Autodesk 2007 Annual Report Download - page 210

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• Stock Grant Process
All stock option grants to executive officers are made by the Committee. In March 2005, the Board
of Directors modified the delegation of authority to the Company’s chief executive officer to grant
stock awards and approve monthly performance, promotion, new hire, and patent award grants for
employees other than the Company’s executive officers on a predetermined date. The specified date
was the second Thursday of each month, or the next business day in case of a holiday, or as close to
such date as was reasonably possible.
In September 2006, the Committee discontinued the delegation of authority to the chief executive
officer and began approving all employee grants at its regularly scheduled quarterly meetings. The
Committee approves stock option grants to newly hired executive officers at the quarterly meeting
following the executive’s hire date. It also approves promotion and performance grants. For executive
promotions, the Committee approves promotion grants at the Committee meeting at which the
promotion is approved, or at the next quarterly Committee meeting following the promotion.
Approval of performance grants is scheduled to occur at the quarterly Committee meetings.
The Committee typically reviews and approves performance grants for executives once or twice
a year. The Committee considers several factors, including the unvested option position of each
executive, the value of those options compared to other Autodesk senior executives, competitive
pay practices within the peer group of companies, and the individual performance of the executive.
The Committee uses “new hire” and “ongoing” stock grant guidelines in determining the
appropriate size of these grants. The stock grant guidelines reflect the range of typical competitive
practices of our peer group. The Committee has authority to exceed these guidelines, within the limits
prescribed under the stock plan approved by shareholders. The current plan limits any individual
grant to 1,000,000 stock options. For fiscal 2007, the maximum grant awarded was 750,000 to Carl
Bass to recognize his promotion to chief executive officer.
• Stock Grant Policies
The Autodesk Board of Directors has established the following policies to govern the granting of
stock options:
• Limitation on Number of Options Granted
It is the policy of the Board that the aggregate number of shares underlying equity awards
granted under the 2006 Employee Stock Plan will not exceed 2.5 percent per year of the Company’s
outstanding common stock during any given fiscal year. The 2.5 percent is based on gross awards
and is not net of cancellations. In calculating whether the 2.5 percent limitation has been reached,
no equity awards issued in connection with a merger, acquisition, or similar business combination
or the appointment of new senior executive officers of the Company, such as a chief executive
officer, chief financial officer, or chief operating officer, will be counted toward the total.
For fiscal 2007, excluding the grant to Carl Bass to recognize his promotion to chief executive
officer, the aggregate number of option grants represented 2.1 percent of common shares
outstanding as of January 31, 2007. Net of cancellations, the number was 1.6 percent.
• Shareholder Dilution Mitigation
We maintain a stock repurchase program to mitigate the dilutive effect of our stock plans. We
generate significant cash flow, and current and planned uses of cash include share repurchases.
In fiscal 2007, we repurchased about 4.2 million shares. As of January 31, 2007, about 16.3 million
shares of common stock remain available for repurchase.
• Prohibition Against Stock Option Repricing