Exhibit 10.16
Description of Intuit Inc. Executive Stock Ownership and Matching Unit Program
Intuit Inc. (the “Company”) launched the Intuit Inc. Executive Stock Ownership
Matching Unit Program (the “Program”) on May 15, 2003. Participation in the
Program, which is intended to demonstrate management and Board commitment to the
Company, strengthen retention, and align executives’ interests with those of the
Company’s stockholders, is mandatory for all members of the Board of Directors
and all officers at the Senior Vice President level and above.
The Program consists of two parts. First, the Program requires that members of
the Board, Executive Vice Presidents and Senior Vice Presidents hold – and
continue to hold throughout their service to the Company – at least 3,000 shares
of Company common stock. The Chief Executive Officer (“CEO”) is required to hold
at least 100,000 shares. Shares that count toward this ownership requirement
include shares acquired through open market purchases, ESPP purchases, shares
held from option exercises, shares of restricted stock and shares subject to
restricted stock unit awards. Directors and officers must meet these ownership
requirements by the later of (1) May 2006, or (2) three years from the date on
which they became subject to the Program. If the ownership requirements are not
met within this timeframe, 50 percent of future bonus awards (for officers) or
annual cash retainers (for directors) will be made in stock until compliance is
achieved.
Second, the Program contains a matching unit component to encourage officers to
acquire and hold shares of Company stock. Specifically, for each two shares of
common stock purchased by an officer at the level of Senior Vice President and
above, other than the CEO, the Company will award the officer a matching unit
equal to one share of common stock, up to a maximum of 1,500 matching unit
shares. (The CEO and members of the Board are not eligible for matching awards.)
Matching units are awarded on the date the officer purchases the shares (the
“Award Date”). The shares that are matched count towards the Program’s ownership
requirements. However, shares subject to matching unit awards do not count
toward the Program’s ownership requirements.
Prior to December 9, 2004, matching units awarded under the Program were made
pursuant to the Intuit Inc. 2002 Equity Incentive Plan (the “2002 Plan”) in the
form of stock bonus awards. Since December 9, 2004, matching awards have been
made pursuant to the Intuit Inc. 2005 Equity Incentive Plan (the “2005 Plan”) in
the form of restricted stock units. The 2002 Plan and the 2005 Plan were
approved by the Company’s stockholders on January 18, 2002 and December 9, 2004,
respectively.
The terms of the 2002 Plan or the 2005 Plan (as applicable) and the Matching
Unit Grant Agreement documenting each award govern the officer’s and the
Company’s rights and responsibilities with respect to the award. In general,
matching units vest in full on the fourth anniversary of the Award Date,
provided the officer has remained continuously employed by the Company until
such date. If the officer’s employment terminates prior to vesting:

  •   due to resignation or by the Company for Cause (as defined in the Matching
Unit Grant Agreement), the award will terminate without having vested as to any
of the underlying shares;

  •   due to Retirement (as defined in the Matching Unit Grant Agreement) or by
the Company other than for Cause, the award will vest pro rata based on the
officer’s number of full months of service since the Award Date;

 

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  •   due to death or Total Disability (as defined in the Matching Unit Grant
Agreement) the award will vest in full on the officer’s termination date; or

  •   within one year following a Corporate Transaction (as defined in the
Matching Unit Grant Agreement) the award will vest in full on the officer’s
termination date.

If an officer sells, gifts or otherwise transfers the common stock that caused
the Company to make a matching award (i.e., the shares that were matched
pursuant to the Program) prior to the time the award vests, the officer will
forfeit the entire matching award and any rights to any shares subject thereto
unless the officer holds (1) shares the officer owned before he or she became
subject to the Program, (2) shares acquired while the officer participated in
the Program that have not been matched, and/or (3) matching award shares that
have vested in a number equal to or greater than the number of shares that
caused the Company to make the matching award. All officers eligible for
matching units are required to pre-clear all sales, gifts or other transfers of
Company stock.
Matching unit awards will be adjusted to reflect stock dividends, stock splits,
reclassifications and similar transactions as provided under the 2002 Plan or
the 2005 Plan, as applicable. Matching units are not transferable. Under the
Program, holders of matching units will not have any voting, dividend or other
stockholder rights with respect to such units until the underlying shares are
issued.
The Company will issue the shares subject to a matching unit award on the date
the award vests, unless the officer has timely elected to defer issuance of the
shares in a manner that satisfies Section 409A of the Internal Revenue Code of
1986 and related regulations. In general, awards will be settled in shares of
common stock, less any shares withheld to satisfy applicable taxes.
The Company may terminate the matching unit component of the Program at any
time, without further notice or obligation to any participant.

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