[AUTODESK LOGO]
May 27, 1997
Dear Autodesk Stockholder:
You are cordially invited to attend Autodesk's 1997 Annual Meeting of
Stockholders to be held on Thursday, June 26, 1997 at 2:00 p.m., local time.
The meeting will be held at the Embassy Suites Hotel, 101 McInnis Parkway, San
Rafael, California.
At the Annual Meeting, you will be asked to elect six directors and to
ratify the appointment of Ernst & Young LLP as the Company's independent
auditors for the 1998 fiscal year.
We hope you will be able to attend this year's Annual Meeting. We will
report to the stockholders on fiscal year 1997, as well as our future
strategies for products and markets. There will be an opportunity for
stockholders to ask questions. Whether or not you plan to attend the meeting,
please sign and return the enclosed proxy card to ensure your representation
at the meeting.
Very truly yours,
/s/ Carol A. Bartz
-----------------------------
Carol A. Bartz
Chief Executive Officer
and Chairman of the Board
AUTODESK, INC.
----------------
NOTICE OF 1997 ANNUAL MEETING OF STOCKHOLDERS
JUNE 26, 1997
TO THE STOCKHOLDERS OF AUTODESK, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Autodesk,
Inc. (the "Company"), a Delaware corporation, will be held on Thursday, June
26, 1997 at 2:00 p.m., local time, at the Embassy Suites Hotel, 101 McInnis
Parkway, San Rafael, California, for the following purposes:
1. To elect directors to serve for the ensuing year and until their
successors are elected.
2. To ratify the appointment of Ernst & Young LLP as independent auditors
of the Company for the fiscal year ending January 31, 1998.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on May 16, 1997 are
entitled to notice of and to vote at the meeting and any adjournment thereof.
All stockholders are cordially invited to attend the meeting in person. Any
stockholder attending the meeting may vote in person even if such stockholder
previously signed and returned a proxy.
FOR THE BOARD OF DIRECTORS
/s/ Marcia K. Sterling
-------------------------------------
Marcia K. Sterling
Vice President, Business Development,
General Counsel and Secretary
San Rafael, California
May 27, 1997
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN ORDER
TO ENSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF MAILED
IN THE UNITED STATES.
AUTODESK, INC.
----------------
PROXY STATEMENT FOR 1997 ANNUAL MEETING OF STOCKHOLDERS
The enclosed Proxy is solicited on behalf of the Board of Directors of
Autodesk, Inc. (the "Company") for use at the Company's Annual Meeting of
Stockholders ("Annual Meeting") to be held Thursday, June 26, 1997 at 2:00
p.m., local time, or at any adjournment or postponement thereof, for the
purposes set forth herein and in the accompanying Notice of Annual Meeting of
Stockholders. The Annual Meeting will be held at the Embassy Suites Hotel, 101
McInnis Parkway, San Rafael, California.
The Company's principal executive offices are located at 111 McInnis
Parkway, San Rafael, California 94903. The telephone number at that address is
(415) 507-5000.
These proxy solicitation materials were mailed on or about May 27, 1997 to
all stockholders entitled to vote at the Annual Meeting.
INFORMATION CONCERNING SOLICITATION AND VOTING
RECORD DATE AND SHARES OUTSTANDING
Stockholders of record at the close of business on May 16, 1997 are entitled
to notice of, and to vote at, the Annual Meeting. At the record date,
47,992,330 shares of the Company's Common Stock were issued and outstanding
and entitled to vote at the meeting.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Secretary of the
Company a written notice of revocation or a duly executed proxy bearing a
later date or by attending the Annual Meeting and voting in person.
VOTING AND SOLICITATION
Every stockholder voting for the election of directors is entitled to one
vote for each share held. Stockholders do not have the right to cumulate their
votes in the election of directors. On all other matters each share is
likewise entitled to one vote on each proposal or item that comes before the
Annual Meeting.
The cost of this solicitation will be borne by the Company. The Company may
reimburse brokerage firms and other persons representing beneficial owners of
shares for their expenses in forwarding solicitation material to such
beneficial owners. Proxies also may be solicited by certain of the Company's
directors, officers and employees, without additional compensation, personally
or by telephone.
QUORUM; ABSTENTIONS; BROKER NON-VOTES
The required quorum for the transaction of business at the Annual Meeting is
a majority of the shares of Common Stock outstanding on the Record Date.
Shares that are voted "FOR," "AGAINST" or "WITHHELD" from a matter are treated
as being present at the meeting for purposes of establishing a quorum and are
also treated as votes eligible to be cast by the Common Stock present in
person or represented by proxy at the Annual Meeting and "entitled to vote on
the subject matter" (the "Votes Cast") with respect to such matter.
While abstentions (votes "withheld") will be counted for purposes of
determining both the presence or absence of a quorum for the transaction of
business and the total number of Votes Cast with respect to a particular
matter, broker non-votes with respect to proposals set forth in this Proxy
Statement will not be considered "Votes Cast" and, accordingly, will not
affect the determination as to whether the requisite majority of Votes Cast
has been obtained with respect to a particular matter.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company which are intended to be presented
by such stockholders at the Company's 1998 Annual Meeting must be received by
the Secretary of the Company no later than January 27, 1998 in order to be
included in the proxy soliciting materials relating to that meeting.
PROPOSAL ONE
ELECTION OF DIRECTORS
NOMINEES
A board of six directors is to be elected at the meeting. Each director
elected to the board will hold office until the next Annual Meeting or until
his or her successor has been elected and qualified. Unless otherwise
instructed, the proxy holders will vote the proxies received by them for the
six nominees named below, all of whom are presently directors of the Company.
In the event that any nominee is unable or declines to serve as a director at
the time of the Annual Meeting, the proxies will be voted for any nominee who
shall be designated by the present Board of Directors to fill the vacancy. The
proxies cannot be voted for a greater number of persons than the number of
nominees named in this proxy statement. It is not expected that any nominee
will be unable or will decline to serve as a director.
The name of and certain information regarding each nominee is set forth
below.
DIRECTOR
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION SINCE
--------------- --- -------------------- --------
Carol A. Bartz.................. 48 Chief Executive Officer and 1992
Chairman of the Board of the
Company
Mark A. Bertelsen............... 53 Member of Wilson Sonsini 1992
Goodrich & Rosati,
Professional Corporation,
attorneys at law
Crawford W. Beveridge........... 51 Chief Executive Officer, 1993
Scottish Enterprise
J. Hallam Dawson................ 60 Chairman, IDI Associates 1988
Mary Alice Taylor............... 47 Executive Vice President, 1995
Worldwide Operations and
Technology, CitiCorp
Morton Topfer................... 60 Vice Chairman, Dell Computer 1995
Corporation
Except as set forth below, each of the nominees has been engaged in his or
her principal occupation described above during the past five years. There is
no family relationship between any director or executive officer of the
Company.
Ms. Bartz joined the Company in April 1992 and serves as Chief Executive
Officer and Chairman of the Board. Ms. Bartz served as President of the
Company from May 1992 through September 1996. From 1983 to April 1992, Ms.
Bartz served in various positions with Sun Microsystems, Inc., including Vice
President of Worldwide Field Operations from July 1990 to April 1992. Ms.
Bartz is a director of AirTouch Communications, Cadence Design Systems,
Network Appliance, Inc., Cisco Systems, Inc. and BEA Systems, Inc.
Mr. Bertelsen joined the law firm of Wilson Sonsini Goodrich & Rosati,
outside legal counsel to the Company, in January 1972 and became a member of
the firm in January 1977.
Mr. Beveridge has served as the Chief Executive Officer of Scottish
Enterprise, an economic development company since January 1991. Mr. Beveridge
is a director of U.S. Smaller Companies Investment Trust.
Mr. Dawson has served since September 1986 as Chairman of IDI Associates, a
private investment bank specializing in Latin America.
2
Ms. Taylor has served as Executive Vice President of Worldwide Operations
and Technology for CitiCorp since January 1997. Ms. Taylor served as Vice
President of Federal Express Corporation from 1985 to September 1991 and as
Senior Vice President of Federal Express Corporation from September 1991 until
December 1996. Ms. Taylor is a director of Perrigo, Inc. and Allstate
Insurance, Inc.
Mr. Topfer has served as Vice Chairman of Dell Computer Corporation since
June 1994. From March 1971 to June 1994, Mr. Topfer was the Executive Vice
President of Motorola, Inc. Mr. Topfer is a director of DSC Communications
Corporation.
BOARD MEETINGS AND COMMITTEES
Ms. Bartz serves as Chairman of the Board of Directors of the Company. The
Board of Directors held a total of 8 meetings during the fiscal year ended
January 31, 1997. All of the current directors attended seventy-five percent
(75%) or more of the meetings of the Board of Directors and committees of the
Board, if any, upon which such directors served during their term of office.
The Audit Committee consists of directors J. Hallam Dawson (Chairman), Mark
Bertelsen and Mary Alice Taylor. The principal functions of the Audit
Committee are to recommend engagement of the Company's independent auditors,
to consult with the Company's auditors concerning the scope of the audit and
to review with them the results of their examination, to review and approve
any material accounting policy changes affecting the Company's operating
results and to review the Company's financial control procedures and
personnel. The Audit Committee held 4 meetings during fiscal year 1997.
The Compensation Committee currently consists of directors Crawford
Beveridge (Chairman) and Morton Topfer. The Compensation Committee reviews
compensation and benefits for the Company's executives and administers the
grant of stock options to executive officers under the Company's stock plans.
In December 1995, the Board delegated to the Company's Chief Executive Officer
authority to grant options to non-officer employees to the extent such options
fall within standard guidelines previously approved by the Compensation
Committee. The authority to grant all other options (except options which are
granted automatically to outside directors under the non-discretionary 1990
Directors' Option Plan) has been delegated to the Compensation Committee. The
Compensation Committee, which consists solely of outside directors ineligible
to participate in the Company's discretionary employee stock programs, has
sole and exclusive authority to grant stock options to officers and to
directors who are also employees or consultants of the Company. The
Compensation Committee held 4 meetings during fiscal year 1997.
The Nominating Committee consists of directors Morton Topfer (Chairman),
Carol Bartz and Crawford Beveridge. The Nominating Committee has the
responsibility to present a slate of nominees to the full Board prior to each
Annual Meeting and to make recommendations regarding outside director
compensation.
COMPENSATION OF DIRECTORS
The Company pays an annual fee of $25,000 to each director who is not an
employee of or consultant to the Company (currently five persons), of which
not more than fifty percent (50%) can be cash and the balance must be
restricted stock issued at the rate of $1.20 worth of stock for each $1.00 of
cash compensation foregone. Directors do not receive fees for Board or Board
Committee meetings attended.
The Company's 1990 Directors' Option Plan provides for the automatic grant
of nonstatutory options to outside directors of the Company. Upon being
elected or appointed to the Company's Board of Directors, each outside
director is granted an option to purchase 15,000 shares of Common Stock of the
Company, with subsequent annual grants of 10,000 shares. Options granted under
the 1990 Directors' Option Plan vest in annual installments cumulatively as to
thirty-four percent (34%), thirty-three percent (33%) and thirty-three percent
(33%), respectively, of the shares subject to an option for a total vesting
period of three years. The exercise price of options granted under the 1990
Directors' Option Plan is equal to the fair market value of the Common Stock
on the date of grant.
3
MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of May 16, 1997 (i) by each person
who is known by the Company to own beneficially more than five percent (5%) of
the Company's Common Stock, (ii) by each of the Company's directors, (iii) by
each of the Company's Chief Executive Officer and the Company's four most
highly compensated executive officers (other than the Chief Executive Officer)
who served as executive officers at January 31, 1997 (collectively, the "Named
Officers") and (iv) by all directors and executive officers who served as
directors or executive officers at January 31, 1997 as a group.
SHARES BENEFICIALLY
OWNED
--------------------
DIRECTORS, OFFICERS AND
FIVE PERCENT (5%) STOCKHOLDERS NUMBER(1) PERCENT(2)
------------------------------ --------- ----------
PRINCIPAL STOCKHOLDERS:(3)
J.P. Morgan & Co., Incorporated............................................................ 5,654,018 11.78%
525 Fifth Avenue
New York, NY 10036
Jurika & Voyles, Inc. ..................................................................... 3,551,960 7.40%
1999 Harrison Street
Suite 700
Oakland, CA 94612
Goldman, Sachs & Co. ...................................................................... 2,530,307 5.27%
80 Broad Street
New York, NY 10004
DIRECTORS:
Carol A. Bartz(4)........................................................................ 1,284,053 2.68%
Mark A. Bertelsen(5)..................................................................... 30,562 *
Crawford W. Beveridge(6)................................................................. 30,562 *
J. Hallam Dawson(7)...................................................................... 47,062 *
Mary Alice Taylor(8)..................................................................... 13,062 *
Morton Topfer(9)......................................................................... 12,567 *
OTHER NAMED OFFICERS:
Eric B. Herr(10)......................................................................... 394,053 *
Dominic J. Gallello(11).................................................................. 147,221 *
Godfrey R. Sullivan(12).................................................................. 214,629 *
Michael E. Sutton(13).................................................................... 117,186 *
All directors and executive officers as a group (19 persons)(14)......................... 2,979,053 6.21%
- --------
* Represents less than 1% of the outstanding shares.
(1) The number and percentage of shares beneficially owned is determined
under rules established by the Securities and Exchange Commission (the
"SEC"), and the information is not necessarily indicative of beneficial
ownership for any other purpose. Under such rules, beneficial ownership
includes any shares as to which the individual has sole or shared voting
power or investment power and also any shares which the individual has
the right to acquire within sixty days of May 16, 1997, through the
exercise of any stock option or other right. Unless otherwise indicated
in the footnotes, each person has sole voting and investment power (or
shares such powers with his or her spouse) with respect to the shares
shown as beneficially owned.
(2) Number of shares used in calculating the percentage of shares
beneficially owned includes 47,992,330 shares outstanding as of May 16,
1997, plus any shares subject to stock options held by the person or
persons in question that are exercisable within 60 days of May 16, 1997.
(3) This information was obtained from filings made with the SEC pursuant to
Sections 13(d) or 13(g) of the Exchange Act.
4
(4) Includes options to purchase 1,280,000 shares of Common Stock exercisable
within 60 days of May 16, 1997.
(5) Includes options to purchase 30,067 shares of Common Stock exercisable
within 60 days of May 16, 1997.
(6) Includes options to purchase 30,067 shares of Common Stock exercisable
within 60 days of May 16, 1997.
(7) Includes options to purchase 45,367 shares of Common Stock exercisable
within 60 days of May 16, 1997.
(8) Includes options to purchase 12,567 shares of Common Stock exercisable
within 60 days of May 16, 1997.
(9) Includes options to purchase 12,567 shares of Common Stock exercisable
within 60 days of May 16, 1997.
(10) Includes options to purchase 390,000 shares of Common Stock exercisable
within 60 days of May 16, 1997.
(11) Includes options to purchase 143,334 shares of Common Stock exercisable
within 60 days of May 16, 1997.
(12) Includes options to purchase 210,334 shares of Common Stock exercisable
within 60 days of May 16, 1997.
(13) Includes options to purchase 116,694 shares of Common Stock exercisable
within 60 days of May 16, 1997.
(14) Includes options to purchase 2,931,769 shares of Common Stock exercisable
within 60 days of May 16, 1997.
EXECUTIVE COMPENSATION
The following table sets forth the annual and long-term compensation of the
Named Officers for services to the Company in all capacities during the three
fiscal years ended January 31, 1997:
SUMMARY COMPENSATION TABLE
ANNUAL
COMPENSATION LONG-TERM COMPENSATION
----------------- --------------------------
AWARDS
SECURITIES
FISCAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) OPTIONS(#) COMPENSATION(2)
- --------------------------- ------ -------- -------- ---------- ---------------
Carol A. Bartz................... 1997 $515,000 $ -- 560,000 $ 39,000
Chairman of the Board and 1996 475,000 229,284 -- 38,500
Chief Executive Officer 1995 445,000 148,986 -- 37,500
Eric B. Herr..................... 1997 $320,000 $ -- 280,000 $ 3,000
President and Chief Operating 1996 310,000 124,926 -- 2,500
Officer 1995 290,000 80,011 -- 1,500
Dominic J. Gallello.............. 1997 $275,000 $ -- 210,000 $ 3,000
Vice President, Mechanical CAD 1996 250,000 125,500 20,000 2,500
and Data Management Market 1995 235,000 64,837 -- 1,500
Groups
Godfrey R. Sullivan.............. 1997 $260,000 $ -- 191,000 $ 3,000
Vice President, Americas 1996 260,000 104,858 20,000 2,500
1995 245,000 67,595 -- 1,500
Michael E. Sutton................ 1997 $250,000 $ -- 70,000 $179,241
Vice President, Europe 1996 222,500 89,806 20,000 99,000
1995 210,000 58,459 -- --
- --------
(1) Represents incentive bonuses for achievement of corporate, individual and
organizational objectives in fiscal years 1996 and 1995.
5
(2) Amounts reported for fiscal year 1997 consist of: (i) matching
contributions by the Company to one of Autodesk's pre-tax savings plans
(Ms. Bartz $2,500, Mr. Herr $2,500, Mr. Gallello $2,500 and Mr. Sullivan
$2,500); (ii) Autodesk contributions to one of the Company's pre-tax plans
(Ms. Bartz $500, Mr. Herr $500, Mr. Gallello $500 and Mr. Sullivan $500);
(iii) $36,000 paid to Ms. Bartz for the purpose of reimbursing her for
certain transportation expenses; (iv) $100,000 paid to Mr. Sutton as a
cost of living adjustment related to his location in Switzerland; (v)
$3,104 paid by the Company for health insurance premiums on behalf of Mr.
Sutton; and (vi) $76,137 paid by the Company into an employee retirement
fund on behalf of Mr. Sutton. Amounts reported for fiscal year 1996
consist of: (i) matching contributions by the Company to one of the
Company's pre-tax savings plans (Ms. Bartz $2,000, Mr. Herr $2,000, Mr.
Gallello $2,000 and Mr. Sullivan $2,000; (ii) Contributions to one of the
Company's pre-tax plans (Ms. Bartz $500, Mr. Herr $500, Mr. Gallello $500
and Mr. Sullivan $500); (iii) $36,000 paid to Ms. Bartz for the purpose of
reimbursing her for certain transportation expenses; and (iv) $99,000 paid
to Mr. Sutton as a cost of living adjustment related to his location in
Switzerland. Amounts reported for fiscal year 1995 consist of:
(i) matching contributions by the Company to one of Autodesk's pre-tax
savings plans (Ms. Bartz $1,000, Ms. Herr $1,000, Mr. Gallello $1,000 and
Mr. Sullivan $1,000); (ii) Contributions to one of the Company's pre-tax
plans (Ms. Bartz $500, Mr. Herr $500, Mr. Gallello $500 and Mr. Sullivan
$500); and (iii) $36,000 paid to Ms. Bartz for the purpose of reimbursing
her for certain transportation expenses.
OPTION GRANTS
The following table sets forth information regarding options to purchase
shares of the Company's Common Stock granted to the Named Officers during the
fiscal year ended January 31, 1997.
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(2)
-------------------- ----------------------------
% OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO
UNDERLYING EMPLOYEES EXERCISE
OPTIONS IN FISCAL PRICE EXPIRATION
NAME GRANTED(#) YEAR(1) PER SHARE DATE 5% 10%
---- ---------- ---------- --------- ---------- ------------- --------------
Carol A. Bartz.......... 60,000 $36.50 3/20/06 $ 1,377,279 $ 3,490,296
500,000 $23.125 9/11/06 $ 7,271,594 $ 18,427,647
------- ------------- --------------
560,000 10.6% $ 8,648,873 $ 21,917,943
Eric B. Herr............ 180,000 $36.50 3/20/06 $ 4,131,838 $ 10,470,888
100,000 $23.125 9/11/06 $ 1,454,319 $ 3,685,529
------- ------------- --------------
280,000 5.3% $ 5,586,157 $ 14,156,417
Dominic J. Gallello..... 30,000 $36.50 3/20/06 $ 688,640 $ 1,745,148
30,000 $23.125 9/11/06 $ 436,296 $ 1,105,659
150,000 $27.625 12/18/06 $ 2,605,982 $ 6,604,070
------- ------------- --------------
210,000 4.0% $ 3,730,918 $ 9,454,877
Godfrey R. Sullivan..... 21,000 $36.50 3/20/06 $ 482,048 $ 1,221,604
20,000 $23.125 9/11/06 $ 290,864 $ 737,106
150,000 $27.625 12/18/06 $ 2,605,982 $ 6,604,070
------- ------------- --------------
191,000 3.6% $ 3,378,894 $ 8,562,780
Michael E. Sutton....... 30,000 $36.50 3/20/06 $ 688,640 $ 1,745,148
40,000 $23.125 9/11/06 $ 581,728 $ 1,474,212
------- ------------- --------------
70,000 1.3% $ 1,270,368 $ 3,219,360
- --------
(1) Total number of options granted to employees during fiscal year 1997 was
5,271,000.
(2) The 5% and 10% assumed annual rates of appreciation are specified in SEC
rules and do not represent the Company's estimate or projection of future
stock price growth.
6
OPTION EXERCISES AND HOLDINGS
The following table sets forth, for each of the Named Officers, certain
information concerning stock options exercised during the Company's 1997
fiscal year, and the number of shares of the Company's Common Stock subject to
both exercisable and unexercisable stock options as of January 31, 1997. Also
reported are values for "in-the-money" options that represent the positive
spread between the respective exercise prices of outstanding stock options and
the fair market value of the Company's Common Stock as of January 31, 1997.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
SHARES YEAR END(#) AT FISCAL YEAR END
ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE(#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------------- -------- ----------- ------------- ----------- -------------
Carol A. Bartz.......... -- -- 960,000 860,000 $15,720,000 $9,162,500
Eric B. Herr............ -- -- 350,000 280,000 $ 4,768,750 $ 850,000
Dominic J. Gallello..... -- -- 126,667 283,333 $ 750,000 $1,230,000
Godfrey R. Sullivan..... -- -- 196,667 264,333 $ 1,425,000 $1,220,000
Michael E. Sutton....... -- -- 68,907 145,573 $ 389,000 $ 729,000
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors (the "Compensation
Committee") is currently comprised of two non-employee directors. The
Compensation Committee is responsible for establishing the policies and
programs which determine the compensation of Autodesk's officers. The
Compensation Committee sets base cash compensation and bonus compensation on
an annual basis for the Chief Executive Officer and other executive officers
of the Company. In addition, the Compensation Committee has exclusive
authority to grant stock options to executive officers. The Compensation
Committee considers both internal data, including corporate goals and
individual performance, as well as external data from outside compensation
consultants and independent executive compensation data from comparable high
technology companies, in determining officers' compensation.
Compensation Philosophy
When creating policies and making decisions concerning executive
compensation, the Compensation Committee:
. ensures that the executive team has clear goals and accountability with
respect to corporate performance;
. establishes pay opportunities that are competitive based on prevailing
practices for the industry, the stage of growth and the labor markets in
which Autodesk operates;
. independently assesses operating results on a regular basis in light of
expected Company performance; and
. aligns pay incentives with the long-term interests of the Company's
stockholders.
Compensation Program
Autodesk's executive compensation program has three major components, all of
which are intended to attract, retain and motivate highly effective
executives:
1. Base salary for executive officers is set annually by reviewing the
competitive pay practices of comparable high technology companies located
in the San Francisco Bay Area, the skills and performance levels of
individual executives and the needs of the Company.
7
2. Cash incentive compensation is designed to motivate executives to
attain short-term and longer-term corporate, business unit and individual
management goals. Annual cash bonuses depend upon attainment of these
specified business goals. The formula for incentive bonuses for fiscal year
1997 was based on revenue growth and operating margin, together with
corporate goals. Members of the executive staff did not receive bonuses for
fiscal year 1997. For fiscal year 1998, the bonus plan formula will be
based on revenue growth and operating margin, as well as the achievement of
specific corporate goals. Our policy is to correlate a significant portion
of an executive's total potential cash compensation with the Company's
overall performance.
3. Equity-based incentive compensation has been provided to employees and
management through the Company's stock incentive plans. Under these plans,
officers, employees and consultants are granted stock options based on
competitive market data, as well as their responsibilities and position in
the Company. These options allow participants to purchase shares of
Autodesk stock at the market price on the date of grant, subject to vesting
during the participant's employment with the Company. Employees are also
permitted to purchase shares of the Company's Common Stock, subject to
certain limitations, at eighty-five percent (85%) of fair market value
under the Employee Stock Purchase Plan. The purpose of these stock plans is
to instill the economic incentives of ownership and to create management
incentives to improve stockholder value. The Company's stock option plans
utilize vesting periods to encourage employees and executives to remain
with the Company and to focus on longer-term results.
Chief Executive Officer Compensation
In determining Ms. Bartz's compensation for the fiscal year ended January
31, 1997, the Compensation Committee reviewed industry surveys of compensation
paid to chief executive officers of comparable companies, with a focus on
those companies located in the San Francisco Bay Area, and evaluated
achievement of corporate individual objectives for the fiscal year. Ms.
Bartz's annual base compensation for fiscal year 1997 was $515,000. Like other
executive officers, Ms. Bartz was eligible to receive an incentive bonus
determined on the basis of (i) the Company's revenue growth and operating
margin and (ii) achievement of specific weighted corporate goals. No bonus was
paid to Ms. Bartz, nor the rest of the executive staff for fiscal year 1997.
Neither Ms. Bartz nor any of the executive staff received salary increases for
fiscal year 1998.
Ms. Bartz was granted an option to buy 60,000 shares of Autodesk stock in
March 1996 as part of the annual performance-based executive stock option
program. In September 1996, Ms. Bartz was granted an additional option to buy
500,000 shares of Autodesk stock. This option was granted as a long term
retention incentive for the Chief Executive Officer in light of Ms. Bartz's
initial option grant having fully vested in April 1997. We believe it is
critical to the Company's long-term success to continue to tie the Chief
Executive Officer's incentive to the Company's performance and to align
individual financial interests more closely with those of stockholders.
Other Executive Compensation
Autodesk provides certain compensation programs to executives that are also
available to other Company employees, including pre-tax savings plans and
medical/dental/vision benefits. There are no pension programs except where
prescribed by law in countries other than the United States. The Company
generally does not provide executive perquisites such as club memberships.
Several members of the executive staff were granted stock options during the
fiscal year in addition to those granted as part of the annual performance-
based executive stock option program. These long-term incentive options were
granted to those executives who joined the Company in 1992 and whose original
option grants will fully vest during 1997. These awards will help ensure that
the Company is able to retain key executives and maintain a stable and
experienced management team. These option grants also ensure that a
significant portion of the executives' compensation is tied to the Company's
performance and stockholders' interests.
8
Deductibility of Executive Compensation
Beginning in 1994, the Internal Revenue Code of 1986, as amended (the
"Code") limited the federal income tax deductibility of compensation paid to
the Company's chief executive and to each of the other four most highly
compensated executive officers. For this purpose, compensation can include, in
addition to cash compensation, the difference between the exercise price of
stock options and the value of the underlying stock on the date of exercise.
The Company may deduct compensation with respect to any of these individuals
only to the extent that during any fiscal year such compensation does not
exceed $1 million or meets certain other conditions (such as stockholder
approval). Considering the Company's current compensation plans and policy,
the Company and the Compensation Committee believe that, for the near future,
there is little risk that the Company will lose any significant tax deduction
relating to executive compensation. If the deductibility of executive
compensation becomes a significant issue, the Company's compensation plans and
policy will be modified to maximize deductibility if the Company and the
Compensation Committee determine that such action is in the best interests of
the Company.
COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS
Crawford W. Beveridge, Chairman
Morton Topfer
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee was or is an officer or employee of
the Company or any of its subsidiaries.
EMPLOYMENT CONTRACTS AND CERTAIN TRANSACTIONS
In April 1992, the Company entered into an agreement with Carol A. Bartz
which provides for a minimum base salary of $400,000, incentive bonus of up to
eighty percent (80%) of base salary, a one-time employment bonus of $250,000
(to compensate for a foregone bonus) and the grant of options to purchase
2,000,000 shares of Common Stock vesting over five years of employment. The
agreement provides for a severance payment equal to two years' base salary and
incentive compensation in the event Ms. Bartz's employment is terminated
without cause within two years after commencement of employment or one year
after a change of control of the Company not approved by the Board of
Directors or two years' base compensation in the event Ms. Bartz's employment
is terminated without cause under any other circumstances. The options issued
under this agreement became fully vested in April 1997.
9
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent
(10%) of a registered class of the Company's equity securities, to file
reports of ownership on Form 3 and changes in ownership on Form 4 or 5 with
the Securities and Exchange Commission (the "SEC") and the National
Association of Securities Dealers. Such officers, directors and ten percent
(10%) stockholders are also required by SEC rules to furnish the Company with
copies of all Section 16(a) forms that they file.
Based solely on its review of copies of such reports received or written
representations from certain reporting persons, the Company believes that it
complied with all Section 16(a) filing requirements applicable to its
officers, directors and ten percent (10%) stockholders during the fiscal year
ended January 31, 1997, except for a late filing by Robert Carr relating to a
purchase of shares in June 1996.
COMPANY STOCK PRICE PERFORMANCE
The following graph shows a five-year comparison of cumulative total return
(equal to dividends plus stock appreciation) for the Company's Common Stock,
the Standard & Poor's 500 Stock Index and the Dow Jones Software Index.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL STOCKHOLDER RETURN**
LOGO
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
AMONG AUTODESK, INC., S&P 500 INDEX
AND DOW JONES SOFTWARE INDEX
PERFORMANCE GRAPH APPEARS HERE
DOW JONES
Measurement Period AUTODESK, S&P SOFTWARE
(Fiscal Year Covered) INC. 500 INDEX INDEX
- --------------------- --------- --------- ----------
Measurement Pt. 1/31/92 $100 $100 $100
FYE 1/31/93 $171 $111 $111
FYE 1/31/94 $188 $125 $122
FYE 1/31/95 $242 $125 $149
FYE 1/31/96 $223 $174 $225
FYE 1/31/97 $235 $220 $369
- --------
* Assumes $100 invested January 31, 1992 in the Company's stock, the Standard
& Poor's 500 Stock Index and the Dow Jones Software Index, with
reinvestment of all dividends. Total stockholder returns for prior periods
are not an indication of future investment returns.
10
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
On the recommendation of the Audit Committee, the Board of Directors has
appointed Ernst & Young LLP, independent auditors, to audit the consolidated
financial statements of the Company for the fiscal year ending January 31,
1998 and recommends that stockholders vote for ratification of such
appointment. In the event of a negative vote on such ratification, the Board
of Directors will reconsider its selection.
Ernst & Young LLP has audited the Company's financial statements annually
since the fiscal year ended January 31, 1983. Its representatives are expected
to be present at the meeting with the opportunity to make a statement if they
desire to do so and are expected to be available to respond to appropriate
questions.
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting. If any
other matters properly come before the meeting, it is the intention of the
persons named in the enclosed proxy to vote the shares they represent as the
Board of Directors may recommend.
It is important that your stock be represented at the meeting, regardless of
the number of shares which you hold. You are, therefore, urged to execute and
return the accompanying proxy in the enclosed envelope, at your earliest
convenience.
THE BOARD OF DIRECTORS
Dated: May 27, 1997
11
