Autodesk 2003 Annual Report Download - page 61

AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
On October 7, 2002, Digimation Inc. filed a demand for arbitration against Autodesk with the American
Arbitration Association alleging breach of contract and interference with prospective economic advantage and
business relations. We believe that Digimation’s claims are without merit and that the ultimate resolution of this
matter will not have material effect on our consolidated statements of financial condition, results of operations or
cash flows.
Additionally, Autodesk is involved in various legal proceedings arising from the normal course of business
activities. In management’s opinion, resolution of these matters is not expected to have a material adverse impact
on Autodesk’s consolidated results of operations, cash flows or its financial position. However, depending on the
amount and timing, an unfavorable resolution of a matter could materially affect Autodesk’s future results of
operations, cash flows or financial position in a particular period.
Note 8. Stockholders’ Equity
Preferred Stock
Under Autodesk’s Certificate of Incorporation, 2.0 million shares of preferred stock are authorized. At
January 31, 2003, there were no preferred shares issued or outstanding. The Board of Directors has the authority
to issue the preferred stock in one or more series and to fix rights, preferences, privileges and restrictions,
including dividends, and the number of shares constituting any series or the designation of such series, without
any further vote or action by the stockholders.
In December 1995, the Board of Directors approved a Preferred Shares Rights Agreement (the “Rights
Agreement”). The Rights Agreement is intended to protect stockholders’ rights in the event of an unsolicited
takeover attempt. It is not intended to prevent a takeover of the Company on terms that are favorable and fair to
all stockholders and will not interfere with a merger approved by the Board of Directors. Each right entitles
stockholders to buy 1/1000 of a share of preferred stock at an exercise price of $100, subject to further
adjustment. The rights will become exercisable for half-priced common stock if a person or group acquires or
announces a tender offer or exchange offer to acquire 15 percent or more of the Company’s common stock. The
rights will expire no later than December 14, 2005.
Common Stock Repurchase Programs
Autodesk repurchased and retired 4.4 million shares in fiscal 2003 at an average repurchase price of $14.71
per share, 5.3 million shares in fiscal 2002 at an average repurchase price of $18.49 per share and 18.4 million
shares in fiscal 2001 at an average repurchase price of $19.48 per share. The purpose of the stock repurchase
program is, among other things, to help offset the dilution to earnings per share caused by the issuance of stock
under Autodesk’s employee stock plans.
Between November 1999 and March 2001, the Board of Directors approved plans to repurchase a total of
44.0 million common shares. Of these 44.0 million shares, 33.9 million shares were repurchased and retired as of
January 31, 2003. The number of shares acquired and the timing of the purchases are based on several factors,
including general market conditions and the trading price of Autodesk common stock.
In fiscal 2003 and 2002, Autodesk repurchased its common stock through open market purchases. In fiscal
2001 Autodesk repurchased its common stock through a combination of open market purchases and settlement of
equity collar contracts.
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