Autodesk 2005 Annual Report Download - page 74

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Note 6. Stockholders’ Equity
Preferred Stock
Under Autodesk’s Certificate of Incorporation, 2.0 million shares of preferred stock are authorized. At
January 31, 2005, 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% or more of the Company’s common stock. The rights will expire
no later than December 14, 2005.
Common Stock
In March 2005, the Board of Directors approved an amendment to the Company’s Certificate
of Incorporation to increase the authorized common stock of the Company from 400.0 million shares to
750.0 million shares. This amendment is subject to approval by the stockholders of the Company.
Common Stock Repurchase Programs
Autodesk repurchased and retired 25.9 million shares in fiscal 2005 at an average repurchase price of $21.08
per share, 18.1 million shares in fiscal 2004 at an average repurchase price of $9.85 per share and 8.8 million shares
in fiscal 2003 at an average repurchase price of $7.36 per share. The purpose of the stock repurchase program
is to help offset the dilution to earnings per share caused by the issuance of stock under Autodesk’s employee
stock plans and to effectively utilize excess cash generated from the business.
Between November 1999 and December 2004, the Board of Directors approved plans to repurchase up to
144.0 million shares of our common stock. Of these 144.0 million shares, 111.8 million shares were repurchased
and retired as of January 31, 2005. 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 2005, 2004 and 2003, Autodesk repurchased its common stock through open market purchases.
Dividends
During fiscal 2005, 2004 and 2003 Autodesk paid annual cash dividends of $0.06 per share at a rate of $0.015
each quarter, reducing retained earnings by $13.6 million, $13.4 million, and $13.6 million, respectively. As
announced in December 2004, Autodesk discontinued the payment of cash dividends after the dividend payable
for the fourth quarter of fiscal 2005, to be paid in April 2005.
AUTODESK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
62