Autodesk 2008 Annual Report Download - page 29

complete and does not discuss the tax consequences upon a participant’s death, or the provisions of the income
tax laws of any municipality, state or foreign country in which the participant may reside. As a result, tax
consequences for any particular participant may vary based on individual circumstances.
Nonqualified Stock Options. No taxable income is recognized when a nonqualified stock option is granted to
a participant with an exercise price equal to the fair market value on the date of grant. Upon exercise, the
participant will recognize ordinary income in an amount equal to the excess of the fair market value of the Shares
on the exercise date over the exercise price. Any taxable income recognized in connection with the exercise of a
nonqualified stock option by an Autodesk employee is compensation subject to tax withholding by Autodesk.
Any additional gain or loss recognized upon later disposition of the shares is capital gain or loss, which may be
long-term or short-term capital gain or loss depending on the holding period.
Restricted Stock. A participant generally will not have taxable income upon grant of restricted stock.
Instead, the participant will recognize ordinary income at the time of vesting equal to the fair market value (on
the vesting date) of the shares or cash received minus any amount paid. A participant instead may elect to be
taxed at the time of grant.
Tax Effect for Autodesk. Autodesk generally will be entitled to a tax deduction in connection with an award
under the Plan in an amount equal to the ordinary income realized by a participant and at the time the participant
recognizes such income (for example, the exercise of a nonqualified stock option).
Participation in the Plan
Each new non-employee member of the Board of Directors receives an Initial Grant to purchase 50,000
shares of Common Stock on the date of the first meeting of the Board of Directors at which such person first
serves as a director. Each non-employee director receives an Annual Grant to purchase 20,000 shares of
Common Stock on the date of each annual meeting (provided that such director has served on the Board of
Directors for at least six full months prior to that date and remains a member of the Board of Directors on that
date). In addition, the Plan requires that a director shall receive no less than 50 percent of the value of his or her
cash compensation in the form of restricted stock. Autodesk does not have any other current plans, proposals or
arrangements to grant Awards under the Plan. None of our executive officers are eligible to participate in the
Plan. From February 1, 2007 through March 31, 2008, our current directors who are not executive officers were
granted an aggregate total of (i) options to purchase 320,000 shares with an average exercise price of $47.54 per
share and (ii) 14,069 shares of restricted stock with an aggregate dollar value of $635,918 based on $45.20 per
share, the last reported trade price for the shares on July 6, 2007, the date of grant.
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