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INTUIT INC. 8-K Report, Executive Changes (Jan 21, 2011)

Filed January 21, 2011For Securities:INTU

Summary

Intuit Inc. (INTU) filed an 8-K on January 21, 2011, reporting on matters voted on at their Annual Meeting of Stockholders held on January 19, 2011. The primary focus for investors is the stockholder approval of the Amended and Restated 2005 Equity Incentive Plan. This plan amendment extends the term of the plan by four years to January 19, 2015, and significantly increases the number of shares available for awards by 31,000,000, bringing the total to 96,000,000 shares. A key change is the implementation of a 'fungible share reserve,' which impacts how different types of awards (options, stock appreciation rights, restricted stock, restricted stock units) are debited from the share pool. Specifically, options and SARs reduce the reserve by one share, while restricted stock and RSUs reduce it by 2.3 shares.

Key Highlights

  • 1Stockholders approved the Amended and Restated 2005 Equity Incentive Plan.
  • 2The term of the equity incentive plan has been extended by four additional years, ending January 19, 2015.
  • 3The number of shares available for awards under the plan has been increased by 31,000,000, to a total of 96,000,000 shares.
  • 4A 'fungible share reserve' was implemented, where options/SARs debit 1 share and restricted stock/RSUs debit 2.3 shares.
  • 5Ten directors were elected to serve on the Board.
  • 6The selection of Ernst & Young LLP as the independent registered public accounting firm for fiscal year 2011 was ratified.
  • 7A non-binding advisory resolution on executive compensation was approved.

Frequently Asked Questions

The main purpose is to continue providing Intuit with a mechanism to incentivize and retain key employees and directors through equity-based awards. The amendments, approved by stockholders, extend the plan's duration and increase the number of shares available for future grants.

The fungible share reserve changes how shares are accounted for when awarded. Options and stock appreciation rights will reduce the share pool by one share each. However, restricted stock and restricted stock units will reduce the pool by 2.3 shares each. This means that awards of restricted stock/RSUs are more dilutive on a per-share basis compared to options/SARs.

The Amended and Restated 2005 Equity Incentive Plan was approved by a majority of the votes cast. Specifically, there were 179,766,994 votes 'For,' 88,978,060 votes 'Against,' and 622,661 abstentions.

Yes, the terms of the plan related to annual non-employee director automatic grants were removed. This means automatic grants are no longer required under the plan's terms, giving the board more flexibility in how directors are compensated with equity.