Autodesk 2008 Annual Report Download - page 26

Background and Purpose
Autodesk has a well-established policy of providing stock options as a part of compensation to
non-employee members of our Board of Directors, as well as requiring directors to take at least a portion of their
compensation in the form of restricted stock (such stock options and restricted stock referred to collectively
herein as “Awards”). The purposes of the Plan are to attract and retain highly skilled individuals as directors of
Autodesk, to provide additional incentive to our non-employee directors to serve as directors and encourage their
continued service on the Board of Directors, and to encourage equity ownership by our directors in order to align
their interests with those of our stockholders.
Changes in laws and corporate governance practices over the last several years have narrowed the pool of
qualified independent directors, making it more difficult and competitive to retain and attract qualified
independent directors who possess the requisite financial and business expertise to make valuable contributions
to the Board of Directors, and have increased the time commitment and responsibilities of our directors. In light
of competition among companies for directors with appropriate experience, we believe that we need to continue
to grant equity awards at our current levels so that we may continue to attract the best available candidates for
service as non-employee directors of Autodesk and to acknowledge their increased time commitment and
encourage their continued service on the Board of Directors.
Description of the 2000 Directors’ Option Plan
The following paragraphs provide a summary of the principal features of the Plan. This summary does not
purport to be complete and is subject to, and qualified in its entirety by, the provisions of the Plan, which is
attached hereto as Appendix A. Capitalized terms used in this discussion and not defined in this discussion shall
have the meanings set forth in the Plan.
Stock Subject to the Plan. The number of Shares reserved under the Plan since its inception through the
Plan’s amendment in 2005 is 2,700,284. However, Proposal Three, if approved, will increase the number of
shares by 600,000 Shares. Adding these new Shares to the 310,894 Shares that remained available under the Plan
as of March 31, 2008, there would be a total of 910,894 Shares available for future stock option and restricted
stock grants to non-employee directors. If an Award expires or becomes unexercisable for any reason, the
unpurchased or forfeited Shares that were subject to the Award may be returned to the Plan, unless such plan has
terminated, and may become available for future grant under the Plan.
Administration. The Plan fixes the timing of Award grants, the amount of the Award grants, the basis for
determining the exercise price of a stock option, and any restrictions on exercise or vesting of the Awards, in
order to remove any material discretionary element from the Plan. Administration of the Plan, to the extent
necessary, will be provided by the Board of Directors or a committee of the Board of Directors. The Plan is
structured such that no discretion is exercised by any person concerning material decisions regarding the Plan.
However, the Board of Directors has retained the authority to determine the fair market value of the Shares, to
construe and interpret the terms of the Plan and Awards granted thereunder, to approve forms of agreement for
use under the Plan, to modify or amend Awards (not inconsistent with the terms of the Plan), including the
discretionary authority to extend the post-termination exercisability period of an Option, and to take certain other
actions associated with the administration of the Plan.
Option Grants. The Plan provides for the automatic grant of nonstatutory stock options (referred to herein as
“Options”) to our non-employee directors.
Upon being elected or appointed to our Board of Directors for the first time, each non-employee director is
currently granted an Option to purchase 50,000 shares of Common Stock (the “Initial Grant”). Each Initial Grant
vests and becomes exercisable in three annual installments of 34 percent, 33 percent and 33 percent, respectively,
commencing on the first anniversary of the date of grant and subject to the director continuing to serve on the
Board of Directors through each vesting date.
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