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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 7, 1999
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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INTUIT INC.
(Exact name of Registrant as specified in its charter)
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<S> <C> <C>
DELAWARE 7372 77-0034661
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. employer
incorporation or organization) Classification Code Number) identification no.)
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2535 GARCIA AVENUE
MOUNTAIN VIEW, CALIFORNIA 94043
(650) 944-6000
(Address, including zip code, and telephone number, including area
code, of Registrant's principal executive offices)
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CATHERINE L. VALENTINE
VICE PRESIDENT, GENERAL COUNSEL AND CORPORATE SECRETARY
INTUIT INC.
2550 GARCIA AVENUE, M.S. 52028
P.O. BOX 7850
MOUNTAIN VIEW, CALIFORNIA 94039-7850
(650) 944-6656
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
GORDON K. DAVIDSON, ESQ.
KENNETH A. LINHARES, ESQ.
EILEEN DUFFY ROBINETT, ESQ.
FENWICK & WEST LLP
TWO PALO ALTO SQUARE
PALO ALTO, CALIFORNIA 94306
(650) 494-0600
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME TO
TIME AFTER THE EFFECTIVE DATE OF THIS
REGISTRATION STATEMENT.
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If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, please check the following box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, please check the following box. [X]
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] _______
If this form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ] __________
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED SHARE(1) PRICE(1) REGISTRATION FEE
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Common Stock, par value $0.001 per
share 288,816 shares $76.25 $22,022,220 $6,122
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(1) Estimated solely for the purpose of calculating the amount of the
registration fee, pursuant to Rule 457(c) under the Securities Act, based
on the average of the high and low prices of the common stock on the
Nasdaq National Market on May 4, 1999.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THESE
SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED MAY 7, 1999
288,816 SHARES
INTUIT INC.
COMMON STOCK
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All of the 288,816 shares of common stock of Intuit Inc. are being sold by
stockholders of Intuit. Intuit will not receive any proceeds from the sale of
shares offered by the selling stockholders. See "Selling Stockholders" and "Plan
of Distribution."
The common stock is listed on the Nasdaq National Market under the symbol
"INTU." The shares of common stock offered will be sold as described under "Plan
of Distribution."
On May 5, 1999, the closing price per share of the common stock on the
Nasdaq National Market was $78.13.
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THE COMMON STOCK OFFERED INVOLVES A HIGH DEGREE OF
RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 2.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION, NOR ANY STATE SECURITIES
COMMISSION, HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS ___________, 1999.
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FORWARD LOOKING STATEMENTS
This prospectus (including the documents incorporated by reference)
contains forward-looking statements regarding Intuit's plans, expectations,
estimates and beliefs. These statements involve risks and uncertainties, and
actual results could differ materially from those reflected in the
forward-looking statements. Forward-looking statements in this prospectus are
typically identified by words such as "believes," "anticipates," "expects,"
"intends," "will" and "may" and other similar expressions. In addition, any
statements that refer to expectations, projections or other characterizations of
future events or circumstances are forward-looking statements. Intuit will not
necessarily update the information in this prospectus if and when any
forward-looking statement later turns out to be inaccurate. Some of the
important risks and uncertainties that may affect Intuit's future results and
performance are described in "Risk Factors," below. Additional information about
factors that could affect Intuit's future results and events is included in
Intuit's reports filed with the SEC and incorporated by reference in this
prospectus.
INTUIT
Intuit develops, sells and supports small business accounting, tax
preparation and consumer finance desktop software, financial supplies (such as
computer checks, envelopes and invoices) and Internet products and services for
individuals, small businesses and financial professionals. Our products and
services are designed to automate commonly performed financial tasks and to
simplify the way individuals and small businesses manage their finances. Intuit
commenced operations in March 1983 and was incorporated in California in March
1984. In March 1993, Intuit was reincorporated in Delaware. Our principal
executive offices are located at 2535 Garcia Avenue, P.O. Box 7850, Mountain
View, California 94039-7850. Our telephone number is (650) 944-6000.
RISK FACTORS
This offering is risky. Anyone who may receive common stock under this
prospectus should carefully consider the following risk factors in addition to
the other information presented in or incorporated by reference into this
prospectus and any prospectus supplement.
OUR REVENUE AND EARNINGS ARE HIGHLY SEASONAL. Sales of tax products are
heavily concentrated from November through March. Sales of consumer finance and
small business products are typically strongest during the year-end holiday
buying season. These seasonal patterns mean that revenue is usually strongest
during the quarters ending January 31 and April 30. We experience lower revenues
for the quarters ending July 31 and October 31, while our operating expenses to
develop and manage products and services continue to be incurred at relatively
constant levels during these periods. This can result in significant operating
losses, particularly in the July 31 and October 31 quarters when revenues are
lower. The seasonality of our revenue patterns has been further intensified by
the June 1998 acquisition of Lacerte, a professional tax software company whose
product sales are also linked to the annual income tax return season.
OUR QUARTERLY AND ANNUAL FINANCIAL RESULTS FLUCTUATE SIGNIFICANTLY. Our
operating results can fluctuate for reasons other than seasonality, such as the
timing of product releases, non-recurring events such as acquisitions and
dispositions, and product price cuts in quarters that have relatively high fixed
expenses. For example, revenue for the second quarter of fiscal 1999 was up 46%
compared to the second quarter of fiscal 1998. The increase resulted mainly from
three factors. First, second quarter fiscal 1999 results include revenue from
Lacerte, which we acquired in June 1998. The second factor was the timing of
recent QuickBooks releases that occurred in June 1998 (version 6.0) and December
1998 (QuickBooks '99). Prior to these releases, Intuit had not launched a new
version of QuickBooks since December 1996 (version 5.0). The third factor was
the timing of Intuit's TurboTax state tax products. Most state tax products were
released in January (second quarter) in fiscal 1999, but in February (third
quarter) of fiscal 1998. Thus, the second quarter of fiscal 1999 benefited from
an acquisition and several important product releases. Similarly, nonrecurring
events can cause annual results to vary significantly from year to year. Because
of these factors, we believe that year-over-year quarterly or annual comparisons
of operating results may not be meaningful and results for any given quarter or
year do not necessarily predict future performance.
WE FACE INTENSE COMPETITION FROM MANY COMPANIES IN ALL OF OUR BUSINESS
AREAS, BOTH DOMESTICALLY AND INTERNATIONALLY. Many of our competitors have
significantly greater financial, technical and marketing resources and broader
product lines than we do. In particular, Microsoft currently competes with
Intuit in a number of product and service areas, and is expected to begin to
compete in other areas such as tax preparation software in the future. Microsoft
is a formidable competitor, and its presence in the personal tax market would
lead to additional pricing
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pressures, and could adversely impact Intuit's ability to negotiate advantageous
terms with major retailers. In addition, most computer users access computer
products and services and the Internet using certain key technologies, platforms
and standards, such as Microsoft Windows. The dominance of any technology,
platform or standard can limit the ability of software application vendors and
providers of Internet-related content and services, such as Intuit, to gain
access to customers. The provider of the dominant technology, standard or
service has the ability to give preferred placement to its own offerings or to
those of favored partners, or even to deny access to certain products or
companies.
Our major domestic competitor in small business accounting software is
currently Peachtree Software. Peachtree offers a multi-user accounting software
product that competes directly with the new multi-user version of QuickBooks
that we first released in late fiscal 1998. Peachtree was recently acquired by
Sage, which is one of our major competitors in Europe.
Our financial supplies business competes with a number of business forms
companies, and is experiencing increased pricing pressures from many of our
competitors.
In the personal tax area, our major competitor is currently Block
Financial Corporation, the makers of TaxCut software. Competition has been
fierce during fiscal 1999, and our TurboTax products experienced lower average
selling prices in response to increased price competition. We expect Microsoft
to be a competitor in the personal tax area in the next tax season.
We attempt to monitor regulatory and public policy developments that could
affect the current business climate and have recently focused our efforts on
developments that could affect the markets for our tax preparation products.
During calendar year 1998, for example, the federal government considered
extending current services provided by the IRS - specifically, the free
provision of certain tax forms using the Internet. The IRS also sought greater
authority in the future to permit taxpayers to fill out government-provided tax
forms and return them directly to the government, although this would require a
significant expansion of the current IRS infrastructure. In the future, federal
or state authorities may take actions that lead to greater government
competition with the private sector. In addition, frequently discussed
legislative simplification of federal or state income tax laws could reduce
demand for tax preparation software generally. These actions could impact Intuit
as well as others in the tax preparation industry.
In desktop consumer finance software, Microsoft is currently our primary
competitor. Quicken competes directly with Microsoft Money, which is
aggressively promoted with free product offers through various distribution
channels, and with advertising targeted to Quicken users. These competitive
pressures, as well as other factors, have negatively affected Quicken revenue
and profitability, particularly during fiscal 1997, when Quicken revenue
declined by over 20%.
Intuit faces intense competition in its Internet-based businesses. There
are very low barriers to entry, and the market is extremely fragmented, making
it difficult for any one company to acquire the scale that is necessary
(although not, by itself, sufficient) to begin generating any meaningful revenue
or profits. Many of our competitors are either large companies that can afford
major investments in this business, or small privately held companies that can
benefit from a much narrower product focus than Intuit, and whose shareholders
will tolerate significant and extended operating losses. We expect that
competition will increase as we expand our Internet offerings, and as more
companies expand their businesses onto the Internet.
Internationally, we face a number of competitors, including Sage and
Microsoft in the European small business market. Strong competition in this
market may have a more significant impact on our international business in the
future, as the focus of our business in Europe is shifting more toward the small
business market.
OUR INTERNET STRATEGY REQUIRES US TO SUCCESSFULLY ADOPT A NEW BUSINESS
MODEL AND TO ESTABLISH AND MAINTAIN NEW BUSINESS RELATIONSHIPS. The Internet
represents a new business model for us, where revenues come from advertising,
marketing, transaction and processing fees, instead of software product sales.
Website traffic is an important foundation for this business model. We may need
to establish additional relationships, such as our relationships with Excite,
America Online and others, to help us continue to increase traffic, so that we
can increase advertising revenue and transaction and processing fees. However,
such relationships may require us to make significant financial commitments to
these companies. For example, the Excite agreement currently calls for us to
share revenue generated from our Quicken.com site and the America Online
agreement calls for us to make significant guaranteed payments to America Online
over the term of the agreement. We may not be able to establish these additional
relationships, especially given the relatively limited number of leading
Internet portal companies. In addition, if our competitors establish
relationships with these companies, particularly exclusive
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relationships, our ability to expand our Internet businesses could be
substantially hindered. Even if we establish these relationships, they may not
result in significant increases in traffic or revenue.
On January 19, 1999, Excite and At Home Corporation announced a proposed
merger in which At Home would acquire all of the outstanding stock of Excite. We
currently have voting rights with respect to 5.3 million shares of Excite common
stock (representing approximately 9.9% of Excite's outstanding common stock) and
have voted our shares in favor of the proposed merger. See "--We hold
investments in Checkfree Corporation and Excite, Inc. that have been very
volatile." We currently expect the proposed merger to have a neutral or positive
impact on our business relationship with Excite. However, it is possible that
the merger could have a negative impact on our business relationship with
Excite.
WE NEED TO QUICKLY AND SUCCESSFULLY BUILD SKILLS AS A WEBSITE DEVELOPER
AND PUBLISHER, WHICH ARE COMPLEMENTARY BUT DIFFERENT SKILLS FROM DESKTOP
SOFTWARE DEVELOPMENT SKILLS. The operational requirements for online Internet
businesses are very different from the requirements of our desktop software
business. We must continue to develop new and continually evolving operational
infrastructures to support and manage our Internet-based businesses and the
complex operational requirements of our strategic Internet relationships. In
particular, development cycles for Web-based products are extremely short and
irregular, while desktop software products generally have much longer and more
predictable development and release cycles. The rapid pace of change in this
area creates unique risks, and we may be unable to manage costs effectively
and/or to meet customer expectations.
OUR INTERNET BUSINESSES REQUIRE SIGNIFICANT RESEARCH AND DEVELOPMENT AND
MARKETING EXPENDITURES. We believe that sales and marketing and research and
development expenses related to Internet-based products and services will
continue to increase as a percentage of our total net revenue during fiscal
1999. This could have an adverse effect on our operating results, particularly
if revenue from these services does not meet expectations.
THE EXPANSION OF OUR INTERNET-BASED PRODUCTS HAS HAD A SIGNIFICANT IMPACT
ON OUR DEVELOPMENT PROCESS. Our desktop software products tend to have a
predictable, structured development cycle of about 12-24 months. Once new
products are released, they generally are not modified (except to fix defects)
until the next scheduled product upgrade. The development process for
Internet-based products is much more rapid, much less predictable and has much
shorter development cycles. Getting products and services launched quickly is
crucial to competitive success, but this time pressure may result in lower
product quality. Once launched, Internet-based offerings must be continuously
and rapidly updated to incorporate changing technology and customer demands, as
well as to fix defects.
INTERNET BUSINESSES FACE RISKS RELATING TO CUSTOMER PRIVACY AND SECURITY
AND INCREASING REGULATION. Our Internet businesses are subject to the risks of
Internet businesses generally. For example, customers may refuse to transact
business over the Internet due to privacy or security concerns. A major breach
of customer privacy or security, even by another company, could have a
significant negative effect on our Internet-based businesses. We cannot be
assured that consumers' use of the Internet, particularly for commercial
transactions, will continue to increase as rapidly as it has during the past few
years. If Internet use does not grow as a result of privacy or security
concerns, or for other reasons, our Internet-based businesses would be seriously
adversely affected. In addition, because our Internet-based products are
available in many states and foreign countries, we may be subject to regulation
and taxation in many additional jurisdictions. Also, to the extent that states
or foreign countries are generally successful in their efforts to impose taxes
on Internet commerce, the growth of the use of the Internet could slow
substantially, which could have an adverse effect on the growth of our
Internet-based businesses. If Internet activity becomes heavily regulated in
other respects, that could have major negative consequences for our
Internet-based businesses.
EXPANSION OF OUR DESKTOP PRODUCT INTERNET CONNECTIVITY INITIATIVES DEPENDS
TO SOME EXTENT ON INDUSTRY ADOPTION OF OFX AS A CONNECTIVITY standard. In 1996,
we decided to move from a proprietary electronic communications link between our
software and financial institutions, to an Internet-based link based on a
standard called Open Financial Exchange(TM) (referred to as "OFX"). While we
believe that OFX is the right strategic approach for us, we face risks and
challenges in implementing it. Financial institutions may not accept and
implement OFX as rapidly as we would like, or they may adopt alternative
connectivity standards that may not support interoperability with OFX. If OFX is
not adopted by many financial institutions, we may need to incur significant
expenses to alter our products to conform to other evolving standards.
IN ORDER TO SUCCEED IN THE PAYROLL BUSINESS, WE MUST CONTINUE TO IMPROVE
THE INTEGRATION OF THE OPERATIONS OF OUR PAYROLL PROCESSING SERVICE PROVIDER AND
EXPAND AVAILABILITY FOR OUR ONLINE PAYROLL PROCESSING SERVICE. In October 1998,
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we launched our new online payroll processing service available through our
newer QuickBooks products. On May 3, 1999 we acquired Computing Resources, Inc.
("CRI"), the company that has been the payroll processing service provider for
this new business since October 1998. The acquisition will result in significant
acquisition-related costs, as well as business integration challenges common in
all acquisitions. The payroll processing business involves the time-sensitive
operation of computerized processing systems, and differs in many respects from
the operations of our current software and Internet businesses. We may be unable
to provide accurate and timely payroll information, cash deposits or tax return
filings, due to integration issues or other problems. Failure to provide high
quality service could be costly to correct. It could also have a significant
negative impact on our ability to attract and retain customers, who we believe
will have a low tolerance for payroll processing errors. In addition, we expect
this service to be unprofitable in its initial stages until we are able to
accumulate a large number of subscribers from our QuickBooks customer base to
offset the fixed costs of providing the payroll service. It will therefore be
necessary to maintain satisfactory relationships with CRI's existing key
customers to avoid unanticipated operating losses from this business. We are
managing the new customer activation process at a measured rate in order to
insure high quality service levels and to minimize the impact of any potential
service disruptions during the initial phases of the service. Though initial
customer reaction to this service has been positive, it has not been a
significant contributor to Intuit's financial performance in fiscal 1999, and
there is no assurance that it will be widely accepted. If subscriptions to this
service don't meet expectations, future operating results could suffer.
OUR FUTURE SUCCESS DEPENDS UPON OUR ABILITY TO QUICKLY INTRODUCE PRODUCT
ENHANCEMENTS AND NEW PRODUCTS THAT MEET CUSTOMER DEMANDS. The markets in which
we compete are characterized by rapidly changing customer demands, continuous
technological changes and improvements, shifting industry standards, frequent
new product introductions by other companies and the emergence of new
competitors. We must respond to these changes quickly in order to remain
competitive.
OUR TAX PRODUCTS MUST FOLLOW A DEMANDING AND RIGID ANNUAL DEVELOPMENT AND
RELEASE CYCLE. We must update our tax products each year to reflect tax law
changes. We cannot predict how complex the tax law changes will be each year,
when the changes will be made or when tax forms included in the products will be
available from the IRS and state tax agencies. The rigid development timetable
for tax products increases the risk of a product launch delay as well as the
risk of product errors. See "--Product bugs can be expensive to fix and can
cause Intuit to lose customers." Since the tax return preparation season is
brief, it is imperative that Intuit release tax products as early as possible.
Late release of tax products in any year could cause our current and prospective
customers not to purchase a tax preparation software product, or to choose a
competitive product for that year's tax season, making it more difficult for us
to sell our products to those customers in future tax seasons. If for any reason
we failed to release our tax products in time for use during the then current
tax year, we would lose substantially all of our revenues for that fiscal year,
and our ability to market tax preparation software successfully in the future
would be greatly impaired. In addition, we guarantee to our professional
customers that our state tax products will be released by specified dates. Late
release of such products could result in a significant loss of revenues in that
fiscal year as a result of the guarantee and the loss of future business.
OUR WEB-BASED TAX PREPARATION AND ELECTRONIC FILING SERVICES MUST HANDLE
EXTREMELY HEAVY CUSTOMER DEMAND DURING THE PEAK TAX SEASON. During fiscal 1999,
we have experienced significantly higher revenues from our Internet-based Web
TurboTax tax preparation service and our electronic tax return filing services
compared to fiscal 1998. In prior years we did not experience any significant
technical problems with the Web TurboTax or electronic tax return filing
systems. However, the risk of such problems increases with increased demand for
these services. During the 1999 tax-filing season, we experienced higher than
expected demand for Web TurboTax, and we were required to increase our capacity
quickly to handle the increased demand. In the electronic filing area, we
experienced an interruption in service in February 1999 caused by a power outage
at our facility. This outage was not material because it was fairly early in the
tax season. However, during the 1999 tax filing season we also determined that
the heavy volume of and peak filing periods for electronically filed returns
could cause routine server maintenance procedures to take longer than we
expected. In one instance, we decided to complete a routine back-up of our
electronic filing system as a precaution to avoid any loss of data prior to the
tax filing deadline. The heavy volume of returns in the database and related
technical matters caused routine server maintenance procedures to result in the
unavailability of the electronic filing system to customers for a period of 14
hours on April 11-12, 1999. This downtime affected the electronic filing of tax
returns from both our Web TurboTax service and our TurboTax desktop software
products. We do not believe that the service outage had a material impact on our
electronic filing revenue, prevented customers from completing and filing their
returns in a timely manner or posed a risk that customer data would be lost or
corrupted. However, we did experience negative publicity due to the outage. The
exact level of future demand for Web TurboTax and electronic filing services
will be very difficult to predict, and in future tax filing seasons we could
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experience significant financial and public relations consequences if our
capacity to handle online and electronic filing customers is insufficient during
the peak filing period, or if the service is unavailable for other reasons such
as technical difficulties at our data center. Although we believe we have
addressed the issues that caused our service outages, a similar interruption in
service during the tax filing season in future years could have significant
financial and public relations consequences.
PRODUCT BUGS CAN BE EXPENSIVE TO FIX AND CAN CAUSE INTUIT TO LOSE
CUSTOMERS. New software products often contain undetected errors or "bugs" that
can hinder product performance, give users incorrect results and/or damage a
user's data. These problems can be expensive to fix, particularly if we need to
provide a major corrective release or pay refunds to customers. Poor product
quality can cause Intuit to lose revenue, customers and market share or incur
higher technical support and warranty costs. The short development cycles
associated with our Internet-based products may result in lower product quality.
See "--We need to quickly and successfully build skills as a website developer
and publisher, which are complementary but different skills from desktop
software development skills." In addition, we guarantee the accuracy of the tax
calculations performed by our federal personal tax products and have agreed to
reimburse any penalties paid by a customer to the Internal Revenue Service
solely as a result of miscalculation on a form prepared using our personal tax
products. If these products contain a calculation error affecting a significant
number of consumer customers' returns, we could be subject to liability claims
and be required to make substantial payments.
Year 2000 and other date-related processing issues may also cause software
products to fail or malfunction unless the problems are corrected. If our
products have significant Year 2000 defects, we could suffer lost sales or other
negative consequences resulting from customer dissatisfaction, including
additional litigation. See "--Year 2000 poses risks and related litigation."
PRODUCT RETURNS MIGHT EXCEED RESERVES. Like most other software companies,
we have a generous return policy for our distributors and retailers, although we
encourage them to make returns promptly. We also have a generous return
policy for direct customers. We establish reserves for product returns in our
financial statements, based on estimated future returns of products. In
establishing reserves, we take into account promotional activities, the timing
of new product introductions, distributor and retailer inventories of our
products and other factors. In the past, returns have not generally exceeded the
reserves we have established for them. However, if in the future, retail
sell-through of a major product falls significantly below expectations, or if
competitors' promotional or other activities result in increased product returns
for Intuit, returns could exceed the reserves established for them. In addition,
the rate of product returns could increase as other changes in our distribution
channels occur or existing products become obsolete.
During the tax return preparation season, we generally ship significantly
more tax products to our distributors and retailers than we expect them to sell
during the tax season, in order to reduce the risk that distributors or
retailers will run out of product inventory during the short tax season. As a
result, we have historically accepted significant returns of our tax products
each year, principally from April to September, and expect to continue to do so
in the future.
WE FACE INCREASING COMPETITION FOR ACCESS TO DISTRIBUTION CHANNELS. There
are increasing numbers of companies competing for access to the distribution
channels that we use. Our arrangements with our distributors and retailers may
be terminated by either party at any time without cause. Distributors and
retailers generally carry competing products. Retailers typically have a limited
amount of shelf space and promotional resources, for which there is intense
competition. There can be no assurance that distributors and retailers will
continue to purchase our products or provide our products with adequate levels
of shelf space and promotional support. Any termination or significant
disruption of our relationship with any of our major distributors or retailers,
or a significant reduction in sales volume attributable to any of our principal
resellers, could materially adversely affect our results of operations and
financial condition. Also, the bankruptcy, deterioration in financial condition
or other business difficulties of a distributor or retailer could impact our
ability to collect accounts receivable from the affected party. This could have
an adverse effect on our operating results and financial condition if
uncollectable amounts exceed our bad debt reserves.
During the past few years, there has been increasing consolidation among
retailers, and we expect this consolidation trend to continue. Consolidation has
resulted in a number of large retailers with significant bargaining power. This
factor, combined with intense competition for access to retail shelf space and
promotional support, has made it challenging for us to negotiate financially
favorable terms with retailers. We expect to face even greater
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challenges in negotiating retail relationships in the future, particularly given
Microsoft's expected entrance into the personal tax market.
An element of our retail sales efforts that has been important over the
last several years is our original equipment manufacturer, or "OEM,"
relationships with hardware and software manufacturers. We sell our software to
OEMs to be combined with their products, which are then sold to consumers.
Although these OEM relationships have been a good source of new customers for
Intuit, the sale prices we receive for OEM sales are often much lower than
retail or direct sale prices, especially for consumer finance products. If
competitive pressures or other factors cause us to further increase the
percentage of our products that are sold through OEMs, our revenue and operating
margins could be adversely affected.
BUSINESSES THAT WE ACQUIRE MUST BE INTEGRATED INTO OUR BUSINESS. Our
recent acquisitions include Milkyway KK in January 1996; Interactive Insurance
Services (now Intuit Insurance Services) in June 1996; GALT Technologies, Inc.
in September 1996; Nihon Micom in March 1997; Lacerte Software Corporation and
Lacerte Educational Services Corporation in June 1998; and Computing Resources,
Inc. in May 1999. We may complete other acquisitions in the future. Acquisitions
expand Intuit's size, product lines, personnel and geographic locations.
Integrating and organizing new businesses requires extensive operational,
financial and management information systems.
OUR RECENT ACQUISITIONS HAVE RESULTED IN SIGNIFICANT ACQUISITION-RELATED
EXPENSES. During the past three years, we have recorded significant
acquisition-related expenses. These expenses have had, and will continue to
have, a negative impact on our operating results. Acquisition-related expenses
include amortization of purchased software (reflected in cost of goods sold) and
amortization of goodwill and purchased intangibles (reflected in operating
expenses), as well as charges for purchased research and development. These
expenses have resulted in a reduction in after-tax net income of $46.5 million
in fiscal 1996, $34.6 million in fiscal 1997, $44.3 million in fiscal 1998 and
$27.4 million in the first six months of fiscal 1999.
In particular, the acquisition of Lacerte resulted in a one-time charge
for in-process research and development of $53.8 million in fiscal 1998 and will
result in the amortization of $358.2 million of intangible assets over the five
years beginning with fiscal 1999. In the first quarter of fiscal 1999, we
changed the estimated life of goodwill for Lacerte from three to five years to
reflect the revised estimate of the period of time we expect to benefit from the
purchased assets of the acquired business. We began accounting for this change
in the first quarter of fiscal 1999. The change resulted in a $19.0 million
decrease in amortization expense and an increase in net income by approximately
$14.5 million, or $0.24 per share, for the six months ended January 31, 1999 but
will result in continuing amortization expenses (with a corresponding decrease
in net income) during fiscal 2002 and 2003.
Excluding the impact of our acquisition of CRI, and assuming no additional
acquisitions and no acceleration of amortization, future amortization will
reduce net income by approximately $55.9 million, $50.0 million, $43.3 million
and $40.1 million for the years ending July 31, 1999 through 2002, respectively.
We estimate that we will amortize approximately $190 million of intangible
assets in connection with our acquisition of CRI. We anticipate that the
majority of this amount will be amortized over five years. If we complete
additional acquisitions or accelerate amortization in the future, there would be
an incremental negative impact on operating results.
OUR RECENT ACQUISITION OF LACERTE POSES A NUMBER OF RISKS THAT COULD
AFFECT OUR ABILITY TO ACHIEVE THE ANTICIPATED BENEFITS OF THAT ACQUISITION. We
currently have Lacerte operating as a separate entity, with separate sales and
marketing, research and development, customer support and administrative
organizations. This may create operating inefficiencies and communication
difficulties. If, in the future, Intuit and Lacerte decide to integrate their
operations, the integration could present a number of risks and divert
management's attention from other matters. Intuit assumed substantially all of
the liabilities related to Lacerte's business with the exception of certain tax
liabilities. If unanticipated liabilities are discovered later, we will likely
have to satisfy those liabilities.
OUR RECENT ACQUISITION OF CRI POSES NEW RISKS ASSOCIATED WITH MANAGEMENT
OF A PAYROLL PROCESSING SERVICE. CRI provides payroll processing services to
small businesses. These services require the timely preparation of employee
paychecks, direct deposits of employee salaries, the deposit of state and
federal payroll taxes and certain tax return filings. Failure to make timely and
accurate paycheck deliveries, bank deposits, tax payments or tax returns is
likely to adversely affect our relationships and reputation with customers, who
we believe will have a low tolerance for payroll processing errors, and may
result in liability to customers or tax authorities. The time-sensitive
operation of a payroll processing business and its related systems differs in
many respects from
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<PAGE> 9
the operations of our current software and Internet businesses. Though we have
had operating experience with CRI since October 1998 through the payroll
processing service associated with QuickBooks, we have not previously directly
operated and managed a payroll processing service. In addition, CRI's business
is currently significantly dependent on a financial institution that is
currently the largest source of CRI's customers. Failure to maintain a
satisfactory business and contractual relationship with that financial
institution would have a serious adverse impact on CRI's revenues and operating
results.
WE MUST PROVIDE RESPONSIVE CUSTOMER SERVICE AND TECHNICAL SUPPORT. We have
a full-time customer service and technical support staff that is supplemented by
seasonal employees and outsourcing during periods of peak call volumes, such as
during the tax return filing season, or shortly after a major product launch.
Despite our efforts to adequately staff and equip our customer service and
support operations, during peak periods, we cannot respond promptly to all
customer requests for assistance. During the past six months, customers
experienced significantly longer than expected "hold" times because our staffing
was inadequate to handle higher than anticipated call volume. We may also have
an unusually high volume of requests, and be unable to respond promptly, if
large numbers of customer order shipments are delayed or if our products have
bugs. When we experience customer service and support problems, they can
adversely affect customer relationships and our financial performance.
BUSINESS CONDITIONS IN INTERNATIONAL MARKETS CAN NEGATIVELY IMPACT OUR
FINANCIAL PERFORMANCE. Our international revenues come primarily from Japan
(small business products) and Germany, Canada and the United Kingdom (small
business, consumer finance and personal tax products). We also operate in
smaller European and Asia/Pacific markets. Developing and localizing products
for foreign markets involves more risk, and is more time-consuming and costly
than developing products for the U.S. market. Recruiting and retaining talented
software engineers and managers can be more difficult in our international
offices as well. Delays or other problems in product launches may be more likely
because of these factors, and they can impact our financial performance. For
example, our German subsidiary experienced a delay in releasing the German
QuickBooks product during fiscal 1998, which contributed to lower revenues in
the first two quarters of fiscal 1998 compared to fiscal 1997. We are also
experiencing product launch delays in Germany in fiscal 1999. Economic
conditions in international markets can also negatively affect our business, as
they did in Europe in fiscal 1996. In addition, the economic situation in Japan
had a negative impact on international revenue and profits during fiscal 1998
and continues to negatively impact fiscal 1999 international revenue and
profits.
In response to disappointing results in Europe during fiscal 1998, we have
accelerated the process of refocusing our product development efforts toward
small business products in selected larger markets. As a result, we are devoting
fewer resources to consumer finance and tax products, and to smaller geographic
markets. This shift in strategy is negatively impacting international operating
results during fiscal 1999. We also introduced our first release of QuickBooks
in Japan in September 1998 in an effort to target a lower-priced market than our
current small business products reach in Japan. However, the overall market for
small business products and services in Japan continues to suffer due primarily
to poor economic conditions. While we expect that international revenues will be
flat or slightly down for fiscal year 1999, there is a risk that they could be
significantly lower if our strategic initiatives are not effective, or if we
experience adverse currency fluctuations.
WE DEPEND ON A SINGLE SOURCE SUPPLIER OF CHECKS. Our financial supplies
business (which represented approximately 16% of our net revenues in fiscal
1998) has only one source for its domestic checks. In September 1995, we entered
into an exclusive five-year contract with John H. Harland Co. to print all of
our domestic check products. Checks accounted for approximately 75% of supplies
revenue in fiscal 1998. We believe our relationship with Harland is strong, and
the financial terms of the contract are favorable for Intuit. However, if we
experience any problems with Harland's performance, it could have a material
negative impact on sales of supplies and on Intuit as a whole.
WE FACE INTENSE COMPETITION FOR QUALIFIED EMPLOYEES. We believe that our
future success and growth will depend on our ability to attract and retain
qualified employees in all areas of our business. Like many of our competitors,
we have had difficulties during the past few years hiring and retaining
employees. Although we believe we offer competitive compensation and a good
working environment, we face intense competition for qualified employees,
particularly those with technical and marketing expertise.
OUR ABILITY TO PROTECT OUR PROPRIETARY TECHNOLOGY IS LIMITED. We rely on a
combination of copyright, patent, trademark and trade secret laws, and employee
and third-party nondisclosure agreements, to protect our software products and
other proprietary technology. We do not have any copy-protection mechanisms in
our
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<PAGE> 10
software because we do not believe they are practical or effective. Current U.S.
laws that prohibit copying give us only limited practical protection from
software "pirates," and the laws of many other countries provide almost no
protection for our intellectual property. Policing unauthorized use of our
products is difficult, expensive and time-consuming and we expect that software
piracy will be a persistent problem for our desktop software products. In
addition, the unique technology of the Internet may tend to increase, and
provide new methods for, illegal copying of the technology used in our
Internet-based products.
WE RELY ON THIRD PARTY LICENSES FOR SOME OF OUR PRODUCTS AND SERVICES. We
do not necessarily own all of the software and other technologies used in our
products and services, but we have all licenses that we believe are necessary
for using that technology. We do not believe that our products, trademarks and
other proprietary rights infringe anyone else's proprietary rights. However,
other parties occasionally claim that features or content of our products, or
our use of certain trademarks, may infringe their property rights. Past claims
have not resulted in any significant litigation, settlement or licensing
expenses, but future claims could. Third parties may assert infringement claims
against us in the future, and claims could result in costly litigation or
require us to obtain a license to intellectual property rights of third parties.
Third party licenses may not be available on reasonable terms, or at all.
SOME OF OUR PRODUCTS AND SERVICES ARE REGULATED BUSINESSES UNDER FEDERAL
OR STATE LAWS THAT DO NOT APPLY TO MOST SOFTWARE COMPANIES. We offer several
regulated products and services through separate subsidiary corporations.
Intuit's Quicken Investment Services, Inc. subsidiary (or "QISI") is registered
as an investment adviser with the SEC and is subject to certain state regulatory
laws as well. QISI is responsible for certain of the investment-related features
in our products and services. The business activities of Interactive Insurance
Services ("IIS"), which operates the Quicken InsureMarket website, are subject
to state insurance regulations. Intuit's QuickenMortgage service is offered by a
subsidiary called Intuit Lender Services, Inc. (or "ILSI"), which is subject to
state mortgage and loan broker regulations. Establishing and maintaining
regulated subsidiaries requires significant financial, legal and management
resources. If the subsidiaries fail to comply with applicable regulations, they
could face liability to customers and/or penalties and sanctions by government
regulators. In addition, federal and state regulations may restrict the business
practices of these subsidiaries in a variety of areas, including advertising and
distribution arrangements.
Our Quicken products allow customers of participating brokerages to trade
securities through their broker's website. Quicken InsureMarket may expand our
site to include other insurance products, such as variable annuities, that are
considered "securities" under federal and state laws. We believe we have
structured these services in a way that does not subject Intuit to direct
government regulation. However, it is possible that these services, or other
services we may offer in the future, may be regulated under federal and/or state
securities broker-dealer laws or other regulations. We continually analyze new
business opportunities, and any new businesses that we pursue may require
additional costs for regulatory compliance.
REGULATION OF ENCRYPTION TECHNOLOGY COULD ADVERSELY AFFECT OUR
INTERNATIONAL SALES AND SERVICES. Various Intuit products contain powerful
encryption technology. Government regulations currently prohibit this technology
from being exported outside of the United States and Canada. Some agencies of
the federal government are seeking to relax export laws, but others are seeking
to tighten export restrictions on software containing encryption technology.
These regulations may adversely affect international sales of our desktop
software as well as our ability to provide the level of security customers are
seeking in Internet-based products and services on a worldwide basis.
YEAR 2000 POSES RISKS AND RELATED LITIGATION. While our Year 2000 costs
incurred to date (including litigation costs) have not been material, we will
incur additional costs as we complete our Year 2000 plan. Based on preliminary
assessments resulting from the early phases of our plan in each of the targeted
areas, we are currently unable to determine whether additional costs to achieve
Year 2000 readiness will be material. Additional costs incurred may include but
are not limited to: the cost of manufacturing and distributing free solutions
for products that are not Year 2000 ready; the impact of lost sales due to
distribution of free Year 2000 ready solutions for affected products; the
administrative costs of completing the Year 2000 project; the cost of correcting
our internal systems; and the cost of implementing necessary contingency plans.
While we are dedicating substantial resources toward attaining Year 2000
readiness, we can't be certain that we will be successful in our efforts to
address all Year 2000 issues. If we are not successful, there could be
significant adverse effects on our operations. For example, failure to achieve
Year 2000 readiness for our internal systems could delay our ability to
manufacture and ship products, disrupt our customer service and technical
support facilities, or interrupt customer access to our online products and
services. If our products are not Year
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<PAGE> 11
2000 ready, we could suffer lost sales or other negative consequences resulting
from customer dissatisfaction, including additional litigation (see discussion
below). We also rely heavily on third parties such as manufacturing suppliers,
service providers, financial institutions and a large retail distribution
channel. If these or other third parties experience Year 2000 failures or
malfunctions, there could be a material negative impact on our ability to
conduct ongoing operations. For example, our ability to manufacture and ship
products into the retail channel, to receive retail sales information necessary
to maintain proper inventory levels, or to complete online transactions
dependent upon third party service providers, could be affected. Many of our
products are significantly interconnected with heavily regulated financial
institutions. Our relationships with financial institutions could be impacted if
we do not achieve Year 2000 readiness in a manner and on a time schedule that
permits them to comply with regulatory requirements. We may also incur
additional costs if we are required to accelerate our Year 2000 readiness to
meet financial institution requirements. As with all companies, we also rely on
other more widely used entities such as government agencies, public utilities
and other external forces common to business and industry. Consequently, if such
entities experience Year 2000 failures, this could disrupt our ability to
conduct ongoing operations.
In an effort to reduce the risks associated with the Year 2000, we have
incorporated contingency planning as part of our five-phase Year 2000 plan,
building upon disaster recovery and contingency planning that we already have in
place. This includes identifying areas where we are most vulnerable to Year 2000
risk and putting contingency plans in place before we experience potential
failures. While we believe our contingency plans will reduce certain risks, we
are still assessing the need for additional contingency plans in areas where we
believe there may be significant exposure. Despite our efforts, we can't be
certain that all contingencies can be anticipated or adequately provided for.
Several class action lawsuits were filed against Intuit in California and
New York, alleging Year 2000 issues with the online banking functionality in
certain versions of our Quicken products, and it is possible that we will face
additional lawsuits. We do not believe the lawsuits have merit and intend to
defend them vigorously. Regardless of outcome, litigation can have an adverse
impact on Intuit because of defense costs, diversion of management resources and
other factors.
The above discussion regarding costs and risks for the Year 2000 is based
on our best estimates given information that is currently available, and is
subject to change. As we continue to progress with this initiative, we may
discover that actual results will differ materially from these estimates.
WE HOLD INVESTMENTS IN CHECKFREE CORPORATION AND EXCITE, INC. THAT HAVE
BEEN VERY VOLATILE. As of January 31, 1999, we held 10,175,000 shares, or
approximately 19.9%, of the outstanding common stock of Checkfree Corporation,
and 5,800,000 shares, or approximately 11%, of the outstanding common stock of
Excite, Inc. Checkfree and Excite are in the Internet and electronic commerce
industries, in which stock prices have historically been volatile. Accordingly,
it is possible that the market price of one or both of these companies' stock
could decline substantially and quickly (as occurred during August and September
1998), which could result in a material reduction in the carrying value of these
assets. We recently initiated a lawsuit against Checkfree, which could have a
negative impact on the price of Checkfree's common stock. The trading range for
Checkfree's common stock for the 52 weeks ended May 5, 1999 was $5.75 to $69.12,
and its closing price on May 5, 1999 was $44.50. The trading range for Excite's
common stock for the 52 weeks ended May 5, 1999 was $18.00 to $187.87, and its
closing price on May 5, 1999 was $159.75. In February 1999, we sold 450,000 of
our Excite shares. In April 1999, we transferred 4,350,000 shares of our Excite
common stock to our Lacerte Software Corporation subsidiary, which entered into
contractual arrangements for a forward sale of these shares in May 1999. Intuit
continues to have an economic risk associated with 1,000,000 Excite shares.
Our ability to dispose of the Checkfree and Excite stock is restricted by
volume trading limitations and other contractual arrangements, which increases
our exposure to the risk of owning these securities. As noted above, Excite and
At Home Corporation recently announced a proposed merger in which At Home would
acquire all of the outstanding stock of Excite. If the proposed merger is
completed as currently contemplated, any shares of Excite common stock we hold
at the time of the closing of the merger would be exchanged for shares of At
Home common stock. The market price of At Home common stock has also experienced
significant volatility. Any shares of At Home common stock that we acquire in
the merger may be subject to regulatory restrictions on resale, which would
increase our exposure to the risk of owning the shares. If our investments in
these companies, or other future investments, become impaired (more than a
temporary decline in value), or if they are sold at a substantial loss, the
decline in value or loss would result in a charge that could have a material
adverse impact on net income.
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THE MARKET PRICE OF OUR COMMON STOCK HAS BEEN VOLATILE. In recent periods,
the stock market has experienced volatility that has particularly affected the
market prices of equity securities of many high technology companies, including
Intuit. Some of the volatility has been related to our operating results or
other events directly affecting Intuit, but some of the volatility does not
appear to be directly related to Intuit's performance. The trading prices of the
stocks of many technology companies, including Intuit, are at or near historical
highs and reflect price/earnings ratios substantially above historical levels.
The trading range for our common stock for the 52 weeks ended May 5, 1999 is
$34.18 to $110.75 and the closing price on May 5, 1999 was $78.13. In the past,
securities class action litigation has been filed against companies after a
period of volatility in the market prices of their securities. Litigation
against Intuit could result in substantial costs and a diversion of management's
attention and resources, which could materially adversely affect Intuit's
operations.
WE HAVE IMPLEMENTED A NUMBER OF ANTI-TAKEOVER PROVISIONS THAT MAY
ADVERSELY AFFECT THE MARKET PRICE OF OUR COMMON STOCK. In the future, Intuit may
issue shares of preferred stock without further stockholder approval. The Intuit
board of directors can determine the terms and conditions, and the rights,
privileges and preferences of any preferred stock. The rights of our common
stock holders will be subject to, and may be adversely affected by, the rights
of the holders of any preferred stock that may be issued in the future. The
issuance of preferred stock can provide desirable flexibility in connection with
possible acquisitions and other corporate purposes. However, it could make it
more difficult for a third party to acquire, or discourage a third party from
acquiring, a majority of our outstanding voting stock. Intuit does not have any
present plans to issue any shares of preferred stock. However, on April 29,
1998, the board of directors adopted a stockholder rights plan and amended
Intuit's bylaws to eliminate the right of stockholders holding 10% of Intuit's
outstanding common stock to call a special meeting of stockholders. In addition,
Section 203 of the Delaware General Corporation Law restricts certain business
combinations with any "interested stockholder" as defined under Delaware Law.
These provisions and Intuit's stockholder rights plan could discourage potential
acquisition proposals and could delay or prevent a change in control of Intuit.
They also may adversely affect the market price of our common stock, and may
prevent changes in the management of Intuit.
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<PAGE> 13
USE OF PROCEEDS
Intuit will not receive any of the proceeds from the sale of shares by the
selling stockholders.
SELLING STOCKHOLDERS
The following table sets forth certain information known to Intuit with
respect to the beneficial ownership of the common stock as of May 5, 1999 by the
selling stockholders. The selling stockholders are the former shareholders of
CRI. They have not had any position, office or other material relationship with
Intuit within the three years before May 3, 1999, the date on which Intuit
acquired CRI, other than as a result of the business relationship between
Intuit and CRI. As of May 3, 1999, Ranson W. Webster was appointed a Vice
President of Intuit and Harry D. Hart became an employee of Intuit. Both Mr.
Webster and Mr. Hart have employment contracts with Intuit.
The table assumes that the selling stockholders sell all of the shares
offered by them in this offering. However, Intuit is unable to determine the
exact number of shares that will actually be sold or when or if such sales will
occur. This table also assumes that the selling stockholders do not acquire any
other shares of Intuit stock pending the offering.
The selling stockholders have advised Intuit that they are the beneficial
owners of the shares being offered.
<TABLE>
<CAPTION>
Shares Beneficially Shares Beneficially
Owned Before Offering Owned After Offering
--------------------- Shares Being ---------------------
Name Number Percent Offered Number Percent
- ---- ---------- --------- ------------ ------ -------
<S> <C> <C> <C> <C> <C>
Ranson W. Webster and Norma J. Webster JTWROS 216,233 * 216,233 0 --
Harry D. Hart and Carla J. Hart JTWROS 72,583 * 72,583 0 --
</TABLE>
- ---------------
* Less than 1%
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PLAN OF DISTRIBUTION
The selling stockholders are former stockholders of Computing Resources,
Inc., a company that Intuit acquired on May 3, 1999. The selling stockholders
are bound by a registration rights agreement with Intuit. To Intuit's knowledge,
the selling stockholders have not entered into any agreement, arrangement or
understanding with any particular broker or market maker with respect to the
shares offered hereby, nor does Intuit know the identity of the brokers or
market makers that will participate in the offering.
The shares of common stock may be offered and sold from time to time by
the selling stockholders or by pledgees, donees, transferees and other
successors in interest. The selling stockholders will act independently of
Intuit in making decisions with respect to the timing, manner and size of each
sale. Sales may be made over the Nasdaq National Market or otherwise, at then
prevailing market prices, at prices related to prevailing market prices or at
negotiated prices. The shares may be sold by one or more of the following:
- a block trade in which the broker-dealer engaged by a selling
stockholder will attempt to sell the shares as agent but may position
and resell a portion of the block as principal to facilitate the
transaction;
- purchases by the broker-dealer as principal and resale by the broker
or dealer for its account pursuant to this prospectus; and
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers.
Intuit has been advised by the selling stockholders that they have not, as
of the date of this prospectus, entered into any arrangement with a
broker-dealer for the sale of shares through a block trade, special offering, or
secondary distribution of a purchase by a broker-dealer. Broker-dealers engaged
by the selling stockholders may arrange for other broker-dealers to participate
in selling shares. Broker-dealers will receive commissions or discounts from the
selling stockholders in amounts to be negotiated immediately prior to the sale.
In connection with distributions of the shares or otherwise, the selling
stockholders may enter into hedging transactions with broker-dealers or other
financial institutions. In connection with these transactions, broker-dealers or
financial institutions may engage in short sales of the shares in the course of
hedging the positions they assume with selling stockholders. The selling
stockholders may also sell shares short and redeliver the shares to close out
such short positions. The selling stockholders may also enter into option or
other transactions with broker-dealers or other financial institutions that
require the delivery to the broker-dealer or financial institution of the
shares, which the broker-dealer or financial institution may resell or otherwise
transfer under this prospectus. The selling stockholders may also loan or pledge
the shares to a broker-dealer or other financial institution and the
broker-dealer or financial institution may sell the shares so loaned or, upon a
default, the broker-dealer may sell the pledged shares under this prospectus. In
addition, any securities covered by this prospectus that qualify for sale under
Rule 144 of the Securities Act may be sold under Rule 144 rather than under this
prospectus. The selling stockholders have agreed with Intuit in the registration
rights agreement not to sell any of the shares under this prospectus in an
underwritten offering without Intuit's prior written consent.
Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from the selling stockholders in amounts
to be negotiated in connection with the sale. Broker-dealers and any other
participating broker-dealers may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with the sales, and any commission,
discount or concession may be deemed to be underwriting discounts or commissions
under the Securities Act.
Intuit has advised the selling stockholders that the anti-manipulation
rules under the Exchange Act may apply to sales of shares in the market and to
the activities of the selling stockholders and their affiliates. The selling
stockholders have advised Intuit that during the time they may be engaged in the
attempt to sell registered shares, they will:
- not engage in any stabilization activity in connection with any of
Intuit's securities;
- not bid for or purchase any of Intuit's securities or any rights to
acquire Intuit's securities, or attempt to induce any person to purchase
any of Intuit's securities or rights to acquire Intuit's securities
other than as permitted under the Exchange Act;
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<PAGE> 15
- not sell or distribute the shares until after the prospectus has been
appropriately amended or supplemented, if required, to set forth the
terms thereof; and
- make all sales of shares in broker's transactions through broker-dealers
acting as agents, in transactions directly with market makers or in
privately negotiated transactions where no broker or other third party
(other than the purchaser) is involved.
The agreement between Intuit and the selling stockholders provides the
procedure that the selling stockholders must follow before they sell shares
under this prospectus. First, a selling stockholder must give written notice to
Intuit that he intends to sell shares. Then, within three trading days after
Intuit receives the notice, Intuit must either notify the selling stockholder
that Intuit believes that this prospectus is current or that it should be
amended before it is used in connection with any sales of shares. If this
prospectus should be amended, Intuit has agreed to file an amendment as soon as
practicable. If Intuit notifies the selling stockholder that it believes that
this prospectus is current, then the selling stockholder must sell the shares
during the next 20 trading days. There will be an interval of at least 3 trading
days between any two 20 trading day resale periods.
Intuit has the ability to suspend the use of this prospectus if, in the
good faith judgment of the board of directors of Intuit, it would be seriously
detrimental to Intuit and its stockholders for resales of shares to be made.
Each period of suspension may last up to 30 days, with a maximum of three
periods of suspension during this offering and a maximum of 60 consecutive days
of suspension.
This offering will terminate on the earlier of:
- May 3, 2000; or
- the date on which all shares offered have been sold by the selling
stockholders.
Intuit has agreed to pay the expenses of registering the shares under the
Securities Act, including registration and filing fees, printing expenses,
administrative expenses and certain legal and accounting fees. The selling
stockholders will bear all discounts, commissions or other amounts payable to
underwriters, dealers or agents as well as fees and disbursements for legal
counsel retained by any selling stockholder.
Intuit and the selling stockholders have agreed to indemnify each other
and certain other related parties for certain liabilities in connection with the
registration of the Shares offered hereby.
Upon the occurrence of any of the following events, a supplement to this
prospectus will be filed, if required, under Rule 424(b) under the Securities
Act to include additional disclosure before offers and sales of the securities
in question are made:
- to the extent the securities are sold at a fixed price or at a price
other than the prevailing market price, such price would be set forth in
the prospectus,
- if the securities are sold in block transactions and the purchaser acting
in the capacity of an underwriter wishes to resell, such arrangements
would be described in the prospectus,
- if the selling stockholders sell to a broker-dealer acting in the
capacity as an underwriter, such broker-dealer will be identified in the
prospectus
- if the compensation paid to broker-dealers is other than usual and
customary discounts, concessions or commissions, disclosure of the terms
of the transaction would be included in the prospectus; and
- if a selling stockholder notifies Intuit that a donee or pledgee intends
to sell more than 500 shares.
LEGAL MATTERS
The validity of the shares of common stock offered hereby will be passed upon
for Intuit by Fenwick & West LLP, Palo Alto, California.
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EXPERTS
The consolidated financial statements of Intuit Inc. appearing in Intuit
Inc.'s Annual report (Form 10-K) for the year ended July 31, 1998, have been
audited by Ernst & Young LLP, independent auditors, as set forth in their report
thereon included therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
The combined financial statements of Lacerte Software Corporation and
Lacerte Educational Services Corporation incorporated in this prospectus by
reference to the audited historical financial statements as of March 31, 1997
and 1998 and for each of the three years in the period ended March 31, 1998
included as Exhibit 99.02 to Intuit Inc.'s Form 8-K dated May 18, 1998 have been
so incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given upon the authority of said firm as experts in
auditing and accounting.
DOCUMENTS INCORPORATED BY REFERENCE IN THIS
PROSPECTUS
The SEC allows Intuit to "incorporate by reference" the information that
Intuit files with the SEC. This means that Intuit can disclose important
information by referring the reader to those SEC filings. The information
incorporated by reference is considered to be part of this prospectus, and later
information Intuit files with the SEC will update and supersede this
information. Intuit incorporates by reference the documents listed below and any
future filings made with the SEC under Section 13(a), 13(c), 14, or 15(d) of the
Securities Exchange Act of 1934 until termination of the offering:
- Annual report on Form 10-K for the fiscal year ended July 31, 1998.
- Quarterly report on Form 10-Q for the quarter ended October 31,
1998.
- Quarterly report on Form 10-Q for the quarter ended January 31,
1999.
- Current report on Form 8-K dated May 18, 1998.
- Current report on Form 8-K/A, Amendment No. 2, dated May 18, 1998
and filed on May 22, 1998.
- Current report on Form 8-K dated June 22, 1998 and filed on July 6,
1998.
- Current report on Form 8-K/A, Amendment No. 1, dated June 22, 1998
and filed on September 8, 1998.
- Current report on Form 8-K dated October 5, 1998.
- Current report on Form 8-K dated May 3, 1999.
- The description of Intuit's common stock contained in Intuit's
registration statement on Form 8-A, and any amendment or report
filed for the purpose of updating such description.
- The description of Intuit's Preferred Stock Purchase Rights
contained in Intuit's registration statement on Form 8-A, and any
amendment or report filed for the purpose of updating such
description.
SOME OF THE INFORMATION ABOUT INTUIT THAT MAY BE IMPORTANT TO AN
INVESTMENT DECISION IS NOT PHYSICALLY INCLUDED IN THIS PROSPECTUS. INSTEAD, THE
INFORMATION IS "INCORPORATED" INTO THIS PROSPECTUS BY REFERENCE TO ONE OR MORE
DOCUMENTS THAT INTUIT FILED WITH THE SEC. THESE DOCUMENTS (INCLUDING ANY
EXHIBITS THAT ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO THE INFORMATION
THAT THIS PROSPECTUS INCORPORATES) ARE AVAILABLE UPON REQUEST WITHOUT CHARGE
FROM INVESTOR RELATIONS, INTUIT INC., 2550 GARCIA AVENUE, P.O. BOX 7850 MOUNTAIN
VIEW CALIFORNIA 94039-7850 (TELEPHONE NUMBER (650) 944-2713). RECIPIENTS SHOULD
MAKE ALL REQUESTS FOR DOCUMENTS BY THE FIFTH BUSINESS DAY BEFORE THEY MAKE THEIR
FINAL INVESTMENT DECISION, TO BE SURE THE DOCUMENTS ARRIVE ON TIME. INFORMATION
THAT HAS BEEN INCORPORATED BY REFERENCE IS CONSIDERED PART OF THIS
15
<PAGE> 17
PROSPECTUS AND DISCLOSED TO INVESTORS, WHETHER OR NOT INVESTORS OBTAIN A COPY OF
THE DOCUMENT CONTAINING THE INFORMATION.
This prospectus may contain information that updates, modifies or is
contrary to information in one or more of the documents incorporated by
reference in this prospectus. Reports Intuit files with the SEC after the date
of this prospectus may also contain information that updates, modifies or is
contrary to information in this prospectus or in documents incorporated by
reference in this prospectus. Investors should review these reports as they may
disclose a change in the business, prospects, financial condition or other
affairs of Intuit after the date of this prospectus.
WHERE YOU CAN FIND MORE INFORMATION
The documents incorporated by reference into this prospectus are available
from us upon request. We will provide a copy of any and all of the information
that is incorporated by reference in this prospectus, not including exhibits to
the information unless those exhibits are specifically incorporated by reference
into this proxy statement prospectus, to any person, without charge, upon
written or oral request.
Requests for documents should be directed to Investor Relations, Intuit
Inc., 2550 Garcia Avenue, P.O. Box 7850 Mountain View California 94039-7850;
telephone number (650) 944-2713.
We file reports, proxy statements and other information with the
Securities and Exchange Commission. Copies of our reports, proxy statements and
other information may be inspected and copied at the public reference facilities
maintained by the SEC:
Judiciary Plaza Citicorp Center Seven World Trade Center
Room 1024 5000 West Madison Street 13th Floor
450 Fifth Street, N.W. Suite 1400 New York, New York 10048
Washington, D.C. 20549 Chicago, Illinois 60661
Copies of these materials can also be obtained by mail at prescribed rates
from the Public Reference Section of the SEC, 450 Fifth Street, N.W.,
Washington, D.C. 20549 or by calling the SEC at 1-800-SEC-0330. The SEC
maintains a Website that contains reports, proxy statements and other
information regarding each of us. The address of the SEC Website is
http://www.sec.gov.
Intuit has filed a registration statement under the Securities Act with
the Securities and Exchange Commission with respect to the shares to be sold by
the selling stockholders. This prospectus has been filed as part of the
registration statement. This prospectus does not contain all of the information
set forth in the registration statement because certain parts of the
registration statement are omitted in accordance with the rules and regulations
of the SEC. The registration statement is available for inspection and copying
as set forth above.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF
AN OFFER TO PURCHASE, THE SECURITIES OFFERED BY THIS PROSPECTUS IN ANY
JURISDICTION TO OR FROM ANY PERSON TO WHOM OR FROM WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER, SOLICITATION OF AN OFFER OR PROXY SOLICITATION IN SUCH JURISDICTION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY DISTRIBUTION OF SECURITIES
PURSUANT TO THIS PROSPECTUS SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE INFORMATION SET FORTH OR
INCORPORATED HEREIN BY REFERENCE OR IN OUR AFFAIRS SINCE THE DATE OF THIS
PROSPECTUS.
16
<PAGE> 18
================================================================================
INTUIT INC.
288,816 Shares of
Common Stock
--------------------
PROSPECTUS
--------------------
MAY _____, 1999
================================================================================
<PAGE> 19
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The aggregate estimated expenses to be paid by the Registrant in
connection with this offering are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee .................. $ 6,122
Accounting fees and expenses* ........................................ 5,000
Legal fees and expenses* ............................................. 5,000
Miscellaneous* ....................................................... 3,878
Total ............................................................. $20,000
</TABLE>
- ----------------
* Estimate
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by Section 145 of the Delaware General Corporation Law,
Intuit's Certificate of Incorporation includes a provision that eliminates the
personal liability of its directors for monetary damages for breach or alleged
breach of their duty of care. In addition, as permitted by Section 145 of the
Delaware General Corporation Law, the Bylaws of Intuit provide that: (i) Intuit
is required to indemnify its directors and officers and persons serving in such
capacities in other business enterprises (including, for example, subsidiaries
of Intuit) at Intuit's request, to the fullest extent permitted by Delaware law,
including those circumstances in which indemnification would otherwise be
discretionary; (ii) Intuit may, in its discretion, indemnify employees and
agents in those circumstances where indemnification is not required by law;
(iii) Intuit is required to advance expenses, as incurred, to its directors and
officers in connection with defending a proceeding (except that it is not
required to advance expenses to a person against whom Intuit brings a claim for
breach of the duty of loyalty, failure to act in good faith, intentional
misconduct, knowing violation of law or deriving an improper personal benefit);
(iv) the rights conferred in the Bylaws are not exclusive and Intuit is
authorized to enter into indemnification agreements with its directors, officers
and employees; and (v) Intuit may not retroactively amend the Bylaw provisions
in a way that is adverse to such directors, officers and employees.
Intuit's policy is to enter into indemnity agreements with each of its and its
subsidiaries' directors and executive officers that provide the maximum
indemnity allowed to directors and executive officers by Section 145 of the
Delaware General Corporation Law and the Bylaws, as well as certain additional
procedural protections. In addition, the indemnity agreements provide that
directors and executive officers will be indemnified to the fullest possible
extent not prohibited by law against all expenses (including attorney's fees)
and settlement amounts paid or incurred by them in any action or proceeding,
including any derivative action by or in the right of Intuit, on account of
their services as directors or executive officers of Intuit or as directors or
officers of any other company or enterprise when they are serving in such
capacities at the request of Intuit. Intuit will not be obligated pursuant to
the agreements to indemnify or advance expenses to an indemnified party with
respect to proceedings or claims initiated by the indemnified party and not by
way of defense, except with respect to proceedings specifically authorized by
Intuit's Board of Directors or brought to enforce a right to indemnification
under the Indemnity Agreement, Intuit's Bylaws or any statute or law. Under the
agreements, Intuit is not obligated to indemnify the indemnified party (i) for
any expenses incurred by the indemnified party with respect to any proceeding
instituted by the indemnified party to enforce or interpret the agreement, if a
court of competent jurisdiction determines that each of the material assertions
made by the indemnified party in such proceeding was not made in good faith or
was frivolous; (ii) for any amounts paid in settlement of a proceeding unless
Intuit consents to such settlement; (iii) with respect to any proceeding brought
by Intuit against the indemnified party for willful misconduct, unless a court
determines that each of such claims was not made in good faith or was frivolous;
(iv) on account of any suit in which judgment is rendered against the
indemnified party for an accounting of profits made from the purchase or sale by
the indemnified party of securities of Intuit pursuant to the provisions of
Section 16(b) of the Securities Exchange Act of 1934 and related laws; (v) on
account of the indemnified party's conduct which is finally adjudged to have
been knowingly fraudulent or deliberately dishonest, or to constitute willful
misconduct or a knowing violation of the law; (vi) on account of any conduct
from which the indemnified party believed to be contrary to the best interests
of Intuit or its stockholders; (vii) on account of conduct that constituted a
breach of the indemnified
II-1
<PAGE> 20
party's duty of loyalty to Intuit or its stockholders; or (viii) if a final
decision by a court having jurisdiction in the matter shall determine that such
indemnification is not lawful.
The indemnification provision in the Bylaws, and the indemnity agreements
entered into between Intuit and its directors and executive officers, may be
sufficiently broad to permit indemnification of Intuit's officers and directors
for liabilities arising under the Securities Act of 1933.
The indemnity agreements with Intuit's officers and directors require Intuit to
maintain director and officer liability insurance to the extent reasonably
available. Intuit currently maintains a director and officer liability insurance
policy.
II-2
<PAGE> 21
ITEM 16. EXHIBITS.
The following exhibits are filed herewith or incorporated by reference herein:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- ------- -------------
<S> <C>
2.01 Exchange Agreement dated as of March 2, 1999 by and among Registrant,
Computing Resources, Inc., Ranson W. Webster and Harry D. Hart, as
amended by Amendment No. 1 thereto dated April 30, 1999. Pursuant to
Item 601(b)(2) of Regulation S-K, schedules have been omitted but
will be furnished supplementally to the Commission upon request.(1)
3.01 Certificate of Incorporation of Intuit dated February 1, 1993.(2)
3.02 Certificate of Amendment to Intuit's Certificate of Incorporation
dated December 14, 1993.(3)
3.03 Certificate of Amendment to Intuit's Certificate of Incorporation
dated January 18, 1996.(4)
3.04 Certificate of Designations of Series B Junior Participating
Preferred Stock dated May 1, 1998.(5)
3.05 Amended and Restated Rights Agreement, dated October 5, 1998.(6)
3.06 Certificate of Retirement of Series A Preferred Stock dated September
16, 1998.(6)
3.07 Bylaws of Intuit, as amended and restated effective April 29,
1998.(7)
4.01 Registration Rights Agreement dated as of May 3, 1999 by and among
Registrant and the former stockholders of Computing Resources,
Inc.(1)
4.02 Form of Specimen Certificate for Intuit's Common Stock.(6)
4.03 Form of Right Certificate for Series B Junior Participating Preferred
Stock (included in Exhibit 3.05).(6)
5.01 Opinion of Fenwick & West regarding legality of the securities being
registered.
23.01 Consent of Fenwick & West (included in Exhibit 5.01).
23.02 Consent of Ernst & Young LLP, Independent Auditors.
23.03 Consent of PricewaterhouseCoopers LLP, Independent Auditors.
24.01 Power of Attorney (see Page II-5).
</TABLE>
(1) Filed as an exhibit to Intuit's Form 8-K (File No. 0-21180) filed with the
SEC on May 7, 1999 and incorporated by reference.
(2) Filed as an exhibit to Intuit's Registration Statement on Form S-1, filed
with the SEC on February 3, 1993, as amended (File No. 33-57884) and
incorporated by reference.
(3) Filed as an exhibit to Intuit's Form 10-K (File No. 0-21180) as originally
filed with the SEC on October 31, 1994, as amended, and incorporated by
reference.
(4) Filed as an exhibit to Intuit's Form 10-Q (File No. 0-21180) for the
quarter ended January 31, 1996, filed with the SEC on March 15, 1996 and
incorporated by reference.
(5) Filed as an exhibit to Intuit's Registration Statement on Form 8-A (File
No. 0-21180) filed with the SEC on May 5, 1998 and incorporated by
reference.
(6) Filed as an exhibit to Intuit's Form 10-K (File No. 0-21180) for the
fiscal year ended July 31, 1998, filed with the SEC on October 6, 1998 and
incorporated by reference.
(7) Filed as an exhibit to Intuit's Form 8-K (File No. 0-21180) filed with the
SEC on May 2, 1998 and incorporated by reference.
II-3
<PAGE> 22
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made pursuant to this Registration Statement, a post-effective amendment to this
Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933 (the "Securities Act");
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the Registration Statement (notwithstanding the foregoing,
any increase or decrease in volume or securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement); and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement; provided, however, that paragraphs (1)(i)
and (1)(ii) do not apply if the information required to be included
in a post-effective amendment by paragraphs (1)(i) or (1)(ii) is
contained in any periodic report filed with or furnished to the
Securities and Exchange Commission by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934
(the "Exchange Act") that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment shall be deemed a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Exchange Act) that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-4
<PAGE> 23
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Mountain View, State of California, on May 7, 1999.
INTUIT INC.
By: /s/ Greg J. Santora
----------------------------------
Greg J. Santora
Senior Vice President and
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS that each individual whose signature appears
below constitutes and appoints William H. Harris, Jr. and Greg J. Santora, and
each of them, his or her attorneys-in-fact and agents, each with the power of
substitution, for him or her and in his or her name, place and stead, in any and
all capacities, to sign any and all amendments (including post-effective
amendments) to this registration statement, and to sign any registration
statement for the same offering covered by this registration statement that is
to be effective upon filing pursuant to Rule 462(b) promulgated under the
Securities Act of 1933, and all post-effective amendments thereto, and to file
the same, with all exhibits thereto and all documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or his or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
- ---- ----- ----
<S> <C> <C>
PRINCIPAL EXECUTIVE OFFICER:
/s/ William H. Harris, Jr. President, Chief Executive Officer May 7, 1999
- ------------------------------------------- and Director
William H. Harris, Jr.
PRINCIPAL FINANCIAL OFFICER AND PRINCIPAL
ACCOUNTING OFFICER:
/s/ Greg J. Santora Senior Vice President and Chief Financial May 7, 1999
- ------------------------------------------- Officer
Greg J. Santora
ADDITIONAL DIRECTORS:
/s/ William V. Campbell Chairman of the Board of Directors May 7, 1999
- -------------------------------------------
William V. Campbell
/s/ Scott D. Cook Chairman of the Executive Committee of May 7, 1999
- ------------------------------------------- the Board of Directors
Scott D. Cook
/s/ Christopher W. Brody Director May 7, 1999
- -------------------------------------------
Christopher W. Brody
/s/ L. John Doerr Director May 7, 1999
- -------------------------------------------
L. John Doerr
/s/ Donna L. Dubinsky Director May 7, 1999
- -------------------------------------------
Donna L. Dubinsky
/s/ Michael R. Hallman Director May 7, 1999
- -------------------------------------------
Michael R. Hallman
/s/ Burton J. McMurtry Director May 7, 1999
- -------------------------------------------
Burton J. McMurtry
</TABLE>
II-5
<PAGE> 24
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- ------- -------------
<S> <C>
5.01 Opinion of Fenwick & West regarding legality of the securities being issued.
23.01 Consent of Fenwick & West (included in Exhibit 5.01).
23.02 Consent of Ernst & Young LLP, Independent Auditors.
23.03 Consent of PricewaterhouseCoopers LLP, Independent Auditors.
24.01 Power of Attorney (see Page II-5 of this Registration Statement).
</TABLE>
<PAGE> 1
EXHIBIT 5.01
May 7, 1999
Intuit Inc.
2535 Garcia Avenue
Mountain View, California 94043
Gentlemen/Ladies:
At your request, we have examined the Registration Statement on Form S-3
(the "Registration Statement") to be filed by you with the Securities and
Exchange Commission (the "Commission") on or about May 7, 1999, in connection
with the registration under the Securities Act of 1933, as amended, of an
aggregate of 288,816 shares of your common stock (the "Stock"), all of which are
presently issued and outstanding and will be sold by selling stockholders (the
"Selling Stockholders"). The Selling Stockholders are former shareholders of
Computing Resources, Inc. ("CRI"), a company that you acquired on May 3, 1999
pursuant to that certain Exchange Agreement by and among Intuit Inc. (the
"Company"), CRI and the Selling Stockholders dated as of March 2, 1999, as
amended by Amendment No. 1 thereto dated April 30, 1999 (as so amended, the
"Exchange Agreement").
In rendering this opinion, we have examined the following:
(1) the Certificate of Incorporation of the Company, as amended, as
certified by the Secretary of State of Delaware on September 17,
1998;
(2) the Bylaws of the Company, as certified by the Secretary of the
Company on April 30, 1998;
(3) the Registration Statement, together with the Exhibits filed as a
part thereof;
(4) the Prospectus prepared in connection with the Registration
Statement;
(5) the resolutions of the Board of Directors of the Company adopted by
unanimous written consent as of February 2, 1999 with respect to the
Exchange Agreement, the transactions contemplated by the Exchange
Agreement, the Registration Statement and the Stock and certified by
the Assistant Secretary of the Company on May 3, 1999;
(6) oral verification from the Company's transfer agent of the number of
outstanding shares of the Company's common stock as of the date
hereof;
(7) a Management Certificate addressed to us and dated of even date
herewith executed by the Company containing certain factual and
other representations;
(8) the Exchange Agreement under which the Selling Stockholders acquired
the Stock to be sold by them as described in the Registration
Statement;
(9) the documents delivered by the Selling Stockholders at the closing
of the transactions contemplated by the Exchange Agreement,
including representations and warranties as to certain matters; and
(10) the Company's fiscal 1998 Annual Report on Form 10-K and subsequent
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
By telephone call to the offices of the Commission, we have also confirmed
the continued effectiveness of the Company's registration under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). By review of the records
of the Commission appearing on the Commission's Website, we have confirmed the
timely filing by you of all reports required to be filed by you pursuant to
Rules 13, 14 and 15 promulgated under the Exchange Act.
<PAGE> 2
In our examination of documents for purposes of this opinion, we have
assumed, and express no opinion as to, the genuineness of all signatures on
original documents, the authenticity and completeness of all documents submitted
to us as originals, the conformity to originals of all documents submitted to us
as copies, the legal capacity of all natural persons executing the same, the
lack of any undisclosed termination, modification, waiver or amendment to any
document reviewed by us and the due authorization, execution and delivery of all
documents where due authorization, execution and delivery are prerequisites to
the effectiveness thereof.
As to matters of fact relevant to this opinion, we have relied solely upon
our examination of the documents referred to above and have assumed the current
accuracy and completeness of the information included in the documents referred
to above. We have made no independent investigation or other attempt to verify
the accuracy of any of such information or to determine the existence or
non-existence of any other factual matters; however, we are not aware of any
facts that would cause us to believe that the opinion expressed herein is not
accurate.
We are admitted to practice law in the State of California, and we express
no opinion herein with respect to the application or effect of the laws of any
jurisdiction other than the existing laws of the United States of America and
the State of California and (without reference to case law or secondary sources)
the existing Delaware General Corporation Law.
Based upon the foregoing, it is our opinion that the 288,816 shares of
Stock to be sold by the Selling Stockholders pursuant to the Registration
Statement are validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to all references to us, if any, in the
Registration Statement, the Prospectus constituting a part thereof and any
amendments thereto.
This opinion speaks only as of its date and we assume no obligation to
update this opinion should circumstances change after the date hereof. This
opinion is intended solely for your use as an exhibit to the Registration
Statement for the purpose of the above sale of the Stock and is not to be relied
upon for any other purpose.
Very truly yours,
FENWICK & WEST LLP
By: /s/ Kenneth A. Linhares
------------------------------------
Kenneth A. Linhares, a Partner
<PAGE> 1
EXHIBIT 23.02
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Intuit Inc. for the
registration of 288,816 shares of its common stock and to the incorporation by
reference therein of our report dated August 19, 1998, with respect to the
consolidated financial statements and schedule of Intuit, Inc. included in its
Annual Report (Form 10-K) for the year ended July 31, 1998, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
Palo Alto, California
May 7, 1999
<PAGE> 1
EXHIBIT 23.03
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 333-_____) of
Intuit Inc. of our report dated May 15, 1998 relating to the combined financial
statements of Lacerte Software Corporation and Lacerte Education Services
Corporation, which appears in the Current Report on Form 8-K of Intuit Inc.
dated May 18, 1998. We also consent to the reference to us under the heading
"Experts" in such Registration Statement.
PRICEWATERHOUSECOOPERS LLP
Dallas, Texas
May 7, 1999
