Autodesk 2007 Annual Report Download - page 35

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Proxy Materials
• 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
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.