SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ X ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
AUTODESK, INC.
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(Name of Registrant as Specified In Its charter)
N/A
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which
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[ ] Fee paid previously with preliminary materials.
[ ] Check the box if any part of the fee is offset as provided by Exchange
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[LOGO OF AUTODESK APPEARS HERE]
February 27, 1998
Dear Autodesk Stockholder:
You are cordially invited to attend a Special Meeting of the Stockholders of
Autodesk, Inc. (the "Company") to be held on Tuesday, March 31, 1998 at 3:00
p.m., local time. The meeting will be held at the offices of Wilson Sonsini
Goodrich & Rosati, 650 Page Mill Road, Palo Alto, California.
At the Special Meeting, you will be asked to approve an amendment of the
Company's Certificate of Incorporation to increase the number of authorized
shares of the Company's Common Stock from 100,000,000 to 250,000,000. The
Company is also seeking stockholder approval of the Board's adoption of the
1998 Employee Qualified Stock Purchase Plan to replace its existing Employee
Qualified Stock Purchase Plan. The maximum number of shares which may be
optioned and sold under the new purchase plan is 2,000,000 shares, with an
annual increase equal to 2% of the Company's outstanding shares as of the last
day of each fiscal year (treating any shares acquired by the Company during
the fiscal year as being outstanding on such date). You will also be asked at
the meeting to approve certain amendments to the Company's 1996 Stock Plan
which have been adopted by the Board. The amendments to the 1996 Stock Plan
increase the number of shares available for issuance under the plan by
2,000,000, and provide for an annual increase equal to 3.5% of the Company's
outstanding shares as of the last day of each fiscal year (treating any shares
acquired by the Company during the fiscal year as being outstanding on such
date).
Autodesk has a long-standing policy of encouraging employee equity
ownership. We believe that the adoption of the new 1998 Employee Qualified
Stock Purchase Plan and the proposed amendments to the Company's existing 1996
Stock Plan, all of which enhance the Company's ability to provide equity
compensation to its employees, will help contribute to high levels of
performance by recipients of the equity and also provide an effective means of
recognizing contributions to the Company's success. These equity compensation
programs permit the Company's officers and other employees to benefit from the
success of the Company's business along with the other stockholders. The
Company has ongoing, systematic stock repurchase programs designed to minimize
dilution from future stock issuances.
YOUR VOTE IS IMPORTANT IN ENABLING US TO CONTINUE TO ATTRACT AND RETAIN THE
SERVICES OF HIGHLY SKILLED EMPLOYEES IN TODAY'S VERY COMPETITIVE MARKET.
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL 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.
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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD MARCH 31, 1998
TO THE STOCKHOLDERS OF AUTODESK, INC.:
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders of Autodesk,
Inc. (the "Company"), a Delaware corporation, will be held on Tuesday, March
31, 1998 at 3:00 p.m. local time, at the offices of Wilson Sonsini Goodrich &
Rosati, 650 Page Mill Road, Palo Alto, California, for the following purposes:
1. To consider and vote upon a proposal to amend the Company's
Certificate of Incorporation to increase the number of authorized shares of
Common Stock of the Company, $0.01 par value per share, from 100,000,000 to
250,000,000.
2. To approve certain amendments to the Company's 1996 Stock Plan,
including an increase in the number of shares issuable thereunder by
2,000,000, and the adoption of a provision providing for an annual increase
in the number of shares available for issuance under the plan on the last
day of each fiscal year.
3. To approve the adoption of the Company's 1998 Employee Stock Purchase
Plan and the reservation of 2,000,000 shares for issuance thereunder, with
an annual increase in the number of shares available for issuance under the
plan on the last day of each fiscal year.
4. 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 February 18, 1998
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
February 27, 1998
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.
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PROXY STATEMENT FOR THE SPECIAL 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 Special Meeting of
Stockholders ("Special Meeting") to be held Tuesday, March 31, 1998 at 3:00
p.m. local time, or at any adjournment or postponement thereof, for the
purposes set forth herein and in the accompanying Notice of Special Meeting of
Stockholders. The Special Meeting will be held at the offices of Wilson
Sonsini Goodrich & Rosati, 650 Page Mill Road, Palo Alto, 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 February 27, 1998
to all stockholders entitled to vote at the Special Meeting.
INFORMATION CONCERNING SOLICITATION AND VOTING
RECORD DATE AND SHARES OUTSTANDING
Stockholders of record at the close of business on February 18, 1998 are
entitled to notice of, and to vote at, the Special Meeting. At the record
date, [ ] 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 Special Meeting and voting in person.
VOTING AND SOLICITATION
Every stockholder is entitled to one vote for each share held on each
proposal or item that comes before the Special Meeting.
The cost of this solicitation will be borne by the Company. The Company has
retained Georgeson & Company, Inc. to assist in the solicitation of proxies at
an estimated fee of $9,000, plus reimbursement of reasonable expenses. In
addition, 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 Special 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 Special 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 1999 Annual Meeting of Stockholders must
be received by the Secretary of the Company no later than approximately
January 27, 1999 in order to be included in the proxy soliciting materials
relating to that meeting.
PROPOSAL ONE
AMENDMENT OF THE CERTIFICATE OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors has adopted, subject to stockholder approval, an
amendment to the Company's Certificate of Incorporation to increase the number
of authorized shares of Common Stock of the Company, $0.01 par value per
share, from 100,000,000 to 250,000,000 (the "Amendment").
The additional Common Stock to be authorized by adoption of the Amendment
would have rights identical to the currently outstanding Common Stock of the
Company. Adoption of the proposed Amendment and issuance of the Common Stock
would not affect the rights of the holders of currently outstanding Common
Stock of the Company, except for effects incidental to increasing the number
of shares of the Company's Common Stock outstanding. If the Amendment is
adopted, it will become effective upon filing of a Certificate of Amendment of
the Company's Certificate of Incorporation with the Secretary of State of the
State of Delaware.
Prior to effectiveness of the Amendment, the Company has 100,000,000
authorized shares of Common Stock. The Company is proposing to increase its
reserve of authorized but unissued shares in order to avoid the time and
expense of seeking stockholder approval in the future each time it needs to
make a new issuance of Common Stock, whether in connection with a stock split,
an acquisition, an equity offering, or in any other time-sensitive situation.
Based upon the proposal set forth herein, following the effectiveness of the
Amendment, the Company will increase its reserve to 250,000,000 authorized
shares available pursuant to its Certificate of Incorporation. The Company
believes that maintaining such a reserve could save time and money in
responding to future events requiring the issuance of additional shares of
Common Stock, such as acquisitions or equity offerings. Moreover, such shares
may be used in connection with future stock splits effected by means of the
issuance of a stock dividend, if the Board of Directors concludes that it is
in the interest of the Company's stockholders to implement any such stock
dividends in the future. The additional shares of Common Stock authorized by
the amendment would be available for issuance from time to time by the Board
of Directors without further stockholder action, except in situations where
applicable state or federal law requires stockholder vote.
If approved, the increase in the authorized number of shares of Common Stock
and the subsequent issuance of such shares could have the effect of delaying
or preventing a change in control of the Company without further action by the
stockholders. Shares of authorized but unissued Common Stock could (within the
limits imposed by applicable law) be issued in one or more transactions which
would make a change in control of the Company more difficult, and therefore
less likely. Any such issuance of additional stock could have the effect of
diluting the earnings per share and book value per share of outstanding shares
of Common Stock, and such additional shares could be used to dilute the stock
ownership or voting rights of a person seeking to obtain control of the
Company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
"FOR" APPROVAL OF THE AMENDMENT OF THE COMPANY'S CERTIFICATE OF INCORPORATION.
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VOTE REQUIRED
The affirmative vote of the holders of a majority of the outstanding shares
of the Common Stock entitled to vote will be required to approve this
Amendment to the Company's Certificate of Incorporation. As a result,
abstentions and broker non-votes will have the same effect as negative votes.
PROPOSAL TWO
ADOPTION OF 1998 EMPLOYEE QUALIFIED STOCK PURCHASE PLAN
The 1998 Employee Qualified Stock Purchase Plan (the "Purchase Plan") was
adopted by the Board of Directors in January 1998. As of February 18, 1998, no
shares had been issued pursuant to the Purchase Plan. The Purchase Plan will
replace the Company's existing Employee Qualified Stock Purchase Plan (the
"Existing Plan") with respect to future offerings to employees. As of February
18, 1998, an aggregate of 301,737 shares were available for issuance under the
Existing Plan. Based on present participation levels, the Company expects that
it will issue all such available shares pursuant to current obligations under
the Existing Plan within the next several months, and the Existing Plan will
terminate when all such shares have been issued. The Purchase Plan is
substantially identical to the Existing Plan except that (i) the Purchase Plan
shall initially have 2,000,000 shares of Common Stock reserved for issuance
thereunder, rather than 2,600,000; (ii) the Purchase Plan shall include an
Evergreen Feature (defined below); and (iii) permitted payroll contributions
to the Purchase Plan shall include straight time, overtime, shift premium and
commissions but, unlike the Existing Plan, shall not include bonuses. During
any period of overlap in the existence of the Existing Plan and the Purchase
Plan, each employee will be restricted to participation in the plans only to
the extent permitted under Section 423 of the Internal Revenue Code of 1986,
as amended (the "Code").
For future issuances, the stockholders are being asked to approve the
adoption of the Purchase Plan and the reservation of 2,000,000 shares
thereunder, plus an annual increase (the "Evergreen Feature") to be made on
the last day of each fiscal year equal to 2% of: (i) the total number of
shares of Autodesk Common Stock outstanding on such date, plus (ii) any shares
reacquired by the Company during the fiscal year ending on such date. The
Company believes that the Purchase Plan is a key component of its strategy to
attract and retain skilled employees and quality management. The Board of
Directors believes it is in the Company's best interests to adopt the Purchase
Plan so that the Company may continue to provide eligible employees the
opportunity to purchase the Company's Common Stock through payroll deductions,
thereby aligning their individual financial interests more closely with those
of the stockholders. While it believes that establishment of the Purchase Plan
will encourage employees to be stockholders, the Company also recognizes that
employee share purchases under the Purchase Plan can result in dilution to
existing stockholders. The Company attempts to limit the impact of this
dilution through its systematic and ongoing share repurchase programs. Since
December 1991, the Company has repurchased over 19 million shares of its
Common Stock for approximately $561 million. In fiscal year 1998 alone, the
Company repurchased over 5.3 million shares for approximately $175 million. By
contrast, had the Evergreen Feature been in place at the beginning of the 1998
fiscal year, less than 950,000 shares would have been added to the Purchase
Plan at that time. The Company intends to continue its share repurchase
programs for the foreseeable future, and has current Board authorization to
repurchase up to approximately 10.8 million additional shares.
With the demand for highly skilled employees at an all time high, especially
in the technology industries, management believes it is critical to the
Company's success to maintain competitive employee compensation programs.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
"FOR" ADOPTION OF THE PURCHASE PLAN.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the shares of the
Company's Votes Cast will be required to approve the Board's adoption of the
Purchase Plan.
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SUMMARY OF 1998 EMPLOYEE QUALIFIED STOCK PURCHASE PLAN
Administration. The Purchase Plan is administered by the Board of Directors
or a committee appointed by the Board (the "Administrator"). Every finding,
decision and determination by the Administrator shall, to the full extent
permitted by law, be final and binding upon all parties.
Eligibility. All persons who are employed by the Company on a given
enrollment date and who are customarily employed by the Company for at least
twenty hours per week and more than five months per calendar year are eligible
to participate in the Purchase Plan. Participation in the Purchase Plan ends
automatically on termination of employment with the Company. An eligible
employee may become a participant by completing a subscription agreement
authorizing payroll deductions and filing it with the Company's payroll office
prior to the applicable enrollment date.
Offering and Exercise Periods. The Purchase Plan is implemented by
overlapping offering periods of 24 months each ("Offering Periods"). Offering
Periods commence every six months, beginning on the first business day
following the Special Meeting, and consist of four exercise periods of six
months each ("Exercise Periods"). The Board may change the duration of the
Exercise Periods or the length or date of commencement of an Offering Period.
Grant of Option; Purchase Price. On the first day of each Offering Period
(the "Offering Date"), each eligible employee participating in the Purchase
Plan is granted an option to purchase on the last day of each Exercise Period
in such Offering Period (the "Exercise Date") a number of shares of Common
Stock of the Company determined by dividing such employee's accumulated
payroll deductions by the lower of: (i) 85% of the fair market value of one
share of the Company's Common Stock on the Offering Date or (ii) 85% of the
fair market value of one share of the Company's Common Stock on the applicable
Exercise Date. Unless a participating employee withdraws from the Purchase
Plan, his or her option is automatically exercised on each Exercise Date of
the Offering Period; provided that in no event will an employee be permitted
to purchase during an Offering Period a number of shares in excess of the
number determined by dividing $50,000 by the fair market value of a share of
the Company's Common Stock on the Offering Date. The fair market value of the
Common Stock on a given date is the closing sale price of the Common Stock for
such date as quoted on the Nasdaq National Market.
In addition, no employee will be permitted to subscribe for shares under the
Purchase Plan if, immediately after such subscription, the employee would own
5% or more of the voting power or value of all classes of stock of the Company
or of any of its subsidiaries (including stock which may be purchased under
the Purchase Plan or pursuant to any other options), nor will any employee be
permitted to participate to the extent such employee could buy under all
employee stock purchase plans of the Company more than $25,000 worth of stock
(determined at the fair market value of the shares at the time the option is
granted) in any calendar year.
Limitation on Annual Increase in Shares. Notwithstanding the Evergreen
Feature of the Purchase Plan, in no event may the number of shares added to
the Purchase Plan in any fiscal year exceed 2,500,000 or such lesser number of
shares that the Board of Directors may determine.
Payroll Deductions. The purchase price for the shares is accumulated by
payroll deductions during the Offering Period. The deductions may not exceed
15% of a participant's eligible compensation, which is defined in the plan to
include all base straight time gross earnings, payments for overtime, shift
premium and commissions (exclusive of incentive compensation, incentive
payments, bonuses and other compensation) for a given Offering Period. A
participant may discontinue his or her participation in the Purchase Plan at
any time during the Offering Period. Payroll deductions commence on the first
payday following the Offering Date, and continue at the same rate with
automatic enrollment in subsequent Offering Periods, unless sooner terminated
by the participant.
Withdrawal; Termination of Employment. Employees may end their participation
in an offering at any time during the Offering Period, and participation ends
automatically on termination of employment with the
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Company or failure of the participant to remain in the continuous scheduled
employment of the Company for at least 20 hours per week. Once a participant
withdraws from a particular offering, that participant may not participate
again in the same offering. A participant may withdraw all, but not less than
all, of the payroll deductions credited to such participant's account by
giving written notice to the Company.
Transferability. No rights or accumulated payroll deductions of a
participant under the Purchase Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or pursuant to the Purchase Plan), and any such attempt may be
treated by the Company as an election to withdraw from the Purchase Plan.
Adjustments Upon Changes in Capitalization, Dissolution, Merger, Asset Sale
or Change of Control. The shares reserved under the Purchase Plan, as well as
the price per share of Common Stock covered by each option under the Purchase
Plan which has not yet been exercised, will be proportionately adjusted for
any stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of shares of Common Stock effected without receipt of consideration by
the Company. In the event of the proposed dissolution or liquidation of the
Company, the pending Offering Period will terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the Board.
In the event of a proposed sale of all or substantially all the assets of the
Company or a merger of the Company with or into another corporation, the
Purchase Plan provides that each option under the Purchase Plan will be
assumed or an equivalent option will be substituted by the successor or
purchaser corporation, unless the Board determines, in its sole discretion, to
terminate the pending Offering Period prior to the consummation of such event,
in which case the option will be exercisable for a period of thirty days
thereafter.
Amendment and Termination. The Board of Directors of the Company may at any
time and for any reason terminate or amend the Purchase Plan. Except as
provided in the Purchase Plan, no termination can affect options previously
granted, nor may any amendment make any change in any option already granted
which adversely affects the rights of any participant. Shareholder approval
may be required for certain amendments in order to comply with the federal
securities or tax laws, or any other applicable law or regulation.
Unless terminated sooner, the Purchase Plan will terminate 20 years from its
effective date.
FEDERAL TAX INFORMATION
The Purchase Plan, and the right of participants to make purchases
thereunder, is intended to qualify under the provisions of Section 423 of the
Code. Under these provisions, no income will be taxable to a participant until
the shares purchased under the Purchase Plan are sold or otherwise disposed
of. Upon sale or other disposition of the shares, the participant will
generally be subject to tax and the amount of the tax will depend upon the
holding period. If the shares are sold or otherwise disposed of more than two
years from the first day of the Offering Period and one year from the date the
shares are purchased, the participant will recognize ordinary income measured
as the lesser of (a) the excess of the fair market value of the shares at the
time of such sale or disposition over the purchase price, and (b) an amount
equal to fifteen (15%) of the fair market value of the shares as of the first
day of the Offering Period. Any additional gain will be treated as long-term
capital gain. If the shares are sold or otherwise disposed of before the
expiration of these holding periods, the participant will recognize ordinary
income generally measured as the excess of the fair market value of the shares
on the date the shares are purchased over the purchase price. Any additional
gain or loss on such sale or disposition will be long-term or short-term
capital gain or loss, depending on the holding period. The Company is not
entitled to a deduction for amounts taxed as ordinary income or capital gain
to a participant except to the extent of ordinary income recognized by
participants upon a sale or disposition of shares prior to the expiration of
the holding periods described above.
THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF FEDERAL INCOME TAXATION
UPON THE PARTICIPANT AND THE COMPANY WITH RESPECT TO THE SHARES PURCHASED
UNDER THE PURCHASE PLAN. REFERENCE SHOULD BE MADE TO THE APPLICABLE PROVISIONS
OF THE CODE. IN ADDITION, THE SUMMARY DOES NOT DISCUSS THE TAX CONSEQUENCES OF
A PARTICIPANT'S DEATH OR THE INCOME TAX LAWS OF ANY STATE OR FOREIGN COUNTRY
IN WHICH THE PARTICIPANT MAY RESIDE.
5
PARTICIPATION IN THE PURCHASE PLAN
Eligible employees participate in the Purchase Plan voluntarily and each
such employee determines his or her level of payroll deductions within the
guidelines fixed by the Purchase Plan. Accordingly, future purchases under the
Purchase Plan are not determinable at this time.
PROPOSAL THREE
AMENDMENT OF 1996 STOCK PLAN
The Company's 1996 Stock Plan (the "1996 Plan") was adopted by the Board of
Directors in March 1996 and was approved by the stockholders in May 1996. As
of January 31, 1998, a total of 4,055,056 shares of Common Stock had been
issued under the 1996 Plan at a weighted average exercise price of $30.42 per
share. In addition, options to purchase 3,835,422 shares held by approximately
1,802 optionees were outstanding as of such date at a weighted average
exercise price of $30.61 per share, and 537,951 shares remained available for
future grants under the 1996 Plan.
The stockholders are requested to approve amendments to the 1996 Plan that
increase the number of shares issuable thereunder by 2,000,000 and provide for
an annual increase (the "Option Evergreen Feature") to be made on the last day
of each fiscal year equal to 3.5% of: (i) the total number of shares of
Autodesk Common Stock outstanding on such date, plus (ii) any shares
reacquired by the Company during the fiscal year ending on such date. The
Company believes that the 1996 Plan is a key component of its strategy to
attract and retain skilled employees and quality management. The Board of
Directors believes it is in the Company's best interests to adopt the
amendments to the 1996 Plan so that the Company may continue to attract and
retain the services of key employees by granting options to purchase the
Company's Common Stock and other incentives to its employees in the form of
equity ownership. While it believes that the 1996 Plan will encourage
employees to be stockholders, the Company also recognizes that option grants
to employees can result in dilution to existing stockholders. The Company
attempts to limit the impact of this dilution through its systematic and
ongoing share repurchase programs. Since December 1991, the Company has
repurchased over 19 million shares of its Common Stock for approximately $561
million. In fiscal year 1998 alone, the Company repurchased over 5.3 million
shares for approximately $175 million. By contrast, had the Option Evergreen
Feature been in place at the beginning of the 1998 fiscal year, less than 1.7
million shares would have been added to the 1996 Plan at that time. The
Company intends to continue its share repurchase programs for the foreseeable
future, and has current Board authorization to repurchase up to approximately
10.8 million additional shares.
With the demand for highly skilled employees at an all time high, especially
in the technology industries, management believes it is critical to the
Company's success to maintain competitive employee compensation programs.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
"FOR" THE AMENDMENTS TO THE 1996 PLAN.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the Votes Cast will be
required to adopt the amendments to the 1996 Plan.
SUMMARY OF THE 1996 PLAN
A description of the principal features of the 1996 Plan is set forth below.
General. The 1996 Plan gives the Board, or a committee that the Board
appoints, authority to grant options or rights to purchase Common Stock and to
grant long-term performance awards in the form of cash or stock
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bonus awards. Options granted under the 1996 Plan may be either "incentive
stock options" as defined in Section 422 of the Code, or nonstatutory stock
options, as determined by the Board or its committee.
Purpose. The purposes of the 1996 Plan are to attract and retain the best
available personnel for the Company, provide additional incentive to the
employees of the Company and promote the success of the Company's business.
Administration of the 1996 Plan. The 1996 Plan may be administered by the
Board or a committee of the Board. The plan is currently being administered by
the Board except that option grants to officers and employee directors are
administered by the Compensation Committee of the Board, the members of which
are outside directors who are ineligible to participate in any discretionary
stock plan of the Company, and standard option grants to non-officer employees
within guidelines previously approved by the Compensation Committee are
administered by the Company's Chief Executive Officer. The interpretation and
construction of any provision of the 1996 Plan by the Board or its committee
shall be final and binding. Members of the Board receive no additional
compensation for their services in connection with the administration of the
1996 Plan.
Eligibility. The 1996 Plan provides that stock options, stock purchase
rights or long-term performance awards may be granted to employees (including
officers and directors who are also employees) of and consultants to the
Company and its majority-owned subsidiaries. Incentive stock options may be
granted only to employees. The Board or a committee of the Board selects the
participants and determines the number of shares to be subject to each stock
option, stock purchase right and/or performance award. Each option shall be
designated as either an incentive stock option or a nonstatutory stock option,
except that to the extent that the aggregate fair market value of the shares
with respect to which options designated as incentive stock options are
exercisable for the first time by an optionee during any calendar year (under
all plans of the Company) exceeds $100,000, such excess options must be
treated as nonstatutory stock options.
Limitation on Annual Increase in Shares. Notwithstanding the Option
Evergreen Feature of the 1996 Plan, in no event may the number of shares added
to the 1996 Plan in any fiscal year exceed 5,000,000 or such lesser number of
shares that the Board of Directors may determine.
Terms of Awards. The terms of options, purchase rights and long-term
performance awards granted under the 1996 Plan are determined by the Board or
its committee. Each option is evidenced by a written agreement between the
Company and the person to whom such option or right is granted. Options are
typically exercisable over a three-year period beginning on the date of grant
at the rate of 1/3 at the end of the first year, an additional 1/3 at the end
of the second year and the final 1/3 at the end of the third year and
generally terminate 10 years after the date of grant. Restricted stock grants
may not vest in whole or in part prior to three years after the date of grant.
Pursuant to the 1996 Plan, options, purchase rights and long-term performance
awards may be subject to the following additional terms and conditions:
(a) Exercise of the Option. The optionee must earn the right to exercise
the option by continuing to work for the Company over a specified period.
An option is exercised by giving written notice of exercise to the Company
specifying the number of full shares of Common Stock to be purchased and
tendering payment of the purchase price to the Company. The method of
payment of the exercise price of the shares purchased upon exercise of an
option shall be determined by the Board or its committee at the time of
grant.
(b) Exercise Price. The exercise price of options granted under the 1996
Plan is determined by the Board or its committee and, in the case of either
incentive stock options or nonstatutory stock options, must not be less
than one hundred percent (100%) of the fair market value of the Common
Stock on the date the option is granted; provided, however, that the
exercise price of an incentive stock option granted to a 10% stockholder
may not be less than 110% of the fair market value of the Common Stock on
the date such option is granted. Fair market value per share is the closing
price on the Nasdaq National Market on the date of grant.
(c) Termination of Employment. If an optionee's employment or consulting
relationship with the Company is terminated for any reason other than death
or permanent disability, options outstanding under
7
the 1996 Plan will expire unless exercised within 90 days (or such other
period of time as determined by the Board, not to exceed certain limits)
after the date of such termination to the extent the options were
exercisable on the date of termination.
(d) Disability. If an optionee's employment by the Company terminates
because of total and permanent disability, options outstanding under the
1996 Plan will expire unless exercised within 12 months after termination
to the extent such options were exercisable at the date of termination.
(e) Death of Optionee. If an optionee should die while employed by the
Company, options shall become fully exercisable and may be exercised at any
time within 12 months after death.
(f) Term of Options. The 1996 Plan provides that options granted under
the plan will expire up to 10 years from the date of grant, unless a
shorter period is provided in the stock option agreement; provided, that in
the case of an incentive stock option granted to a 10% stockholder, the
term of the option may be no more than 5 years from the date of grant. No
option may be exercised by any person after expiration.
(g) Stock Purchase Rights and Repurchase Option. The 1996 Plan provides
that stock purchase rights may be issued either alone, in addition to, or
in tandem with other awards granted under the Plan and/or cash awards made
outside of the Plan. The number of shares subject to grants of stock
purchase rights shall not exceed fifteen percent (15%) of the total number
of shares authorized under the 1996 Plan. Each written agreement between
the Company and an optionee evidencing a stock purchase right shall grant
the Company a repurchase option exercisable on unvested shares upon the
voluntary or involuntary termination of such optionee's employment with the
Company for any reason other than death. Restricted stock grants may not
vest any sooner than three years after date of grant. To date, no stock
purchase rights have been granted under the 1996 Plan.
(h) Long-Term Performance Awards. The 1996 Plan provides that long-term
performance awards in the form of cash or stock bonus awards may be granted
either along with, in addition to, or in tandem with other awards granted
under the Plan and/or awards made outside of the Plan. The terms and
conditions of long-term performance awards granted under the 1996 Plan are
determined by the Board or its committee. To date, no long-term performance
awards have been granted under the 1996 Plan.
(i) Non-Transferability of Options and Stock Purchase Rights and
Awards. An option, stock purchase right or award, as the case may be, is
non-transferable by the holder other than by will or the laws of descent
and distribution, and is exercisable during the holder's lifetime only by
the holder, or in the event of the holder's death, by the holder's estate
or by a person who acquires the right to exercise the option or stock
purchase right by bequest or inheritance.
(j) Limit on Size of Grants. Section 162(m) of the Code places limits on
the deductibility for federal income tax purposes of compensation paid to
certain executive officers of the Company. In order to preserve the
Company's ability to deduct the compensation income associated with options
and stock purchase rights granted to such persons, the Plan provides that
no employee may be granted options or stock purchase rights to purchase
more than 1,000,000 shares of Common Stock during any fiscal year in
addition to a 1,000,000 share limit upon commencement of employment.
(k) Other Provisions. The option may contain other terms, provisions and
conditions not inconsistent with the 1996 Plan as may be determined by the
Board or its committee.
Adjustment Upon Changes in Capitalization or Merger. In the event any change
is made in the Company's capitalization, such as a stock split or reverse
stock split, appropriate adjustment shall be made to the purchase price and to
the number of shares subject to the stock option, stock purchase right and/or
long-term performance award. In the event of the proposed dissolution or
liquidation of the Company, all options and rights shall become fully
exercisable and will terminate immediately prior to the consummation of such
actions, unless otherwise provided by the Board. In the event of a proposed
sale of all or substantially all of the assets of the Company, or the merger
of the Company with or into another corporation, the successor corporation
shall assume all outstanding options and stock purchase rights or substitute
new options and rights therefor. If the successor corporation refuses to do
so, such options or purchase rights shall become fully exercisable.
8
Amendment and Termination of the 1996 Plan. The Board may amend or terminate
the 1996 Plan in such respects as the Board may deem advisable; provided that,
to the extent necessary to comply with Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or with
Section 422 of the Code or any other successor or applicable law or
regulation, the Company shall obtain stockholder approval of any 1996 Plan
amendment in such a manner and to such a degree as is required by the
applicable law, rule or regulation. Any amendment or termination of the 1996
Plan shall not affect options or rights already granted and such options and
rights shall remain in full force and effect as if the 1996 Plan had not been
amended or terminated, unless mutually agreed otherwise between the holder and
the Board, which agreement must be in writing and signed by the holder and the
Company. In any event, the 1996 Plan shall terminate in 2006. Any options
outstanding under the 1996 Plan at the time of its termination shall remain
outstanding until they expire by their terms.
FEDERAL TAX INFORMATION
Options granted under the 1996 Plan may be either "incentive stock options,"
as defined in Section 422 of the Code, or nonstatutory options.
Incentive Stock Options. If an option granted under the 1996 Plan is an
incentive stock option, the optionee will recognize no income upon grant of
the incentive stock option and incur no tax liability due to the exercise
unless the optionee is subject to the alternative minimum tax. Upon the sale
or exchange of the shares more than two years after grant of the option and
one year after exercising the option, any gain or loss will be treated as
long-term capital gain or loss. If these holding periods are not satisfied,
the optionee will recognize ordinary income equal to the difference between
the exercise price and the lower of (i) the fair market value of the stock at
the date of the option exercise or (ii) the sale price of the stock. A
different rule for measuring ordinary income upon such a premature disposition
may apply if the optionee is also an officer, director or ten percent (10%)
stockholder of the Company. The Company will be entitled to a deduction in the
same amount as the ordinary income recognized by the optionee. Any gain or
loss recognized on such a premature disposition of the shares in excess of the
amount treated as ordinary income will be characterized as long-term or short-
term capital gain or loss, depending on the holding period.
Nonstatutory Stock Options. All other options that do not qualify as
incentive stock options are referred to as nonstatutory options. An optionee
will not recognize any taxable income at the time a nonstatutory option is
granted. However, upon exercise of a nonstatutory option, the optionee will
recognize taxable income generally measured as the excess of the then fair
market value of the shares purchased over the exercise price. Any taxable
income recognized in connection with an option exercise by an optionee who is
also an employee of the Company will be subject to income tax withholding by
the Company. The Company is entitled to a deduction in the same amount as the
ordinary income recognized by the optionee. Upon a disposition of such shares
by the optionee, any difference between the sale price and the exercise price,
to the extent not recognized as taxable income as described above, will be
treated as long-term or short-term capital gain or loss, depending on the
holding period.
Stock Purchase Rights. Stock purchase rights will generally be taxed in the
same manner as nonstatutory stock options. However, restricted stock is
generally purchased upon the exercise of a stock purchase right. At the time
of purchase, restricted stock is subject to a "substantial risk of forfeiture"
within the meaning of Section 83 of the Code. As a result, the purchaser will
not recognize ordinary income at the time of purchase. Instead, the purchaser
will recognize ordinary income on the dates when stock ceases to be subject to
a substantial risk of forfeiture. The stock will generally cease to be subject
to a substantial risk of forfeiture when it is no longer subject to the
Company's right to repurchase the stock upon the purchaser's termination of
employment with the Company. At such times, the purchaser will recognize
ordinary income measured as the difference between the purchase price and the
fair market value of the stock on the date the stock is no longer subject to a
substantial risk of forfeiture. The purchaser may accelerate to the date of
purchase his or her recognition of ordinary income, if any, and the beginning
of any capital gain holding period by timely filing an election pursuant to
Section 83(b) of the Code. In such event, the ordinary income recognized, if
any, is measured as the difference between the
9
purchase price and the fair market value of the stock on the date of purchase,
and the capital gain holding period commences on such date. The ordinary
income recognized by a purchaser who is an employee will be subject to tax
withholding by the Company. Different rules may apply if the purchaser is also
an officer, director, or 10% shareholder of the Company.
Long-Term Performance Awards. Generally, no income will be recognized by a
recipient in connection with the grant of a long-term performance award,
unless an election under Section 83(b) of the Code is filed with the Internal
Revenue Service within 30 days of the date of grant. Otherwise, at the time
the long-term performance award vests, the recipient will generally recognize
compensation income in an amount equal to the fair market value of the award
at the time of vesting. Generally, the recipient will be subject to the tax
consequences discussed under "Nonstatutory Stock Options." In the case of a
recipient who is also an employee, any amount included in income will be
subject to withholding by the Company. The Company will be entitled to a tax
deduction in the amount and at the time the recipient recognizes ordinary
income with respect to a long-term performance award.
The foregoing summary of the effect of federal income taxation upon
optionees, holders of stock purchase rights and the Company with respect to
the grant and exercise of options and stock purchase rights under the 1996
Plan does not purport to be complete, and reference should be made to the
applicable provisions of the Code. In addition, this summary does not discuss
the tax consequences of the optionee's death or the income tax laws of any
municipality, state or foreign country in which an optionee may reside.
PARTICIPATION IN THE 1996 PLAN
Option grants under the 1996 Plan are made by the Board of Directors or, in
specified instances, by the Compensation Committee or the Chief Executive
Officer. Such option grants are not formulaic but rather are based on a
combination of factors, including seniority, anticipated future performance of
the individual optionee, achievement of individual, group and corporate goals,
and overall financial performance of the Company. Accordingly, future
participation levels under the 1996 Plan are not determinable at this time.
The following table sets forth certain information regarding options granted
under the 1996 Plan during the Company's last fiscal year by (i) each of the
officers named in the Summary Compensation Table on page 14, (ii) all
executive officers as a group, and (iii) all other employees (excluding
executive officers) as a group:
PLAN BENEFITS
NUMBER OF
DOLLAR OPTIONS
NAME AND PRINCIPAL POSITION(S) VALUE GRANTED
- ------------------------------ ------ ---------
Carol A. Bartz................................................ -- --
Chairman of the Board and Chief Executive Officer
Eric B. Herr.................................................. -- --
President and Chief Operating Officer
Dominic J. Gallello........................................... -- --
Vice President, MCAD Market Group
Godfrey R. Sullivan........................................... -- --
Vice President, Personal Solutions Group
Michael E. Sutton............................................. -- --
Vice President, Europe
All executive officers as a group (14 persons)................ (1) 349,500
All current directors (excluding executive officers).......... -- --
All other employees (excluding executive officers) as a group. (1) 1,972,681
- --------
(1) The dollar value of these awards cannot be determined because the value
depends on the exercise price of the individual option and the market
value of the Company's Common Stock on the date of exercise.
10
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 February 18, 1998 (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, 1998 (collectively,
the "Named Officers") and (iv) by all directors and executive officers who
served as directors or executive officers at January 31, 1998 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................ [ ] [ ]
525 Fifth Avenue
New York, NY 10036
American Century Companies, Inc................ 2,749,200 [ ]
Twentieth Century Tower
4500 Main Street
Kansas City, MO 64111
DIRECTORS:
Carol A. Bartz(4)..............................
Mark A. Bertelsen(5)........................... *
Crawford W. Beveridge(6)....................... *
J. Hallam Dawson(7)............................ *
Paul S. Otellini(8)............................
Mary Alice Taylor(9)........................... *
Morton Topfer(10).............................. *
OTHER NAMED OFFICERS:
Eric B. Herr(11)............................... *
Dominic J. Gallello(12)........................ *
Godfrey R. Sullivan(13)........................ *
Michael E. Sutton(14).......................... *
ALL DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP
(20 PERSONS)(15):
- --------
* Represents less than 1% of the outstanding shares.
(1) The number and percentage of shares beneficially owned is determined
under the rules of 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 February 18, 1998, 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 deemed outstanding includes outstanding as of
February 18, 1998, plus any shares subject to stock options held by the
person or persons in question that are exercisable within 60 days of
February 18, 1998.
(3) This information was obtained from filings made with the SEC pursuant to
Sections 13(d) or 13(g) of the Exchange Act.
(4) Includes options to purchase shares of Common Stock exercisable
within 60 days of February 18, 1998.
11
(5) Includes options to purchase shares of Common Stock exercisable
within 60 days of February 18, 1998.
(6) Includes options to purchase shares of Common Stock exercisable
within 60 days of February 18, 1998.
(7) Includes options to purchase shares of Common Stock exercisable
within 60 days of February 18, 1998.
(8) Includes options to purchase shares of Common Stock exercisable
within 60 days of February 18, 1998.
(9) Includes options to purchase shares of Common Stock exercisable
within 60 days of February 18, 1998.
(10) Includes options to purchase shares of Common Stock exercisable
within 60 days of February 18, 1998.
(11) Includes options to purchase shares of Common Stock exercisable
within 60 days of February 18, 1998.
(12) Includes options to purchase shares of Common Stock exercisable
within 60 days of February 18, 1998.
(13) Includes options to purchase shares of Common Stock exercisable
within 60 days of February 18, 1998.
(14) Includes options to purchase shares of Common Stock exercisable
within 60 days of February 18, 1998.
(15) Includes options to purchase shares of Common Stock exercisable
within 60 days of February 18, 1998.
12
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, 1998:
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
----------------------
AWARDS
----------------------
ANNUAL COMPENSATION SECURITIES
FISCAL --------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) OPTIONS(#) COMPENSATION(2)
--------------------------- ------ ---------- ---------- ---------------------- ---------------
Carol A. Bartz........................ 1998 $ 515,000 $ 90,125 -- $ 39,000
Chairman of the Board and 1997 515,000 -- 560,000 39,000
Chief Executive Officer 1996 475,000 229,284 -- 38,500
Eric B. Herr.......................... 1998 $ 320,000 $ 48,000 -- $ 3,000
President and Chief Operating Officer 1997 320,000 -- 280,000 3,000
1996 310,000 124,926 -- 2,500
Dominic J. Gallello................... 1998 $ 275,000 $ 34,375 -- $ 3,000
Vice President, MCAD Market Group 1997 275,000 -- 210,000 3,000
1996 250,000 125,500 20,000 2,500
Godfrey R. Sullivan................... 1998 $ 260,000 $ 32,500 -- $ 3,000
Vice President, Personal Solutions 1997 260,000 -- 191,000 3,000
Group 1996 260,000 104,858 20,000 2,500
Michael E. Sutton..................... 1998 $ 250,000 $ -- -- $139,135
Vice President, Europe 1997 250,000 -- 70,000 179,241
1996 222,500 89,806 20,000 99,000
- --------
(1) Represents incentive bonuses for achievement of corporate, individual and
organizational objectives in fiscal years 1996 and 1998. Amounts for
fiscal year 1998 represent that portion of incentive bonuses which were
both known and paid as of the latest practicable date. The full amounts of
1998 bonuses will be disclosed in the proxy materials for the Company's
1998 Annual Meeting of Stockholders.
(2) Amounts reported for fiscal year 1998 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)
$3,621 paid by the Company for health insurance premiums on behalf of Mr.
Sutton; and (vi) $35,514 paid by the Company into an employee retirement
fund on behalf of Mr. Sutton. 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.
13
OPTION GRANTS
The Company did not grant any options to purchase shares of its Common Stock
to the Named Officers during the fiscal year ended January 31, 1998. The total
number of options granted to all employees during fiscal year 1998 was
2,322,181.
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 1998
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, 1998. 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, 1998.
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 AT
SHARES YEAR END(#) FISCAL YEAR END
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE(#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ---------- ----------- ------------- ----------- -------------
Carol A. Bartz.......... 300,000 $7,217,376 1,080,000 440,000 $24,032,500 $6,285,000
Eric B. Herr............ 225,000 $5,937,344 199,000 206,000 $ 3,190,125 $1,320,500
Dominic J. Gallello..... -- -- 203,334 206,666 $ 2,431,251 $2,169,999
Godfrey R. Sullivan..... 120,000 $2,077,877 150,334 190,666 $ 1,924,876 $2,002,249
Michael E. Sutton....... 30,000 $ 382,500 86,694 97,786 $ 885,771 $1,087,339
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 six 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 20,000 shares of Common Stock of the
Company, with subsequent annual grants of 10,000 shares. Each option granted
under the 1990 Directors' Option Plan vests cumulatively as to 1/3 of the
shares subject to the option on each anniversary of the date of grant, 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.
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
14
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.
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, 1998.
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: February 27, 1998
15
APPENDIX A
AUTODESK, INC.
1996 STOCK PLAN
(as amended January 27, 1998)
1. Purposes of the Plan. The purposes of this Stock Plan are:
--------------------
. to attract and retain the best available personnel for positions of
substantial responsibility,
. to provide additional incentive to Employees and Consultants, and
. to promote the success of the Company's business.
Options granted under the Plan may be Incentive Stock Options or Nonstatutory
Stock Options, as determined by the Administrator at the time of grant. Stock
Purchase Rights and Long-Term Performance Awards may also be granted under the
Plan.
2. Definitions. As used herein, the following definitions shall apply:
-----------
(a) "Administrator" means the Board or any of its Committees as shall be
-------------
administering the Plan, in accordance with Section 4 of the Plan.
(b) "Applicable Laws" means the legal requirements relating to the
---------------
administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code and the applicable laws of any
foreign country or jurisdiction where Options or Stock Purchase Rights will be
or are being granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
-----
(d) "Code" means the Internal Revenue Code of 1986, as amended.
----
(e) "Committee" means a Committee appointed by the Board in accordance
---------
with Section 4 of the Plan.
(f) "Common Stock" means the Common Stock of the Company.
------------
(g) "Company" means Autodesk, Inc., a Delaware corporation.
-------
(h) "Consultant" means any person, including an advisor, engaged by the
----------
Company or a Parent or Subsidiary to render services and who is compensated for
such services. The term "Consultant" shall not include Directors who are paid
only a director's fee by the Company or who are not compensated by the Company
for their services as Directors.
(i) "Continuous Status as an Employee or Consultant" means that the
----------------------------------------------
employment or consulting relationship with the Company, its Parent, or any
Subsidiary, is not interrupted or terminated. Continuous Status as an Employee
or Consultant shall not be considered interrupted in the case of (i) any leave
of absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor. A
leave of absence approved by the Company shall include sick leave, military
leave, or any other personal leave approved by an authorized representative of
the Company. For purposes of Incentive Stock Options, no such leave may exceed
ninety days, unless reemployment upon expiration of such leave is guaranteed by
statute or contract. If reemployment upon expiration of a leave of absence
approved by the Company is not so guaranteed, on the 181st day of such leave any
Incentive Stock Option held by the Optionee shall cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory
Stock Option.
(j) "Director" means a member of the Board.
--------
(k) "Disability" means total and permanent disability as defined in
----------
Section 22(e)(3) of the Code.
(l) "Employee" means any person, including Officers and Directors,
--------
employed by the Company or any Parent or Subsidiary of the Company. Neither
service as a Director nor payment of a director's fee by the Company shall be
sufficient to constitute "employment" by the Company.
(m) "Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended.
(n) "Fair Market Value" means, as of any date, the value of Common Stock
-----------------
determined as follows:
(i) If the Common Stock is listed on any established stock exchange
or national market system, including without limitation The Nasdaq National
Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market
Value shall be the closing sales price for such stock (or the closing bid, if no
sales were reported) as quoted on such exchange or system for the date of such
determination, as reported in The Wall Street Journal or such other source as
-----------------------
the Administrator deems reliable;
(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the date of determination, as reported in The
---
Wall Street Journal or such other source as the Administrator deems reliable;
- -------------------
(iii) In the absence of an established market for the Common Stock,
the Fair Market Value shall be determined in good faith by the Administrator.
Page 2
(o) "Incentive Stock Option" means an Option intended to qualify as an
----------------------
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
(p) "Insiders" means individuals subject to Section 16 of the Exchange
--------
Act.
(q) "Long-Term Performance Award" means an award of cash or stock
---------------------------
pursuant to Section 12 of the Plan.
(r) "Nonstatutory Stock Option" means an Option not intended to qualify
-------------------------
as an Incentive Stock Option.
(s) "Notice of Grant" means a written or electronic notice evidencing
---------------
certain terms and conditions of an individual Option, Stock Purchase Right or
Long-Term Performance Award grant. The Notice of Grant is part of the Option
Agreement.
(t) "Officer" means a person who is an officer of the Company within the
-------
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(u) "Option" means a stock option granted pursuant to the Plan.
------
(v) "Option Agreement" means a written or electronic agreement between
----------------
the Company and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and conditions of the
Plan.
(w) "Optioned Stock" means the Common Stock subject to an Option, Stock
--------------
Purchase Right or Long-Term Performance Award.
(x) "Optionee" means an Employee or Consultant who holds an outstanding
--------
Option, Stock Purchase Right or Long-Term Performance Award.
(y) "Parent" means a "parent corporation," whether now or hereafter
------
existing, as defined in Section 424(e) of the Code.
(z) "Plan" means this 1996 Stock Plan, as amended.
----
(aa) "Restricted Stock" means shares of Common Stock acquired pursuant to
----------------
a grant of Stock Purchase Rights under Section 11 below.
(bb) "Restricted Stock Purchase Agreement" means a written agreement
-----------------------------------
between the Company and the Optionee evidencing the terms and restrictions
applying to stock purchased under a Stock Purchase Right. The Restricted Stock
Purchase Agreement is subject to the terms and conditions of the Plan and the
Notice of Grant.
Page 3
(cc) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any successor to
----------
Rule 16b-3, as in effect when discretion is being exercised with respect to the
Plan.
(dd) "Section 16(b)" means Section 16(b) of the Securities Exchange Act of
-------------
1934, as amended.
(ee) "Share" means a share of the Common Stock, as adjusted in accordance
-----
with Section 14 of the Plan.
(ff) "Stock Purchase Right" means the right to purchase Common Stock
--------------------
pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.
(gg) "Subsidiary" means a "subsidiary corporation", whether now or
----------
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 14 of the
-------------------------
Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 3,500,000 shares, plus (a) an annual increase to be made on
the last day of the immediately preceding fiscal year equal to the lesser of (i)
500,000 Shares, (ii) 3.5% of the Issued Shares (as defined below) on such date
or (iii) a lesser amount determined by the Board, (b) any Shares which have been
reserved but unissued under the Company's 1987 Stock Option Plan ("1987 Plan")
as of the date of stockholder approval of the original adoption of this Plan not
to exceed 3,000,000 Shares, and (c) any Shares returned to the 1987 Plan as a
result of termination of options under the 1987 Plan not to exceed 9,000,000
Shares. "Issued Shares" shall mean the number of shares of Common Stock of the
Company outstanding on such date plus any shares reacquired by the Company
during the fiscal year that ends on such date.
If an Option, Stock Purchase Right or Long-Term Performance Award expires
or becomes unexercisable without having been exercised in full, the unpurchased
Shares which were subject thereto shall become available for future grant or
sale under the Plan (unless the Plan has terminated); provided, however, that
Shares that have actually been issued under the Plan, whether upon exercise of
an Option, Stock Purchase Right or Long-Term Performance Award, shall not be
returned to the Plan and shall not become available for future distribution
under the Plan, except that if Shares of Restricted Stock are repurchased by the
Company at their original purchase price, and the original purchaser of such
Shares did not receive any benefits of ownership of such Shares, such Shares
shall become available for future grant under the Plan. For purposes of the
preceding sentence, voting rights shall not be considered a benefit of Share
ownership.
Page 4
4. Administration of the Plan.
--------------------------
(b) Procedure.
---------
(i) Multiple Administrative Bodies. If permitted by Rule 16b-3, the
------------------------------
Plan may be administered by different bodies with respect to Directors, Officers
who are not Directors, and Employees who are neither Directors nor Officers.
(ii) Administration With Respect to Directors and Officers Subject to
----------------------------------------------------------------
Section 16(b). With respect to Option, Stock Purchase Right or Long-Term
- -------------
Performance Award grants made to Employees who are also Officers or Directors
subject to Section 16(b) of the Exchange Act, the Plan shall be administered by
(A) the Board, if the Board may administer the Plan in a manner complying with
the rules under Rule 16b-3 relating to the disinterested administration of
employee benefit plans under which Section 16(b) exempt discretionary grants and
awards of equity securities are to be made, or (B) a committee designated by the
Board to administer the Plan, which committee shall be constituted to comply
with the rules under Rule 16b-3 relating to the disinterested administration of
employee benefit plans under which Section 16(b) exempt discretionary grants and
awards of equity securities are to be made. Once appointed, such Committee shall
continue to serve in its designated capacity until otherwise directed by the
Board. From time to time the Board may increase the size of the Committee and
appoint additional members, remove members (with or without cause) and
substitute new members, fill vacancies (however caused), and remove all members
of the Committee and thereafter directly administer the Plan, all to the extent
permitted by the rules under Rule 16b-3 relating to the disinterested
administration of employee benefit plans under which Section 16(b) exempt
discretionary grants and awards of equity securities are to be made.
(iii) Administration With Respect to Other Persons. With
--------------------------------------------
respect to Option, Stock Purchase Right or Long-Term Performance Award grants
made to Employees or Consultants who are neither Directors nor Officers of the
Company, the Plan shall be administered by (A) the Board or (B) a committee
designated by the Board, which committee shall be constituted to satisfy
Applicable Laws. Once appointed, such Committee shall serve in its designated
capacity until otherwise directed by the Board. The Board may increase the size
of the Committee and appoint additional members, remove members (with or without
cause) and substitute new members, fill vacancies (however caused), and remove
all members of the Committee and thereafter directly administer the Plan, all to
the extent permitted by Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the Plan,
---------------------------
and in the case of a Committee, subject to the specific duties delegated by the
Board to such Committee, the Administrator shall have the authority, in its
discretion:
(i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(n) of the Plan;
Page 5
(ii) to select the Consultants and Employees to whom Options, Stock
Purchase Rights and Long-Term Performance Awards may be granted hereunder;
(iii) to determine whether and to what extent Options, Stock Purchase
Rights and Long-Term Performance Awards or any combination thereof, are granted
hereunder;
(iv) to determine the number of shares of Common Stock to be covered
by each Option, Stock Purchase Right and Long-Term Performance Awards granted
hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any award granted hereunder. Such terms and conditions
include, but are not limited to, the exercise price, the time or times when
Options, Stock Purchase Rights or Long-Term Performance Awards may be exercised
(which may be based on performance criteria), any vesting acceleration or waiver
of forfeiture restrictions, and any restriction or limitation regarding any
Option, Stock Purchase Right or Long-Term Performance Awards or the shares of
Common Stock relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine;
(vii) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan;
(viii) to prescribe, amend and rescind rules and regulations relating
to the Plan, including rules and regulations relating to sub-plans established
for the purpose of qualifying for preferred tax treatment under foreign tax
laws;
(ix) to modify or amend each Option, Stock Purchase Right
or Long-Term Performance Awards (subject to Section 16(c) of the Plan),
including the discretionary authority to extend the post-termination
exercisability period of Options longer than is otherwise provided for in the
Plan;
(x) to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option, Stock Purchase
Right or Long-Term Performance Awards previously granted by the
Administrator;
(xi) to determine the terms and restrictions applicable
to Options, Stock Purchase Rights, Long-Term Performance Awards and any
Restricted Stock; and
(xii) to make all other determinations deemed necessary or advisable
for administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's decisions,
----------------------------------
determinations and interpretations shall be final and binding on all Optionees
and any other holders of Options, Stock Purchase Rights or Long-Term Performance
Awards.
Page 6
5. Eligibility. Nonstatutory Stock Options, Stock Purchase Rights and Long-
-----------
Term Performance Awards may be granted to Employees and Consultants. Incentive
Stock Options may be granted only to Employees. If otherwise eligible, an
Employee or Consultant who has been granted an Option, Stock Purchase Right or
Long-Term Performance Awards may be granted additional Options, Stock Purchase
Rights or Long-Term Performance Awards.
6. Limitations.
-----------
(a) Each Option shall be designated in the written option agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options.
(b) Neither the Plan nor any Option, Stock Purchase Right or Long-Term
Performance Award shall confer upon an Optionee any right with respect to
continuing the Optionee's employment or consulting relationship with the
Company, nor shall they interfere in any way with the Optionee's right or the
Company's right to terminate such employment or consulting relationship at any
time, with or without cause.
(c) The following limitations shall apply to grants of Options to
Employees:
(i) No Employee shall be granted, in any fiscal year of the Company,
Options to purchase more than 1,000,000 Shares.
(ii) In connection with his or her initial employment, an
Employee may be granted Options to purchase up to an additional 1,000,000 Shares
which shall not count against the limit set forth in subsection (i) above.
(iii) The foregoing limitations shall be adjusted proportionately in
connection with any change in the Company's capitalization as described in
Section 14.
(iv) If an Option is cancelled in the same fiscal year of the Company
in which it was granted (other than in connection with a transaction described
in Section 14), the cancelled Option will be counted against the limits set
forth in subsections (i) and (ii) above.
7. Term of Plan. Subject to Section 20 of the Plan, the Plan shall become
------------
effective upon the earlier to occur of its adoption by the Board or its approval
by the stockholders of the Company as described in Section 20 of the Plan. It
shall continue in effect for a term of ten (10) years unless terminated earlier
under Section 16 of the Plan.
Page 7
8. Term of Option. The term of each Option shall be stated in the Notice of
--------------
Grant; provided, however, that in the case of an Incentive Stock Option, the
term shall be ten (10) years from the date of grant or such shorter term as may
be provided in the Notice of Grant.
9. Option Exercise Price and Consideration.
---------------------------------------
(a) Exercise Price. The per share exercise price for the Shares to be
--------------
issued pursuant to exercise of an Option shall be no less than 100% of the Fair
Market Value per Share on the date of grant.
(b) Waiting Period and Exercise Dates. At the time an Option is granted,
---------------------------------
the Administrator shall fix the period within which the Option may be exercised
and shall determine any conditions which must be satisfied before the Option may
be exercised. In so doing, the Administrator may specify that an Option may not
be exercised until either the completion of a service period or the achievement
of performance criteria with respect to the Company or the Optionee.
(c) Form of Consideration. The Administrator shall determine the
---------------------
acceptable form of consideration for exercising an Option, including the method
of payment. In the case of an Incentive Stock Option, the Administrator shall
determine the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other Shares which (A) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more than six months
on the date of surrender, and (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised;
(v) delivery of a properly executed exercise notice together with
such other documentation as the Administrator and the broker, if applicable,
shall require to effect an exercise of the Option and delivery to the Company of
the sale or loan proceeds required to pay the exercise price;
(vi) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's participation
in any Company-sponsored deferred compensation program or arrangement;
(vii) any combination of the foregoing methods of payment; or
Page 8
(viii) such other consideration and method of payment for the issuance
of Shares to the extent permitted by Applicable Laws.
10. Exercise of Option.
------------------
(a) Procedure for Exercise; Rights as a Stockholder. Any Option granted
-----------------------------------------------
hereunder shall be exercisable according to the terms of the Plan and at such
times and under such conditions as determined by the Administrator and set forth
in the Option Agreement and the Notice of Grant.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company receives: (i)
written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the stock certificate evidencing such Shares is issued (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any
other rights as a stockholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly after the Option is exercised. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 14 of the Plan.
Exercising an Option in any manner shall decrease the number of Shares
thereafter available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is exercised.
(b) Termination of Employment or Consulting Relationship. Upon termination
----------------------------------------------------
of an Optionee's Continuous Status as an Employee or Consultant, other than upon
the Optionee's death or Disability, the Optionee may exercise his or her Option
within such period of time as is specified in the Notice of Grant to the extent
that he or she is entitled to exercise it on the date of termination (but in no
event later than the expiration of the term of such Option as set forth in the
Notice of Grant). In the absence of a specified time in the Notice of Grant, the
Option shall remain exercisable for three (3) months following the Optionee's
termination. If, on the date of termination, the Optionee is not entitled to
exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified by the
Administrator, the Option shall terminate, and the Shares covered by such Option
shall revert to the Plan.
Notwithstanding the above, in the event of an Optionee's change in
status from Consultant to Employee or Employee to Consultant, the Optionee's
Continuous Status as an Employee or Consultant shall not automatically terminate
solely as a result of such change in status.
Page 9
In such event, an Incentive Stock Option held by the Optionee shall cease to be
treated as an Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option three months and one day following such change of
status.
(c) Disability of Optionee. Upon termination of an Optionee's Continuous
----------------------
Status as an Employee or Consultant as a result of the Optionee's Disability,
the Optionee may exercise his or her Option at any time within twelve (12)
months (or such other period of time as is determined by the Administrator) from
the date of termination, but only to the extent that the Optionee is entitled to
exercise it on the date of termination (and in no event later than the
expiration of the term of the Option as set forth in the Notice of Grant). If,
on the date of termination, the Optionee is not entitled to exercise his or her
entire Option, the Shares covered by the unexercisable portion of the Option
shall revert to the Plan. If, after termination, the Optionee does not exercise
his or her Option within the time specified herein, the Option shall terminate,
and the Shares covered by such Option shall revert to the Plan.
(d) Death of Optionee. In the event of the death of an Optionee, the
-----------------
Option shall become fully exercisable, including as to Shares for which it would
not otherwise be exercisable and may be exercised at any time within twelve (12)
months (or such other period of time as is determined by the Administrator)
following the date of death (but in no event later than the expiration of the
term of such Option as set forth in the Notice of Grant), by the Optionee's
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance. If, after death, the Optionee's estate or a person who acquired
the right to exercise the Option by bequest or inheritance does not exercise the
Option within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.
(e) Rule 16b-3. Options granted to individuals subject to Section 16 of
----------
the Exchange Act (Insiders) must comply with the applicable provisions of Rule
16b-3 and shall contain such additional conditions or restrictions as may be
required thereunder to qualify for the maximum exemption from Section 16 of the
Exchange Act with respect to Plan transactions.
11. Stock Purchase Rights.
---------------------
(a) Rights to Purchase. Stock Purchase Rights may be issued either alone,
------------------
in addition to, or in tandem with other awards granted under the Plan and/or
cash awards made outside of the Plan. After the Administrator determines that it
will offer Stock Purchase Rights under the Plan, it shall advise the offeree in
writing or electronically, by means of a Notice of Grant, of the terms,
conditions and restrictions related to the offer, including the number of Shares
that the offeree shall be entitled to purchase, the price to be paid provided,
however, that the purchase price shall not be less than the par value of the
Company's Common Stock, and the time within which the offeree must accept such
offer, which shall in no event exceed ninety (90) days from the later of (i) the
date upon which the Administrator made the determination to grant the Stock
Purchase Right, or (ii) the date the Notice of Grant of Stock Purchase Rights is
delivered to the Executive. The offer shall be accepted by execution of a
Restricted Stock Purchase Agreement in the form determined by the
Page 10
Administrator. The number of Shares subject to grants of Stock Purchase Rights
shall not exceed fifteen percent (15%) of the total number of Shares authorized
under the Plan.
(b) Repurchase Option. The Restricted Stock Purchase Agreement shall grant
-----------------
the Company a repurchase option exercisable upon the voluntary or involuntary
termination of the purchaser's employment with the Company for any reason
(including Disability); provided, however, that such repurchase option shall
terminate in the event of the death of the Purchaser. In all other cases, the
repurchase option shall lapse at a rate determined by the Administrator;
provided, however that, except as otherwise provided in this subsection, no
portion of the repurchase option shall lapse before the end of three years from
the date of purchase of the Restricted Stock. The purchase price for Shares
repurchased pursuant to the Restricted Stock Purchase Agreement shall be the
original price paid by the purchaser and may be paid by cancellation of any
indebtedness of the purchaser to the Company.
(c) Rule 16b-3. Stock Purchase Rights granted to Insiders, and Shares
----------
purchased by Insiders in connection with Stock Purchase Rights, shall be subject
to any restrictions applicable thereto in compliance with Rule 16b-3. An Insider
may only purchase Shares pursuant to the grant of a Stock Purchase Right, and
may only sell Shares purchased pursuant to the grant of a Stock Purchase Right,
during such time or times as are permitted by Rule 16b-3.
(d) Other Provisions. The Restricted Stock Purchase Agreement shall
----------------
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion. In
addition, the provisions of Restricted Stock Purchase Agreements need not be the
same with respect to each purchaser.
(e) Rights as a Stockholder. Once the Stock Purchase Right is exercised,
-----------------------
the purchaser shall have the rights equivalent to those of a stockholder, and
shall be a stockholder when his or her purchase is entered upon the records of
the duly authorized transfer agent of the Company. No adjustment will be made
for a dividend or other right for which the record date is prior to the date the
Stock Purchase Right is exercised, except as provided in Section 14 of the
Plan.
(f) Issuance of Shares. As soon as possible after full payment of the
------------------
purchase price, the Shares purchased shall be duly issued; provided, however,
that the Administrator may require that the purchaser make adequate provision
for any Federal and State withholding obligations of the Company as a condition
to such purchase.
(g) Shares Available Under the Plan. Exercise of a Stock Purchase Right in
-------------------------------
any manner shall result in a decrease in the number of Shares that thereafter
shall be available for reissuance under the Plan.
(h) Stock Withholding to Satisfy Tax Obligations. The Administrator may,
--------------------------------------------
in its discretion, permit a purchaser to satisfy any withholding tax obligation
that arises in connection with the vesting of Shares by electing to have the
Company withhold from such vested Shares that number of Shares having a Fair
Market Value equal to the amount required to be withheld. Elections
Page 11
by purchasers to have Shares withheld for this purpose shall be made in writing
in a form acceptable to the Administrator and shall be subject to such
restrictions and limitations as the Administrator may specify.
12. Long-Term Performance Awards.
----------------------------
(a) Awards. Long-Term Performance Awards are cash or stock bonus awards
------
that may be granted either independently or along with, in addition to or in
tandem with other awards granted under the Plan and/or awards made outside of
the Plan. Long-Term Performance Awards shall not require payment by the
recipient of any consideration for the Long-Term Performance Award or for the
Shares covered by such award. The Administrator shall determine the nature,
length and starting date of any performance period (the "Performance Period")
for each Long-Term Performance Award and shall determine the performance and/or
employment factors to be used in the determination of the value of Long-Term
Performance Awards and the extent to which such Long-Term Performance Awards
have been earned. Shares issued pursuant to a Long-Term Performance Award may be
made subject to various conditions, including vesting or forfeiture provisions.
Long-Term Performance Awards may vary from participant to participant and
between groups of participants and shall be based upon the achievement of
Company, Subsidiary and/or individual performance factors or upon such other
criteria as the Administrator may deem appropriate. Performance Periods may
overlap and participants may participate simultaneously with respect to Long-
Term Performance Awards that are subject to different Performance Periods and
different performance factors and criteria. Long-Term Performance Awards shall
be confirmed by, and be subject to the terms of, a written Long-Term Performance
Award agreement.
(b) Value of Awards. At the beginning of each Performance Period, the
---------------
Administrator may determine for each Long-Term Performance Award subject to such
Performance Period the range of dollar values and/or numbers of Shares to be
issued to the participant at the end of the Performance Period if and to the
extent that the relevant measures of performance for such Long-Term Performance
Award are met. Such dollar values or numbers of Shares may be fixed or may vary
in accordance with such performance or other criteria as may be determined by
the Administrator.
(c) Adjustment of Awards. Notwithstanding the provisions of Section 16
--------------------
hereof, the Administrator may, after the grant of Long-Term Performance Awards,
adjust the performance factors applicable to such Long-Term Performance Awards
to take into account changes in the law or in accounting or tax rules and to
make such adjustments as the Administrator deems necessary or appropriate to
reflect the inclusion or exclusion of the impact of extraordinary or unusual
items, events or circumstances in order to avoid windfalls or hardships.
(d) Termination. Unless otherwise provided in the applicable Long-Term
-----------
Performance Award agreement, if a participant terminates his or her employment
or his or her consultancy during a Performance Period because of death or
Disability, the Administrator may in its discretion provide for an earlier
payment in settlement of such award, which payment may be in such amount and
under such terms and conditions as the Administrator deems appropriate.
Page 12
Unless otherwise provided in the applicable Long-Term Performance Award
agreement, if a participant terminates employment or his or her consultancy
during a Performance Period for any reason other than death or Disability, then
such a participant shall not be entitled to any payment with respect to the
Long-Term Performance Award subject to such Performance Period, unless the
Administrator shall otherwise determine in its discretion.
(e) Form of Payment. The earned portion of a Long-Term Performance Award
---------------
may be paid currently or on a deferred basis (with such interest or earnings
equivalent as may be determined by the Administrator). Payment shall be made in
the form of cash or whole Shares (including Restricted Stock), or a combination
thereof, either in a lump sum payment or in installments, all as the
Administrator shall determine.
(f) Reservation of Shares. In the event that the Administrator grants a
---------------------
Long-Term Performance Award that is payable in cash or Common Stock, the
Administrator may (but need not) reserve an appropriate number of Shares under
the Plan at the time of grant of the Long-Term Performance Award. If and to the
extent that the full amount reserved is not actually paid in Common Stock, the
Shares representing the portion of the reserve for that Long-Term Performance
Award that is not actually issued in satisfaction of such Long-Term Performance
Award shall again become available for award under the Plan. If Shares are not
reserved by the Administrator at the time of grant, then (i) no Shares shall be
deducted from the number of Shares available for grant under the Plan at that
time and (ii) at the time of payment of the Long-Term Performance Award, only
the number of Shares actually issued to the participant shall be so deducted. If
there are not a sufficient number of Shares available under the Plan for
issuance to a participant at the time of payment of a Long-Term Performance
Award, any shortfall shall be paid by the Company in cash.
(g) Rule 16b-3. Grants of Long-Term Performance Awards to Directors and
----------
Officers must comply with the applicable provisions of Rule 16b-3 and such Long-
Term Performance Awards shall contain such additional conditions or
restrictions, if any, as may be required by Rule 16b-3 to be in the written
agreement relating to such Long-Term Performance Awards in order to qualify for
the maximum exemption from Section 16 of the Exchange Act with respect to Plan
transactions.
13. Non-Transferability of Options, Stock Purchase Rights and Long-Term
-------------------------------------------------------------------
Performance Awards. An Option, Stock Purchase Right or Long-Term Performance
- ------------------
Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed
of in any manner other than by will or by the laws of descent or distribution
and may be exercised, during the lifetime of the Optionee, only by the
Optionee.
14. Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset
------------------------------------------------------------------------
Sale.
- ----
(a) Changes in Capitalization. Subject to any required action by the
-------------------------
stockholders of the Company, the number of Shares covered by each outstanding
Option, Long-Term Performance Award and Stock Purchase Right, and the number of
Shares which have been authorized for issuance
Page 13
under the Plan but as to which no Options, Long-Term Performance Awards or Stock
Purchase Rights have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option, Long-Term Performance Award or
Stock Purchase Right, as well as the price per Share covered by each such
outstanding Option, Long-Term Performance Award or Stock Purchase Right, shall
be proportionately adjusted for any increase or decrease in the number of issued
Shares resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued Shares effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of Shares of
stock of any class, or securities convertible into Shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of Shares subject to an Option, Long-Term Performance Award
or Stock Purchase Right.
(b) Dissolution or Liquidation. In the event of the proposed dissolution
--------------------------
or liquidation of the Company, the Administrator shall notify each Optionee as
soon as practicable prior to the effective date of such proposed transaction.
The Administrator in its discretion may provide for an Optionee to have the
right to exercise his or her Option, Stock Purchase Right or Long-Term
Performance Award until ten (10) days prior to such transaction as to all of the
Optioned Stock covered thereby, including Shares as to which the Option would
not otherwise be exercisable. In addition, the Administrator may provide that
any Company repurchase option applicable to any Shares purchased upon exercise
of an Option, Stock Purchase Right or Long-Term Performance Award shall lapse as
to all such Shares, provided the proposed dissolution or liquidation takes place
at the time and in the manner contemplated. To the extent it has not been
previously exercised, an Option, Stock Purchase Right or Long-Term Performance
Award will terminate immediately prior to the consummation of such proposed
action.
(c) Merger or Asset Sale. In the event of a merger of the Company with or
--------------------
into another corporation, or the sale of substantially all of the assets of the
Company, each outstanding Option, Stock Purchase Right and Long-Term Performance
Award shall be assumed or an equivalent option or right substituted by the
successor corporation or a Parent or Subsidiary of the successor corporation, or
in the event that the successor corporation refuses to assume or substitute for
the Option, Stock Purchase Right or Long-Term Performance Award, the Optionee
shall have the right to exercise the Option, Stock Purchase Right or Long-Term
Performance Award as to all of the Optioned Stock, including Shares as to which
it would not otherwise be exercisable. If an Option, Stock Purchase Right or
Long-Term Performance Award is exercisable in lieu of assumption or substitution
in the event of a merger or sale of assets, the Administrator shall notify the
Optionee in writing or electronically that the Option, Stock Purchase Right or
Long-Term Performance Award shall be fully exercisable for a period of fifteen
(15) days from the date of such notice, and the Option, Stock Purchase Right or
Long-Term Performance Award shall terminate upon the expiration of such period.
For the purposes of this paragraph, the Option, Stock Purchase Right or Long-
Term Performance Award shall be considered assumed if, following the merger or
sale of assets, the option or right confers the right to purchase or receive,
for each Share of Optioned Stock subject to the
Page 14
Option, Stock Purchase Right or Long-Term Performance Award immediately
prior to the merger or sale of assets, the consideration (whether stock, cash,
or other securities or property) received in the merger or sale of assets by
holders of Common Stock for each Share held on the effective date of the
transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the merger or sale of
assets was not solely common stock of the successor corporation or its Parent,
the Administrator may, with the consent of the successor corporation, provide
for the consideration to be received upon the exercise of the Option, Stock
Purchase Right or Long-Term Performance Award, for each Share of Optioned Stock
subject to the Option, Stock Purchase Right or Long-Term Performance Award, to
be solely common stock of the successor corporation or its Parent equal in fair
market value to the per share consideration received by holders of Common Stock
in the merger or sale of assets.
15. Date of Grant. The date of grant of an Option, Stock Purchase Right or
-------------
Long-Term Performance Award shall be, for all purposes, the date on which the
Administrator makes the determination granting such Option, Stock Purchase Right
or Long-Term Performance Award, or such other later date as is determined by the
Administrator. Notice of the determination shall be provided to each Optionee
within a reasonable time after the date of such grant.
16. Amendment and Termination of the Plan.
-------------------------------------
(a) Amendment and Termination. The Board may at any time amend, alter,
-------------------------
suspend or terminate the Plan.
(b) Stockholder Approval. The Company shall obtain stockholder approval of
--------------------
any Plan amendment to the extent necessary and desirable to comply with
Rule 16b-3 or with Sections 162(m) or 422 of the Code (or any successor rule or
statute or other applicable law, rule or regulation, including the requirements
of any exchange or quotation system on which the Common Stock is listed or
quoted). Such stockholder approval, if required, shall be obtained in such a
manner and to such a degree as is required by the applicable law, rule or
regulation.
(c) Effect of Amendment or Termination. No amendment, alteration,
----------------------------------
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the
Company.
17. Conditions Upon Issuance of Shares.
----------------------------------
(a) Legal Compliance. Shares shall not be issued pursuant to the exercise
----------------
of an Option, Stock Purchase Right or Long-Term Performance Award unless the
exercise of such Option, Stock Purchase Right or Long-Term Performance Award and
the issuance and delivery of such Shares shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder,
Applicable Laws, and the requirements of any stock exchange or quotation system
upon which the
Page 15
Shares may then be listed or quoted, and shall be further subject to the
approval of counsel for the Company with respect to such compliance.
(b) Investment Representations. As a condition to the exercise of an
--------------------------
Option, Stock Purchase Right or Long-Term Performance Award, the Company may
require the person exercising such Option, Stock Purchase Right or Long-Term
Performance Award to represent and warrant at the time of any such exercise that
the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required.
18. Liability of Company
--------------------
(a) Inability to Obtain Authority. The inability of the Company to obtain
-----------------------------
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.
(b) Grants Exceeding Allotted Shares. If the Optioned Stock covered by an
--------------------------------
Option, Stock Purchase Right or Long-Term Performance Award exceeds, as of the
date of grant, the number of Shares which may be issued under the Plan without
additional stockholder approval, such Option, Stock Purchase Right or Long-Term
Performance Award shall be void with respect to such excess Optioned Stock,
unless stockholder approval of an amendment sufficiently increasing the
number of Shares subject to the Plan is timely obtained in accordance with
Section 16(b) of the Plan.
19. Reservation of Shares. The Company, during the term of this Plan, will at
---------------------
all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
20. Stockholder Approval. Continuance of the Plan shall be subject to approval
--------------------
by the stockholders of the Company within twelve (12) months before or after the
date the Plan is adopted. Such stockholder approval shall be obtained in the
manner and to the degree required under applicable federal and state law.
Page 16
APPENDIX B
AUTODESK, INC.
1998 EMPLOYEE QUALIFIED STOCK PURCHASE PLAN
The following constitute the provisions of the 1998 Employee Qualified
Stock Purchase Plan (herein called the "Plan") of Autodesk, Inc. (herein called
the "Company").
1. Purpose. The purpose of the Plan is to provide employees of the
-------
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the
intention of the Company to have the Plan qualify as an "Employee Stock Purchase
Plan" under Section 423 of the Internal Revenue Code of 1986. The provisions of
the Plan shall, accordingly, be construed so as to extend and limit
participation in a manner consistent with the requirements of that section of
the Code.
2. Definitions.
-----------
(a) "Board" shall mean the Board of Directors of the Company.
-----
(b) "Code" shall mean the Internal Revenue Code of 1986.
----
(c) "Common Stock" shall mean the Common Stock, par value $0.01 per
------------
share, of the Company.
(d) "Company" shall mean Autodesk, Inc., a Delaware corporation.
-------
(e) "Compensation" shall mean all regular straight time earnings,
------------
payments for overtime, shift premium and commissions, but exclusive of any
incentive compensation, incentive payments, bonuses, or other compensation.
(f) "Continuous Status as an Employee" shall mean the absence of any
--------------------------------
interruption or termination of service as an Employee. Continuous Status as an
Employee shall not be considered interrupted in the case of a leave of absence
agreed to in writing by the Company, provided that such leave is for a period of
not more than 90 days or reemployment upon the expiration of such leave is
guaranteed by contract or statute.
(g) "Designated Subsidiaries" shall mean the Subsidiaries which have
-----------------------
been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.
(h) "Employee" shall mean any person, including an officer, who is
--------
customarily employed for at least twenty (20) hours per week and more than five
(5) months in a calendar year by the Company or one of its Designated
Subsidiaries.
(i) "Exercise Date" shall mean the date one day prior to the date six
-------------
(6) months, twelve (12) months, eighteen (18) months or twenty-four (24) months
after the Offering Date of each Offering Period.
(j) "Exercise Period" shall mean a period commencing on an Offering
---------------
Date or on the day after an Exercise Date and terminating one day prior to the
date six (6) months later.
(k) "Offering Period" shall mean a period of twenty-four (24) months
---------------
consisting of four (4) six-month Exercise Periods during which options granted
pursuant to the Plan may be exercised.
(l) "Offering Date" shall mean the first day of each Offering Period
-------------
of the Plan.
(m) "Plan" shall mean this 1998 Employee Qualified Stock Purchase
----
Plan.
(n) "Subsidiary" shall mean a corporation, domestic or foreign, of
----------
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.
3. Eligibility.
-----------
(a) Any Employee as defined in paragraph 2 who shall be employed by
the Company on the Offering Date shall be eligible to participate in the Plan,
subject to limitations imposed by Section 423(b) of the Code.
(b) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) if, immediately after the
grant, such Employee (or any other person whose stock would be attributed to
such Employee pursuant to Section 424(d) of the Code) would own stock and/or
hold outstanding options to purchase stock possessing five percent (5%) or more
of the total combined voting power or value of all classes of stock of the
Company or of any subsidiary of the Company, or (ii) which permits such
Employee's rights to purchase stock under all employee stock purchase plans of
the Company and its subsidiaries to accrue at a rate which exceeds Twenty-Five
Thousand Dollars ($25,000) of fair market value of such stock (determined at the
time such option is granted) for each calendar year in which such option is
outstanding at any time.
4. Offering Periods. The Plan shall be implemented by twenty-four (24)
----------------
month Offering Periods beginning every six (6) months, until terminated in
accordance with Section 20 hereof; provided that, the first Offering Period
shall begin on the first business day after the Company's Special Meeting on
March 31,1998. The Board of Directors of the Company shall have the power to
change the duration of offering periods with respect to future offerings without
stockholder approval if such change is
-2-
announced at least fifteen (15) days prior to the scheduled beginning of the
first offering period to be affected.
5. Participation.
-------------
(a) An eligible Employee may become a participant in the Plan by
completing a subscription agreement authorizing payroll deductions on the form
provided by the Company and filing it with the Company's payroll office at least
one week prior to the applicable Offering Date, unless a later time for filing
the subscription agreement is set by the Board for all eligible Employees with
respect to a given offering.
(b) Payroll deductions for a participant shall continue at the rate
specified in the subscription agreement throughout the Offering Period with
automatic re-enrollment for the Offering Period which commences the day after
the Exercise Date at the same rate specified in the original subscription
agreement, subject to any change in subscription rate made pursuant to Section
6(c) or (d), unless sooner terminated by the participant as provided in Section
10.
6. Payroll Deductions.
------------------
(a) At the time a participant files his or her subscription agreement,
such participant shall elect to have payroll deductions made on each payday
during the offering period in an amount not exceeding fifteen percent (15%) of
his or her Compensation on each payroll date. The aggregate of such payroll
deductions during any offering period shall not exceed fifteen percent (15%) of
his or her aggregate Compensation during said offering period.
(b) All payroll deductions made by a participant shall be credited to
his or her account under the Plan. A participant may not make any additional
payments into such account.
(c) A participant may discontinue his or her participation in the Plan
as provided in Section 11, or may decrease, but not increase, the rate of his or
her payroll deductions during the Offering Period by completing or filing with
the Company a form provided by the Company notifying the payroll office of such
withdrawal or reduction of withholding rate. The change in rate shall be
effective as of the next pay date following receipt of the form or at such other
time as the Company and the participant may agree.
(d) A participant may increase or decrease the rate of withholding for
a new Offering Period so long as such election is made prior to the commencement
of such Offering Period (subject to the limitations set forth in Section 6(a)).
7. Grant of Option.
---------------
(a) On the Offering Date of each Offering Period, each eligible
Employee participating in the Plan shall be granted an option to purchase on
each Exercise Date during such Offering Period (at the per share option price)
up to a number of shares of the Company's Common
-3-
Stock determined by dividing such Employee's payroll deductions to be
accumulated prior to such Exercise Date by the lower of (i) eighty-five percent
(85%) of the fair market value of a share of the Company's Common Stock on the
Offering Date or (ii) eighty-five percent (85%) of the fair market value of a
share of the Company's Common Stock on the Exercise Date; provided that in no
event shall an Employee be permitted to purchase during an Offering Period a
number of shares in excess of a number determined by dividing $50,000 by the
fair market value of a share of the Company's Common Stock on the Offering Date,
subject to the limitations set forth in Sections 3(b) and 13 hereof. Fair market
value of a share of the Company's Common Stock shall be determined as provided
in Section 7(b) herein.
(b) The option price per share of the shares offered in a given
Exercise Period shall be the lower of: (i) 85% of the fair market value of a
share of the Common Stock of the Company on the Offering Date; or (ii) 85% of
the fair market value of a share of the Common Stock of the Company on the
Exercise Date. The fair market value of the Company's Common Stock on a given
date shall be the closing price as quoted on the Nasdaq Stock Market, Inc.'s
National Market or, if traded on a securities exchange, the closing price on
such exchange.
8. Exercise of Option. Unless a participant withdraws from the Plan as
------------------
provided in Section 11, his or her option for the purchase of shares will be
exercised automatically on each Exercise Date of the Offering Period, and the
maximum number of full shares subject to option will be purchased for him or her
at the applicable option price with the accumulated payroll deductions in his or
her account. During his or her lifetime, a participant's option to purchase
shares hereunder is exercisable only by him or her.
9. Delivery. As promptly as practicable after the Exercise Date of each
--------
offering, the Company shall arrange the delivery to each participant, as
appropriate, of a certificate representing the shares purchased upon exercise of
his or her option. Any cash remaining which is insufficient to purchase a full
share of Common Stock at the termination of each Exercise Period shall be
applied to such participant's account in the subsequent Exercise Period unless
the participant requests withdrawal of such cash.
10. Automatic Transfer to Low Price Offering Period. In the event that
-----------------------------------------------
the fair market value of the Company's Common Stock is lower on an Exercise Date
than it was on the first Offering Date for that Offering Period, all Employees
participating in the Plan on the Exercise Date shall be deemed to have withdrawn
from the Offering Period immediately after the exercise of their option on such
Exercise Date and to have enrolled as participants in a new Offering Period
which begins on or about the day following such Exercise Date. A participant
may elect to remain in the previous Offering Period by filing a written
statement declaring such election with the Company prior to the time of the
automatic change to the new Offering Period.
11. Withdrawal; Termination of Employment.
-------------------------------------
(a) A participant may withdraw all but not less than all the payroll
deductions credited to his or her account under the Plan at any time prior to
the Exercise Date of the Offering Period by
-4-
giving written notice to the Company. All of the participant's payroll
deductions credited to his or her account will be paid to him or her at the next
pay date after receipt of his or her notice of withdrawal and his or her option
for the current period will be automatically terminated, and no further payroll
deductions for the purchase of shares will be made during the Offering Period.
(b) Upon termination of the participant's Continuous Status as an
Employee prior to the Exercise Date for any reason, including retirement or
death, the payroll deductions credited to his or her account will be returned to
the participant's or, in the case the of participant's death, to the person or
persons entitled thereto under Section 15, and his or her option will be
automatically terminated.
(c) A participant's withdrawal from an offering will not have any
effect upon his or her eligibility to participate in a succeeding offering or in
any similar plan which may hereafter be adopted by the Company.
12. Interest. No interest shall accrue on the payroll deductions of a
--------
participant in the Plan.
13. Stock.
-----
(a) The maximum number of shares of the Company's Common Stock which
shall be made available for sale under the Plan shall be 2,000,000 shares, plus
an annual increase to be made on the last day of the immediately preceding
fiscal year equal to the lesser of (i) 2,500,000 shares, (ii) 2% of the Issued
Shares (as defined below) on such date or (iii) a lesser amount determined by
the Board, subject to adjustment upon changes in capitalization of the Company
as provided in Section 19 hereof. "Issued Shares" shall mean the number of
shares of Common Stock of the Company outstanding on such date plus any shares
reacquired by the Company during the fiscal year that ends on such date. If the
total number of shares which would otherwise be subject to options granted
pursuant to Section 7(a) hereof on the Exercise Date of an Offering Period
exceeds the number of shares then available under the Plan (after deduction of
all shares for which options have been exercised or are then outstanding), the
Company shall make a pro rata allocation of the shares remaining available for
option grant in as uniform a manner as shall be practicable and as it shall
determine to be equitable. In such event, the Company shall give written notice
of such reduction of the number of shares subject to the option to each Employee
affected thereby and shall similarly reduce the rate of payroll deductions, if
necessary.
(b) The participant will have no interest or voting right in shares
covered by his or her option until such option has been exercised.
(c) Shares to be delivered to a participant under the Plan will be
registered in the name of the participant or in the name of the participant and
his or her spouse.
14. Administration. The Plan shall be administered by the Board of
--------------
Directors of the Company or a committee appointed by the Board. The
administration, interpretation or application of the Plan by the Board or its
committee shall be final, conclusive and binding upon all participants. Members
of the Board who are eligible Employees are permitted to participate in the
Plan, provided that:
-5-
(a) Members of the Board who are eligible to participate in the Plan
may not vote on any matter affecting the administration of the Plan or the grant
of any option pursuant to the Plan.
(b) If a Committee is established to administer the Plan, no member of
the Board who is eligible to participate in the Plan may be a member of the
Committee.
15. Designation of Beneficiary.
--------------------------
(a) A participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the participant's account under
the Plan in the event of such participant's death subsequent to the end of the
offering period but prior to delivery to such participant of such shares and
cash. In addition, a participant may file a written designation of a
beneficiary who is to receive any cash from the participant's account under the
Plan in the event of such participant's death prior to the Exercise Date of the
offering period.
(b) Such designation of beneficiary may be changed by the participant
at any time by written notice. In the event of the death of a participant and
in the absence of a beneficiary validly designated under the Plan who is living
at the time of such participant's death, the Company shall deliver such shares
and/or cash to the executor or administrator of the estate of the participant,
or if no such executor or administrator has been appointed (to the knowledge of
the Company), the Company, in its discretion, may deliver such shares and/or
cash to the spouse or to any one or more dependents or relatives of the
participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.
16. Transferability. Neither payroll deductions credited to a
---------------
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 15 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds in accordance with Section 11.
17. Use of Funds. All payroll deductions received or held by the Company
------------
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.
18. Reports. Individual accounts will be maintained for each participant
-------
in the Plan. Statements of account will be given to participating Employees
annually promptly following the Exercise Date, which statements will set forth
the amounts of payroll deductions, the per share purchase price, the number of
shares purchased and the remaining cash balance, if any.
19. Adjustments Upon Changes in Capitalization. Subject to any required
------------------------------------------
action by the stockholders of the Company, the number of shares of Common Stock
covered by each option under the Plan which has not yet been exercised and the
number of shares of Common Stock which have been authorized for issuance under
the Plan but have not yet been placed under option (collectively, the
-6-
"Reserves"), as well as the price per share of Common Stock covered by each
option under the Plan which has not yet been exercised, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split or the payment of a stock dividend (but only
on the Common Stock) or any other increase or decrease in the number of shares
of Common Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the Company
shall not be deemed to have been "effected without receipt of consideration."
Such adjustment shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided herein, no
issue by the Company of shares of stock of any class, or securities convertible
into shares of stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of Common
Stock subject to an option.
In the event of the proposed dissolution or liquidation of the Company, the
offering period will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Board. In the event of a
proposed sale of all or substantially all of the assets of the Company, or the
merger of the Company with or into another corporation, each option under the
Plan shall be assumed or an equivalent option shall be substituted by such
successor corporation or a parent or subsidiary of such successor corporation,
unless the Board determines, in the exercise of its sole discretion and in lieu
of such assumption or substitution, that the participant shall have the right to
exercise the option as to all of the optioned stock, including shares as to
which the option would not otherwise be exercisable. If the Board makes an
option fully exercisable in lieu of assumption or substi tution in the event of
a merger or sale of assets, the Board shall notify the participant that the
option shall be fully exercisable for a period of thirty (30) days from the date
of such notice, and the option will terminate upon the expiration of such
period.
The Board may, if it so determines in the exercise of its sole discretion,
also make provision for adjusting the Reserves, as well as the price per share
of Common Stock covered by each outstanding option, in the event that the
Company effects one or more reorganizations, recapitalizations, rights offerings
or other increases or reductions of shares of its outstanding Common Stock.
20. Amendment or Termination. The Board of Directors of the Company may
------------------------
at any time terminate or amend the Plan. No such termination can affect options
previously granted, nor may an amendment make any change in any option
theretofore granted which adversely affects the rights of any participant. In
addition, to the extent necessary to comply with Rule 16b-3 under the Act or
under Section 423 of the Code (or any successor rule or provision or any other
applicable law or regulation), the Company shall obtain stockholder approval in
such a manner and to such a degree as so required.
21. Notices. All notices or other communications by a participant to the
-------
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.
-7-
22. Stockholder Approval.
--------------------
(a) Continuance of the Plan shall be subject to approval by the
stockholders of the Company within twelve (12) months before or after the date
the Plan is adopted. If such stockholder approval is obtained at a duly held
stockholders' meeting, it must be obtained by the affirmative vote of the
holders of a majority of the outstanding shares of the Company, or if such
stockholder approval is obtained by written consent, it must be obtained by the
unanimous written consent of all stockholders of the Company; provided, however,
that approval at a meeting or by written consent may be obtained by a lesser
degree of stockholder approval if the Board determines, in its discretion after
consultation with the Company's legal counsel, that such a lesser degree of
stockholder approval will comply with all applicable laws and will not adversely
affect the qualification of the Plan under Section 423 of the Code.
(b) If and in the event that the Company registers any class of equity
securities pursuant to Section 12 of the Exchange Act, any required approval of
the stockholders of the Company obtained after such registration shall be
solicited substantially in accordance with Section 14(a) of the Exchange Act and
the rules and regulations promulgated thereunder.
(c) If any required approval by the stockholders of the Plan itself or
of any amendment thereto is solicited at any time otherwise than in the manner
described in paragraph 21(b) hereof, then the Company shall, at or prior to the
first annual meeting of stockholders held subsequent to the later of (1) the
first registration of any class of equity securities of the Company under
Section 12 of the Exchange Act or (2) the granting of an option hereunder to an
officer or director after such registration, do the following:
(i) furnish in writing to the holders entitled to vote for the
Plan substantially the same information which would be required (if proxies to
be voted with respect to approval or dis approval of the Plan or amendment
were then being solicited) by the rules and regulations in effect under
Section 14(a) of the Exchange Act at the time such information is furnished;
and
(ii) file with, or mail for filing to, the Securities and
Exchange Commission four copies of the written information referred to in
subsection (i) hereof not later than the date on which such information is
first sent or given to stockholders.
23. Conditions Upon Issuance of Shares. Shares shall not be issued with
----------------------------------
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange upon which the shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.
As a condition to the exercise of an option, the Company may require the
person exercising such option to represent and warrant at the time of any such
exercise that the shares are being purchased only
-8-
for investment and without any present intention to sell or distribute such
shares if, in the opinion of counsel for the Company, such a representation is
required by any of the aforementioned applicable provisions of law.
24. Term of Plan. The Plan shall become effective upon the earlier to
------------
occur of its adoption by the Board of Directors or its approval by the
stockholders of the Company as described in paragraph 22. It shall continue in
effect for a term of twenty (20) years unless sooner terminated under paragraph
20.
-9-
P
R
O
X
Y
AUTODESK, INC.
PROXY FOR SPECIAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of AUTODESK, INC., a Delaware corporation,
hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders and
Proxy Statement, each dated February 27, 1998, and hereby appoints Carol A.
Bartz and Marcia K. Sterling, and each of them, proxies and attorneys-in-fact,
with full power to each of substitution, on behalf and in the name of the
undersigned, to represent the undersigned at the Special Meeting of Stockholders
of AUTODESK, INC. to be held on Tuesday, March 31, 1998, at 3:00 p.m., local
time, at the offices of Wilson Sonsini Goodrich & Rosati located at 650 Page
Mill Road, Palo Alto, California 94304 and at any adjournment or adjournments
thereof, and to vote all shares of Common Stock which the undersigned would be
entitled to vote, if then and there personally present, on the matters set forth
below.
A majority of such attorneys or substitutes as shall be present and shall
act at said meeting or any adjournment or adjournments thereof (or if only one
shall represent and act, then that one) shall have and may exercise all the
powers of said attorneys-in-fact hereunder.
SEE REVERSE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
PLEASE MARK
[ X ] VOTES AS IN
THIS EXAMPLE
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO CONTRARY DIRECTION IS INDICATED,
WILL BE VOTED FOR THE PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION OF
AUTODESK, INC. TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK TO
250,000,000, FOR THE PROPOSAL TO ADOPT THE 1998 EMPLOYEE QUALIFIED STOCK
PURCHASE PLAN, FOR THE PROPOSAL TO AMEND THE 1996 STOCK PLAN, AND AS SAID
PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
1. PROPOSAL TO AMEND THE [ ] [ ] [ ] 2. PROPOSAL TO ADOPT THE 1998 [ ] [ ] [ ]
CERTIFICATE OF EMPLOYEE QUALIFIED STOCK
INCORPORATION OF PURCHASE PLAN.
AUTODESK, INC. TO
INCREASE THE NUMBER OF
AUTHORIZED SHARES OF
COMMON STOCK TO
250,000,000.
FOR AGAINST ABSTAIN
3. PROPOSAL TO AMEND THE [ ] [ ] [ ] In their discretion, the proxies are authorized to vote upon such
1996 STOCK PLAN. other matter or matters which may properly come before the meeting or
any adjournment or adjournments thereof.
MARK HERE (This Proxy should be marked, dated, signed by each
FOR stockholder(s) exactly as his or her name appears hereon, and
ADDRESS [ ] returned promptly in the enclosed envelope. Persons signing in a
CHANGE AND fiduciary capacity should so indicate. If shares are held by
NOTE BELOW joint tenants or as community property, both should sign.)
Signature: Date
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Signature: Date
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