Autodesk 2007 Annual Report Download - page 129

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2007 Annual Report
Our stock option program is broad-based and designed to promote long-term retention. Essentially
all of our employees participate. Approximately 84% of the options we granted during fiscal 2007 were
awarded to employees other than our CEO, CFO and the three other most highly compensated officers for
fiscal 2006, which we refer to as our Named Executive Officers. Options granted under our equity plans
during fiscal 2007 vest over periods ranging from one to five years and expire within six to ten years of
the date of grant. Options granted prior to fiscal 2006 expire within ten years of the date of grant. Since
March 2005, the exercise price of stock options granted was equal to the closing price of our common
stock on the NASDAQ Global Select Market on the grant date. See the “Explanatory Note” immediately
preceding Part I, Item 1 and Note 2, “Restatement of Consolidated Financial Statements” in the Notes to
Consolidated Financial Statements of this Form 10-K for further discussion.
All stock option grants to executive officers are made by the Compensation and Human Resources
Committee of the Board of Directors. All members of the Compensation and Human Resources Committee
are independent directors, as defined by the listing standards of the NASDAQ Global Select Market.
Grants to our non-employee directors are non-discretionary and are pre-determined by the terms of the
2000 Directors’ Option Plan.
For further information concerning Autodesk’s policies and procedures regarding the use of stock
options, see (a) “Explanatory Note” immediately preceding Part I, Item 1 and Note 2, “Restatement of
Consolidated Financial Statements” in the Notes to Consolidated Financial Statements of this Form 10-K,
(b) “Equity Compensation Plan Information,” and (c) “Compensation Discussion and Analysis” in Part III,
Item 11, “Executive Compensation.”
On September 18, 2006, our Board of Directors approved an amendment to certain stock option
agreements issued pursuant to any of our stock option plans where the optionee has terminated or
may terminate his or her employment or service with us and whose outstanding options to purchase
our common stock would otherwise expire before, or within 30 days after, we become current in our
reporting obligations under the Securities and Exchange Act of 1934. On November 30, 2006, our Board
of Directors approved an amendment to extend the expiration dates of certain stock option agreements
which were scheduled to expire on December 12, 2006 and which could not be exercised while we were
not current in our reporting obligations with the SEC. Stock-based compensation expense of $10.4 million
was recognized in fiscal 2007 as a result of these modifications.
In addition to our stock option plans, our employees are also eligible to participate in Autodesk’s 1998
Employee Qualified Stock Purchase Plan (“Employee Stock Purchase Plan”, “ESP Plan” or “ESPP”). Eligible
employees may purchase shares of Autodesk’s common stock at their discretion using up to 15% of their
compensation subject to certain limitations, at not less than 85% of fair market value as defined in the
plan agreement. At January 31, 2007, 18.1 million shares were available for future issuance. This amount
will automatically be increased on the first trading day of each fiscal year by an amount equal to the lesser
of 10.0 million shares or 2.0% of the total outstanding shares plus any shares repurchased by Autodesk
during the prior fiscal year. We typically issue shares on March 31 and September 30 of each fiscal year. The
provisions of this plan expire during fiscal 2018.
Due to the Company’s voluntary stock option review during fiscal 2007, we were not current with
our reporting obligations under the Securities and Exchange Act of 1934 during the second half of fiscal
2007. As a result, we were unable to issue shares under the ESPP during the second half of fiscal 2007.
Stock-based compensation expense as a result of the cancellation of the September 30 purchase of $6.1
million that would have been recognized over future periods was recognized during the third quarter
of fiscal 2007. Autodesk issued 0.8 million shares at an average price of $22.46 per share in fiscal 2007,
1.9 million shares at an average price of $17.99 per share in fiscal 2006, and 4.6 million shares at an average
price of $5.73 per share in fiscal 2005. On September 18, 2006, Autodesk’s Board of Directors approved
an amendment to the Company’s ESP Plan in response to the Company’s temporary suspension of all
contributions to and exercises and purchases under the ESPP while the Company was not current in its