exercised. No adjustment shall be made for dividends
or distributions or other rights for which the record date is prior to the date
of exercise, except as provided in this Plan. The Company shall provide to each
Optionee a copy of the annual financial statements of the Company, at such time
after the close of each fiscal year of the Company as they are released by the
Company to its stockholders.
11. ADJUSTMENT OF OPTION SHARES. In the event that the number of
outstanding shares of Common Stock of the Company is changed by a stock
dividend, stock split, reverse stock split, combination, reclassification or
similar change in the capital structure of the Company without consideration,
the number of Shares available under this Plan and the number of Shares subject
to outstanding Options and the exercise price per share of such outstanding
Options shall be proportionately adjusted, subject to any required action by the
Board or stockholders of the Company and compliance with applicable securities
laws; provided, however, that no fractional shares shall be issued upon exercise
of any Option and any resulting fractions of a Share shall be rounded up to the
nearest whole Share.
12. NO OBLIGATION TO CONTINUE AS DIRECTOR. Nothing in this Plan or any
Option granted under this Plan shall confer on any Optionee any right to
continue as a director of the Company.
-3-
<PAGE> 48
Intuit Inc.
1996 Directors Stock Option Plan
13. COMPLIANCE WITH LAWS. The grant of Options and the issuance of
Shares upon exercise of any Options shall be subject to and conditioned upon
compliance with all applicable requirements of law, including without limitation
compliance with the Securities Act, compliance with all other applicable state
securities laws and compliance with the requirements of any stock exchange or
national market system on which the Shares may be listed. The Company shall be
under no obligation to register the Shares with the SEC or to effect compliance
with the registration or qualification requirement of any state securities laws,
stock exchange or national market system.
14. ACCELERATION OF OPTIONS UPON CERTAIN CORPORATE TRANSACTIONS. In the
event of (a) a dissolution or liquidation of the Company, (b) a merger or
consolidation in which the Company is not the surviving corporation (other than
a merger or consolidation with a wholly-owned subsidiary, a reincorporation of
the Company in a different jurisdiction, or other transaction in which there is
no substantial change in the stockholders of the Company or their relative stock
holdings and the Options granted under this Plan are assumed or replaced by the
successor corporation, which assumption will be binding on all Optionees), (c) a
merger in which the Company is the surviving corporation but after which the
stockholders of the Company (other than any stockholder which merges (or which
owns or controls another corporation which merges) with the Company in such
merger) own less than 50% of the shares or other equity interests in the
Company, (d) the sale of substantially all of the assets of the Company, or (e)
the acquisition, sale or transfer of a majority of the outstanding shares of the
Company by tender offer or similar transaction, the vesting of all options
granted pursuant to this Plan will accelerate and the options will become
exercisable in full prior to the consummation of such event at such times and on
such conditions as the Committee determines, and if such options are not
exercised prior to the consummation of the corporate transaction, they shall
terminate in accordance with the provisions of this Plan.
15. AMENDMENT OR TERMINATION OF PLAN. The Committee may at any time
terminate or amend this Plan (but may not terminate or amend the terms of any
outstanding option without the consent of the Optionee); provided, however, that
the Committee shall not, without the approval of the stockholders of the
Company, increase the total number of Shares available under this Plan (except
by operation of the provisions of Sections 4 and 11 above) or change the class
of persons eligible to receive Options. In any case, no amendment of this Plan
may adversely affect any then outstanding Options or any unexercised portions
thereof without the written consent of the Optionee.
16. TERM OF PLAN. Options may be granted pursuant to this Plan from
time to time within a period of ten (10) years from the Effective Date.
17. CERTAIN DEFINITIONS. As used in this Plan, the following terms
shall have the following meanings:
17.1 "Parent" means any corporation (other than the Company) in
an unbroken chain of corporations ending with the Company if each of such
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
17.2 "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 such chain.
17.3 "Affiliate" means any corporation that directly, or
indirectly through one or more intermediaries, controls or is controlled by, or
is under common control with, another corporation, where "control" (including
the terms "controlled by" and "under common control with") means the possession,
direct or indirect, of the power to cause the direction of the management and
policies of the corporation, whether through the ownership of voting securities,
by contract or otherwise.
17.4 "Fair Market Value" means, as of any date, the value of a
share of the Company's Common Stock determined as follows:
-4-
<PAGE> 49
Intuit Inc.
1996 Directors Stock Option Plan
(a) if such Common Stock is then quoted on the Nasdaq
National Market, its last reported sale price on the
Nasdaq National Market or, if no such reported sale
takes place on such date, the average of the closing
bid and asked prices;
(b) if such Common Stock is publicly traded and is then
listed on a national securities exchange, its last
reported sale price or, if no such reported sale takes
place on such date, the average of the closing bid and
asked prices on the principal national securities
exchange on which the Common Stock is listed or
admitted to trading;
(c) if such Common Stock is publicly traded but is not
quoted on the Nasdaq National Market nor listed or
admitted to trading on a national securities exchange,
the average of the closing bid and asked prices on such
date, as reported in The Wall Street Journal, for the
over-the-counter market; or
(d) if none of the foregoing is applicable, by the
Committee in good faith.
-5-
<PAGE> 50
INTUIT INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
JANUARY 15, 1999
The undersigned hereby appoints William V. Campbell, William H. Harris,
Jr. and Greg J. Santora, or any one of them, each with full power of
substitution, to represent the undersigned at the Annual Meeting of
Stockholders of Intuit Inc. to be held at 8:00 a.m. P.S.T., on January 15,
1999, at Intuit's offices at 2550 Garcia Avenue, Mountain View, California, and
at any adjournments or postponements thereof, and to vote the number of shares
the undersigned would be entitled to vote if personally present at the meeting
on the following matters:
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF ALL NOMINEES
FOR ELECTION TO THE BOARD OF DIRECTORS AND FOR PROPOSALS 2, 3, 4 AND 5.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF INTUIT. THIS
PROXY WILL BE VOTED AS DIRECTED. IN THE ABSENCE OF DIRECTION, THIS PROXY WILL
BE VOTED FOR THE NOMINEES FOR ELECTION AND FOR PROPOSALS 2, 3, 4 AND 5. IN
THEIR DISCRETION, THE PROXY HOLDERS ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF TO
THE EXTENT AUTHORIZED BY RULE 14a-4(c) PROMULGATED BY THE SECURITIES AND
EXCHANGE COMMISSION AND BY APPLICABLE STATE LAWS (INCLUDING MATTERS THAT THE
PROXY HOLDERS DO NOT KNOW, A REASONABLE TIME BEFORE THIS SOLICITATION, ARE TO
BE PRESENTED).
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
<PAGE> 51
1. ELECTION OF DIRECTORS.
Christopher W. Brody, William V. Campbell, Scott D. Cook, L. John Doerr,
Michael R. Hallman, William H. Harris, Jr. and Burton J. McMurtry.
FOR all nominees listed (except) WITHHOLD AUTHORITY
as indicated to the contrary) to vote for all nominees listed
[ ] [ ]
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
the nominee's name on the space provided below.)
================================================================================
2. APPROVAL OF AMENDMENT TO THE INTUIT INC. 1993 EQUITY INCENTIVE PLAN TO
INCREASE THE NUMBER OF SHARES OF INTUIT COMMON STOCK AVAILABLE FOR ISSUANCE
THEREUNDER FROM 13,105,000 SHARES TO 15,745,000 SHARES.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
================================================================================
3. APPROVAL OF AMENDMENT TO THE INTUIT INC. 1996 EMPLOYEE STOCK PURCHASE PLAN TO
INCREASE THE NUMBER OF SHARES OF INTUIT COMMON STOCK AVAILABLE FOR ISSUANCE
THEREUNDER FROM 500,000 SHARES TO 800,000 SHARES.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
================================================================================
4. APPROVAL OF AMENDMENT TO THE INTUIT INC. 1996 DIRECTORS STOCK OPTION PLAN TO
INCREASE THE NUMBER OF SHARES OF INTUIT COMMON STOCK AVAILABLE FOR ISSUANCE
THEREUNDER FROM 165,000 SHARES TO 195,000 SHARES.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
================================================================================
5. RATIFICATION OF ERNST & YOUNG LLP AS THE COMPANY'S AUDITORS FOR THE FISCAL
YEAR ENDING JULY 31, 1999.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
================================================================================
6. THE TRANSACTION OF SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENTS OR POSTPONEMENTS OF THE MEETING.
================================================================================
PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR(S) ON YOUR STOCK CERTIFICATE. IF
SHARES OF STOCK STAND OF RECORD IN THE NAMES OF TWO OR MORE PERSONS OR IN THE
NAME OF HUSBAND AND WIFE, WHETHER AS JOINT TENANTS OR OTHERWISE, BOTH OR ALL OF
SUCH PERSONS SHOULD SIGN THE PROXY. IF SHARES OF STOCK ARE HELD OF RECORD BY A
CORPORATION, THE PROXY SHOULD BE EXECUTED BY THE PRESIDENT OR VICE PRESIDENT AND
THE SECRETARY OR ASSISTANT SECRETARY. EXECUTORS, ADMINISTRATORS OR OTHER
FIDUCIARIES WHO EXECUTE THE ABOVE PROXY FOR A STOCKHOLDER SHOULD GIVE THEIR FULL
TITLE. PLEASE DATE THE PROXY.
Dated:____________________, 199__. ________________________________________
Signature
________________________________________
Signature (if held jointly)
