Autodesk 2010 Annual Report Download - page 20

To ensure prompt handling of unexpected matters, the Audit Committee delegates to the Chairman of the
Audit Committee the authority to amend or modify the list of audit and non-audit services and fees; provided,
however, that such additional or amended services may not affect Ernst & Young LLP’s independence under
applicable SEC rules. The Chairman reports any such action taken to the Audit Committee at subsequent Audit
Committee meetings.
PROPOSAL THREE
APPROVAL OF THE EXECUTIVE INCENTIVE PLAN
On April 14, 2005, our Board of Directors adopted the Executive Incentive Plan (the “EIP”), which was
subsequently approved by our stockholders on June 23, 2005. On March 26, 2010, our Board of Directors
amended the EIP to provide for payment of bonuses that are not intended to qualify as “performance-based
compensation.” The EIP is structured to permit the payment of bonuses to qualify as deductible “performance-
based compensation” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended
(the “Code”). Code Section 162(m) limits our ability to deduct for United States Federal income tax purposes
compensation in excess of $1,000,000 paid to each of the Company’s Chief Executive Officer and its three other
highest paid executive officers (other than the Company’s Chief Financial Officer) in any one fiscal year. Grants
of awards under the EIP will be subject to the $1,000,000 deduction limitation unless the EIP complies with the
requirements of Section 162(m) for “performance-based compensation.” One of the requirements of
“performance-based compensation” is that, if the Compensation Committee is given the authority under a plan to
set specific performance targets, the material terms of the plan under which such performance targets are set must
be approved by the stockholders every five years. Therefore, to comply with the Code Section 162(m), we are
asking stockholders once again to approve the EIP.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR”
THE EXECUTIVE INCENTIVE PLAN.
Description of the EIP
The following paragraphs provide a summary of the principal features of the EIP. This summary does not
purport to be complete and is subject to, and qualified in its entirety by, the provisions of the EIP, which is
attached hereto as Appendix A. Capitalized terms that are not defined have the meanings set forth in the EIP.
Eligibility. Participants in the EIP are executive officers and key employees of the Company, chosen solely
at the discretion of the Compensation and Human Resources Committee. No person is automatically entitled to
participate in the EIP in any plan year. As of March 25, 2010, all executive officers were chosen to participate for
fiscal year 2011. Each participant must remain an employee of the Company for all of fiscal year 2011 in order to
be eligible to receive any award. Because our executive officers are eligible to receive awards under the EIP, our
executive officers have an interest in this proposal. Participants in the EIP may also be eligible to receive
discretionary bonuses, or other types of compensation, outside of the EIP.
Purposes. The purposes of the EIP are to motivate the participants to achieve goals relating to the
performance of Autodesk or one of its business units or other objectively determinable goals and to reward them
when those objectives are satisfied, thereby increasing stockholder value and the success of Autodesk by
motivating executive officers to perform to the best of their abilities and to achieve Autodesk’s objectives. If
certain requirements are satisfied, bonuses issued under the EIP may qualify as deductible “performance-based
compensation” within the meaning of Section 162(m) of the Code.
Administration. The EIP will be administered by the Compensation and Human Resources Committee,
consisting of no fewer than two members of the Board of Directors who are not employees of Autodesk and who
otherwise qualify as “outside directors” within the meaning of Code Section 162(m).
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