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EXHIBIT 10.02
January 21, 2000
Xxxxxxx X. Xxxxxxx
000 Xxx Xxxx Xxxx
Xxxxxx, XX 00000
Employment Agreement
Dear Xxxxx:
On behalf of the Board of Directors of Intuit Inc. ("Intuit"), I am
pleased to offer you the position of President and Chief Executive Officer of
Intuit on the terms set forth below.
1. Position. You will be employed by Intuit as its President and Chief
Executive Officer effective commencing upon the date of your resignation from
your current employer (the "Commencement Date") and continuing thereafter until
termination pursuant to Section 6. You will have overall responsibility for the
management of Intuit and will report directly to its Board of Directors. During
your term, you will also be appointed to the Board of Directors. You will be
expected to devote your full working time and attention to the business of
Intuit, and you will not render services to any other business without the prior
approval of the Board of Directors or, directly or indirectly, engage or
participate in any business that is competitive in any manner with the business
of Intuit. You will also be expected to comply with and be bound by the
Company's operating policies, procedures and practices that are from time to
time in effect during the term of your employment.
2. Base Salary. Your initial base annual salary will be $750,000,
payable in accordance with Intuit's normal payroll practices with such payroll
deductions and withholdings as are required by law. Your base salary will be
reviewed on an annual basis by the Compensation Committee of the Board of
Directors and increased from time to time, in the discretion of the Compensation
Committee, but in any event such compensation shall not be reduced below
$750,000 during your term of employment.
3. Bonus. (a) You will be eligible to receive a target bonus of 150% of
your then current annual base salary in accordance with Intuit's Incentive
Compensation Plan. Achieving results less than target may yield between 80% and
100% of your target bonus. Achieving results greater than target may yield
between 100% and 150% of your target bonus. For Intuit's 2000 fiscal year you
will receive a prorated target bonus.
(b) You will receive a signing bonus of $1,000,000 (the "Sign-On
Bonus") within thirty days following the Commencement Date to compensate you for
any forfeiture of your 1999 General Electric annual bonus. You will be required
to repay to Intuit a portion of the Sign-On Bonus to the extent that you do not
forfeit your General Electric bonus. In the event of your Voluntary Termination
or Termination for Cause (both as defined in Section 6 below) within one year of
the Commencement Date you shall be required to repay to Intuit the full amount
of the Sign-On Bonus.
4. Stock Options and Restricted Stock.
(a) On the Commencement Date, the Compensation Committee of the
Board of Directors shall grant you nonqualified stock options to purchase
800,000 shares of Intuit common stock at an exercise price equal to such common
stock closing price on the Commencement Date. These options will vest and become
exercisable over a five year period, with 160,000 shares vesting and becoming
exercisable on your Commencement Date and the remaining 640,000 shares vesting
and becoming exercisable in 48 equal monthly installments following the first
anniversary of the Commencement Date (each a "Succeeding Vesting Date"). Except
as otherwise indicated in this agreement, the vested portion of such options may
be exercised at any time until the earlier of 90 days after the termination of
your employment or ten years after the grant of such options. You should
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consult a tax advisor concerning your income tax consequences before exercising
any of the options. Notwithstanding any other provision of this Section 4(a) to
the contrary, upon "Involuntary Termination," "Termination without Cause," or
"Termination for Death or Disability," a portion of the unvested options and
shares of restricted stock (as described in Section 4(b) below) shall
immediately vest as provided in Section 8 below. Intuit shall register the
shares issuable under the option and the shares of restricted stock (as
described in Section 4(b) below) on a Form S-8 registration statement and shall
keep such registration statement in effect for the entire period the options and
shares remain outstanding.
(b) You will be granted 150,000 shares of restricted common stock
on your first date of employment for a purchase price equal to the par value of
the Intuit common stock of $0.01 per share. These shares of restricted stock
will vest over a five year period, with 30,000 shares vesting on the first
anniversary of the Commencement Date and the remaining 120,000 shares vesting in
four equal installments on the second, third, fourth and fifth anniversaries of
the Commencement Date. These shares of restricted stock will not be transferable
by you until they are vested. Unvested shares will be subject to repurchase by
Intuit at $0.01 per share upon termination of your employment, except as
otherwise provided in Section 8 below. Unless you elect to be taxed upon receipt
of the restricted stock (by filing a special Section 83(b) election with the IRS
within 30 days), you will be taxed (and subject to income tax withholding) on
the value of the restricted stock as the shares vest. Again, you should consult
a tax advisor concerning the tax consequences.
(c) You will be granted 75,000 shares of restricted common stock
on your first date of employment for a purchase price equal to the par value of
the Intuit common stock of $0.01 per share. These shares of restricted stock
will vest over a ten year period, with 7,500 shares vesting on the first
anniversary of the Commencement Date and the remaining 67,500 shares vesting in
nine equal installments on the succeeding nine anniversaries of the Commencement
Date. These shares of restricted stock will not be transferable by you until
they are vested. Unvested shares will be subject to repurchase by Intuit at
$0.01 per share upon termination of your employment, except as otherwise
provided in Section 8 below. Unless you elect to be taxed upon receipt of the
restricted stock (by filing a special Section 83(b) election with the IRS within
30 days), you will be taxed (and subject to income tax withholding) on the value
of the restricted stock as the shares vest. Again, you should consult a tax
advisor concerning the tax consequences.
5. Other Benefits. You will be entitled to the following additional
benefits:
(a) You will be eligible for the normal vacation, health
insurance, 401(k), employee stock purchase plan and other benefits offered to
all Intuit senior executives of similar rank and status.
(b) You will be eligible for reimbursement for expenses incurred
in connection with your relocation to California, including any brokerage
commissions and closing costs associated with the sale of your principal
Connecticut residence and the purchase of your principal California residence.
(c) Intuit will provide you with a recourse loan in an amount not
to exceed $6,000,000 at the minimum interest rate required to avoid imputed
income under the provisions of the Internal Revenue Code of 1986, as amended
(the "Code"'), repayable to Intuit two years from the date of your termination
of employment for reasons other than a Voluntary Termination or a Termination
for Cause or within 90 days following your Termination for Cause or your
Voluntary Termination or at the end of the 10 year term.
(d) If within one year following your termination of employment
pursuant to Sections 6 (a) and 6 (d) you sell your principal California
residence (purchased pursuant to Section 5 (b) above) Intuit will split with you
any loss on the sale of such residence on a fifty/fifty basis.
6. Employment and Termination. Your employment with Intuit will be
at-will and may be terminated by you or by Intuit at any time for any reason as
follows:
(a) You may terminate your employment upon written notice to the
Board of Directors at any time for "Good Reason," as defined below (an
"Involuntary Termination");
(b) You may terminate your employment upon written notice to the
Board of Directors at any time in your discretion without Good Reason
("Voluntary Termination");
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(c) Intuit may terminate your employment upon written notice to
you at any time following a determination by two-thirds (2/3) vote of the entire
Board of Directors that there is "Cause," as defined below, for such termination
("Termination for Cause");
(d) Intuit may terminate your employment upon written notice to
you at any time in the sole discretion of two-thirds (2/3) of the entire Board
of Directors without a determination that there is Cause for such termination
("Termination without Cause");
(e) Your employment will automatically terminate upon your death
or upon your disability as determined by the Board of Directors ("Termination
for Death or Disability"); provided that "disability" shall mean your complete
inability to perform your job responsibilities for a period of 180 consecutive
days or 180 days in the aggregate in any 12-month period.
7. Definitions. As used in this agreement, the following terms have the
following meanings:
(a) "Good Reason" means (i) a material reduction in your duties
that is inconsistent with your position as President and Chief Executive Officer
of Intuit or a change in your reporting relationship such that you no longer
report directly to the Board of Directors; (ii) your no longer being President
and Chief Executive Officer of Intuit or, in the case of a Change in Control, of
the surviving entity or acquiror that results from any Change in Control; (iii)
any reduction in your base annual salary or target quarterly or annual bonus
(other than in connection with a general decrease in the salary or target
bonuses for all officers of Intuit without your consent or material breach by
Intuit of any of its obligations hereunder after providing Intuit with written
notice and an opportunity to cure within seven days; (iv) a requirement by
Intuit that you relocate your principal office to a facility more than 50 miles
from Intuit's current headquarters; or (v) failure of any successor to assume
this agreement pursuant to Section 13(d) below.
(b) "Cause" means (i) gross negligence or willful misconduct in
the performance of your duties to Intuit (other than as a result of a
disability) that has resulted or is likely to result in substantial and material
damage to Intuit, after a demand for substantial performance is delivered to you
by the Board of Directors which specifically identifies the manner in which the
Board believes you have not substantially performed your duties and you have
been provided with a reasonable opportunity to cure any alleged gross negligence
or willful misconduct; (ii) commission of any act of fraud with respect to
Intuit; or (iii) conviction of a felony or a crime involving moral turpitude
causing material harm to the business and affairs of Intuit. No act or failure
to act by you shall be considered "willful" if done or omitted by you in good
faith with reasonable belief that your action or omission was in the best
interests of Intuit.
(c) "Change in Control" means (i) any person or entity becoming
the beneficial owner, directly or indirectly, of securities of Intuit
representing fifty (50%) percent of the total voting power of all its then
outstanding voting securities, (ii) a merger or consolidation of Intuit in which
its voting securities immediately prior to the merger or consolidation do not
represent, or are not converted into securities that represent, a majority of
the voting power of all voting securities of the surviving entity immediately
after the merger or consolidation, (iii) a sale of substantially all of the
assets of Intuit or a liquidation or dissolution of Intuit, or (iv) individuals
who, as of the Commencement Date, constitute the Board of Directors (the
"Incumbent Board") cease for any reason to constitute at least a majority of
such Board; provided that any individual who becomes a director of Intuit
subsequent to the Commencement Date, whose election, or nomination for election
by Intuit stockholders, was approved by the vote of at least a majority of the
directors then in office shall be deemed a member of the Incumbent Board.
8. Separation Benefits. Upon termination of your employment with
Intuit for any reason, you will receive payment for all unpaid salary and
vacation accrued to the date of your termination of employment; and your
benefits will be continued under Intuit's then existing benefit plans and
policies for so long as provided under the terms of such plans and policies and
as required by applicable law. Under certain circumstances, you will also be
entitled to receive severance benefits as set forth below, but you will not be
entitled to any other compensation, award or damages with respect to your
employment or termination.
(a) In the event of your Voluntary Termination or Termination for
Cause, you will not be entitled to any cash severance benefits or additional
vesting of shares of restricted stock or options.
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(b) In the event of your Involuntary Termination or Termination
without Cause, you will be entitled to (i) a single lump sum severance payment
equal to six months of your current annual base salary (less applicable
deductions and withholdings) payable within 30 days after the effective date of
your termination; (ii) accelerated vesting of all of your unvested shares of
restricted stock; and (iii) accelerated vesting and exercisability of that
portion of your outstanding options to purchase Intuit common stock that would
have vested on the next twelve Succeeding Vesting Dates.
Notwithstanding the foregoing, if your Involuntary Termination or
Termination without Cause occurs within two months before or twelve months
following a Change in Control, you will be entitled to (i) a single lump sum
payment equal to twelve months of your current annual base salary (less
applicable deductions and withholding) payable within 30 days following your
termination; (ii) your full target bonus for the year of termination without
regard to satisfaction of any target performance objectives; (iii) accelerated
vesting of all unvested shares of restricted stock; and (iv) accelerated vesting
and exercisability of that portion of your outstanding options to purchase
Intuit common stock (or securities of the surviving entity that are issuable
upon exercise of such options following the Change in Control) would have vested
on the next twenty-four Succeeding Vesting Dates.
(c) In the event of your Termination for Death or Disability, the
vesting of your unvested shares of restricted stock shall be accelerated and the
vesting and exercisability of your outstanding options to purchase Intuit common
stock shall be immediately accelerated by that portion of the options that would
have vested on the next twelve Succeeding Vesting Dates; and you or your estate
will have until one year after the effective date of your death or disability to
exercise any options that were vested as of the effective date of your
termination, including those that were accelerated as of the effective date of
your death or disability.
(d) If your severance and other benefits provided for in this
Section 8 constitute "parachute payments" within the meaning of Section 280G of
the Code and, but for this subsection, would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code, then your severance and
other benefits under this Section 8 will be payable, at your election, either in
full or in such lesser amount as would result, after taking into account the
applicable federal, state and local income taxes and the excise tax imposed by
Section 4999, in your receipt on an after-tax basis of the greatest amount of
severance and other benefits.
(e) No payments due you hereunder shall be subject to mitigation
or offset.
9. Indemnification Agreement. Upon your commencement of employment with
Intuit, Intuit will enter into its standard form of indemnification agreement
for officers and directors, a copy of which is attached to this letter as
Exhibit C, to indemnify you against certain liabilities you may incur as an
officer or director of Intuit.
10. Confidential Information and Invention Assignment Agreement. Upon
your commencement of employment with Intuit, you will be required to sign its
standard form of Employee Agreement, a copy of which is attached to this letter
as Exhibit D, to protect Intuit's confidential information and intellectual
property.
11. Nonsolicitation. During the term of your employment with Intuit and
for one year thereafter, you will not, on behalf of yourself or any third party,
solicit or attempt to induce any employee of Intuit to terminate his or her
employment with Intuit.
12. Arbitration. The parties agree that any dispute regarding the
interpretation or enforcement of this agreement shall be decided by
confidential, final and binding arbitration conducted by Judicial Arbitration
and Mediation Services ("JAMS") under the then existing JAMS rules rather than
by litigation in court, trial by jury, administrative proceeding or in any other
forum.
13. Miscellaneous.
(a) Authority to Enter into Agreement. Intuit represents that its
Chairman of the Board has due authority to execute and deliver this agreement on
behalf of Intuit.
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(b) Absence of Conflicts. You represent that upon the
Commencement Date your performance of your duties under this agreement will not
breach any other agreement as to which you are a party.
(c) Attorneys Fees. If a legal action or other proceeding is
brought for enforcement of this agreement because of an alleged dispute, breach,
default, or misrepresentation in connection with any of the provisions of this
agreement, the successful or prevailing party shall be entitled to recover
reasonable attorneys' fees and costs incurred, both before and after judgment,
in addition to any other relief to which they may be entitled.
(d) Successors. This agreement is binding on and may be enforced
by Intuit and its successors and assigns and is binding on and may be enforced
by you and your heirs and legal representatives. Any successor to Intuit or
substantially all of its business (whether by purchase, merger, consolidation or
otherwise) will in advance assume in writing and be bound by all of Intuit's
obligations under this agreement.
(e) Notices. Notices under this agreement must be in writing and
will be deemed to have been given when personally delivered or two days after
mailed by U.S. registered or certified mail, return receipt requested and
postage prepaid. Mailed notices to you will be addressed to you at the home
address which you have most recently communicated to Intuit in writing. Notices
to Intuit will be addressed to its General Counsel at Intuit's corporate
headquarters.
(f) Waiver. No provision of this agreement will be modified or
waived except in writing signed by you and an officer of Intuit duly authorized
by its Board of Directors. No waiver by either party of any breach of this
agreement by the other party will be considered a waiver of any other breach of
this agreement.
(g) Entire Agreement. This agreement, including the attached
exhibits, represents the entire agreement between us concerning the subject
matter of your employment by Intuit.
(h) Governing Law. This agreement will be governed by the laws of
the State of California without reference to conflict of laws provisions.
Xxxxx, we are very pleased to extend this offer of employment to you and
look forward to your joining Intuit as its President and Chief Executive
Officer. Please indicate your acceptance of the terms of this agreement by
signing in the place indicated below.
Very truly yours, Accepted January 24, 2000:
/s/ XXXXXXX X. XXXXXXXX /s/ XXXXXXX X. XXXXXXX
___________________________________ ___________________________________
Xxxxxxx X. Xxxxxxxx
Chairman of the Board of Directors
Intuit Inc.
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