Autodesk 2007 Annual Report Download - page 211

151
2007 Annual Report
Our Board of Directors has prohibited repricing of stock options in the 2006 Employee Stock
Plan and the 2000 Directors’ Option Plan. A similar policy was in place for our prior employee
stock plan.
• Nonqualified Stock and Incentive Stock Options
In general, we issue only nonqualified stock options to employees and executives, with the
exception of grants to those executive officers subject to the stock ownership guidelines described
below. The 2006 Employee Stock Plan limits the use of incentive stock options (ISOs) because of
the heavier financial burden they place on the company. However, because ISOs provide special tax
advantages to the recipient if the stock is held for a significant length of time following exercise, we
provide ISOs to certain executive officers to facilitate their meeting the stock ownership guidelines.
ISOs are granted to these few individuals only to the extent allowable by applicable Internal Revenue
Code limits. Any excess options are nonqualified stock options.
• Stock Option Grant Exercise Price
For fiscal 2007, the exercise price for stock option grants equals the fair market value of the
company’s common stock on the date of grant. This is defined as the closing price quoted on the
NASDAQ Global Select Market on the grant date.
• Option Grant Vesting and Expiration
All stock options granted in fiscal 2007 vest according to the nature of the grant and the level of
the recipient:
• Executive Officer and all other vice president grants (new hire, promotion, performance grants)
have four-year vesting, with one-fourth of the total grant vesting on each grant anniversary
date for four years.
• Other non-vice president grants (key new hire, promotion, performance grants) have three-year
vesting, with one-third of the total grant vesting on each grant anniversary date for three
years.
• Standard new hire grants (50 to 100 shares, depending on country) vest in full on the one-year
anniversary of the grant date.
All stock options granted in fiscal 2007 expire six years from the date of grant.
• Stock Ownership Guidelines for Executive Officers and Directors
Stock ownership by executive officers and directors is important to tie management to the risks and
rewards inherent in stock ownership of the Company. The guidelines for stock ownership adopted by
the Board in December 2004 provide that, within a four-year period, executive officers should attain
an investment position in Autodesk stock equal to a multiple of their base salary and that directors
should attain an investment position in Autodesk stock of at least 5,000 shares. Converting a portion
of management’s stock options into shares encourages long-term ownership in the Company and
helps align the interests of executive officers and shareholders.