8-KLeadership ChangesOther EventsExhibits & Filings

INTUIT INC. 8-K Report, Executive Changes (Dec 19, 2008)

Filed December 19, 2008For Securities:INTU

Summary

This 8-K filing from Intuit Inc. on December 19, 2008, primarily details the approval of amendments to the company's 2005 Equity Incentive Plan by its stockholders. The amendments extend the plan's term, add a significant number of shares for awards, and introduce new provisions regarding stock options, stock appreciation rights, and non-employee director grants. Key changes include prohibiting options or SARs with an exercise price below fair market value at grant, and eliminating the potential for deferred settlement of SARs. These changes aim to enhance Intuit's ability to attract and retain talent while adhering to compensation deductibility rules. Furthermore, the filing discloses significant stock trading plans adopted by two key individuals: Scott D. Cook, founder and board member, and Stephen M. Bennett, a board member. Mr. Cook's family trust plans to sell up to 2 million shares and contribute 400,000 shares to a charitable foundation over approximately one year, starting in February 2009. The charitable foundation also plans to sell these contributed shares. Mr. Bennett has adopted a plan to exercise and sell up to 900,000 shares from existing stock options expiring in 2009, with transactions contingent on achieving certain price thresholds. All these plans are structured to comply with Rule 10b5-1 requirements for pre-arranged stock sales.

Key Highlights

  • 1Stockholders approved amendments to the 2005 Equity Incentive Plan, extending its term to December 9, 2010, and adding 10,000,000 shares.
  • 2Amendments prohibit stock options and stock appreciation rights (SARs) from being granted with an exercise price below fair market value on the grant date.
  • 3The plan amendments eliminate the potential for deferred settlement of stock appreciation rights.
  • 4New share limits are imposed on awards granted to individual participants to comply with IRS Section 162(m) regulations for performance-based compensation.
  • 5Scott D. Cook's family trust adopted a Rule 10b5-1 plan to sell up to 2,000,000 shares and contribute 400,000 shares to a charitable foundation between February and December 2009.
  • 6Stephen M. Bennett adopted a Rule 10b5-1 plan to exercise and sell up to 900,000 shares from expiring stock options, subject to market price conditions.
  • 7All disclosed stock trading plans are intended to comply with Rule 10b5-1 of the Exchange Act, allowing for pre-arranged stock transactions without insider trading concerns.

Frequently Asked Questions

The primary purpose of the amendments, approved by stockholders, was to extend the plan's duration, increase the number of shares available for awards to support future compensation needs, and refine certain terms related to stock options and stock appreciation rights to align with best practices and regulatory requirements, particularly concerning fair market value at grant and deductibility of compensation.

Scott D. Cook, through his family trust, adopted a Rule 10b5-1 trading plan to systematically sell up to 2,000,000 shares and contribute 400,000 shares to a charitable foundation. This plan is designed to diversify his holdings and fulfill philanthropic goals over a specified period (February-December 2009) in a manner compliant with securities regulations, rather than indicating concerns about the company's performance.

Rule 10b5-1 of the Exchange Act allows company insiders to establish pre-arranged plans for buying or selling company stock at a time when they do not possess material, non-public information. This provides an affirmative defense against allegations of insider trading. For investors, this means the planned transactions by Mr. Cook and Mr. Bennett are structured to be executed automatically based on pre-determined parameters, not on current inside information.

Yes, the amendments impose several restrictions. Notably, stock options and stock appreciation rights cannot be granted with an exercise price lower than the fair market value of Intuit stock on the date of the grant. Additionally, to comply with IRS Section 162(m) on compensation deductibility, there are limits on the maximum number of shares that can be awarded to an individual participant in any given year.