Q: |
Q:Where can I find the voting results of the Special Meeting?
A: We intend to announce preliminary voting results at the Special Meeting and expect to provide final results in a Current Report on Form 8-K within four business days of the Special Meeting.
Special Meeting Proxy Statement 4
QUESTIONS AND ANSWERS ABOUT THE 2012 EMPLOYEE PLAN AND EQUITY COMPENSATION AT AUTODESK | | Q: | Why is Autodesk asking stockholders to approve the amendment to the 2012 Employee Plan? |
A: We are asking stockholders to approve the amendment to the 2012 Employee Plan to increase the number of shares reserved for issuance under the 2012 Employee Plan by 6,350,000 shares and to add new performance goals under the 2012 Employee Plan. As further described in Proposal 1, we are seeking stockholder approval so that we can continue to use the 2012 Employee Plan to achieve Autodesk’s employee performance, recruiting and retention goals. A: | We intend | Q: | Why is Autodesk asking stockholders to announce preliminary voting resultsapprove the amendment to the 2012 Employee Plan at the Special Meeting and expect to provide final results in a current report on Form 8-K within four business days of the Special Meeting. In addition, the results will be posted on our website, atwww.autodesk.com under “Investors.”this time? |
A: We are asking, as part of this proposal, that our stockholders add shares to the depleting pool of shares available under the 2012 Employee Stock Plan and approve the addition of new performance goals. By obtaining stockholder approval at the Special Meeting on January 14, 2014, the Compensation and Human Resources Committee (the "Compensation Committee") will have additional flexibility to design executive compensation programs during the annual compensation cycle in March 2014. In addition, based on the number of awards granted in each of fiscal 2013 and 2014, the pool of shares available under the existing 2012 Employee Plan will be close to depleted by the middle of fiscal 2015. Rather than waiting until the 2014 Annual Meeting of Stockholders, which will be held in the middle of fiscal 2015, we are holding the Special Meeting on January 14, 2014 to seek approval of the amendment to the 2012 Employee Plan to allow us to plan accordingly. | | Q: | Does this amendment change Autodesk’s equity grant practices? |
A: This amendment will not change Autodesk’s equity grant practices. Autodesk will continue to keep annual grants within the "gross burn rate” (as defined below) limit approved by the Board, which is currently not to exceed 4% of outstanding shares of Common Stock (excluding shares issued in corporate acquisitions and shares issued to newly appointed senior executives). | | Q: | What are Autodesk’s equity grant levels? |
A: The Board is committed to maintaining a reasonable annual equity grant rate. We measure the level of equity grants by comparing the total number of shares subject to equity awards granted during the fiscal year to the total weighted-average number of shares outstanding during the period (the “gross burn rate”). This formula adjusts for the fungible nature of our full value shares (where each restricted stock unit or performance stock unit granted is counted as 1.79 shares), but does not take into account that there are also shares forfeited during the year and returned to the 2012 Employee Plan. For the periods mentioned below, our gross burn rate has been: | | | | | | | | | | | | | | | | | Nine months ended | | Fiscal year ended | | October 31, 2013 | | 2013 | | 2012 | | 2011 | | 2010 | Gross Burn Rate | 2 | % | | 3 | % | | 4 | % | | 3 | % | | 4 | % |
| | Q: | What is Autodesk’s overhang? |
A: Autodesk is committed to maintaining a reasonable equity overhang amount. For the periods mentioned below, our overhang has been:
Special Meeting Proxy Statement 5
| | | | | | | | | | | | | | | | | Period Ended | | Total Options Issued and Outstanding (in millions) | | Total Restricted Stock and Restricted Stock Units Issued and Unreleased (in millions) | | Total Performance Stock Units (at Target) Issued and Unreleased (in millions) | | Shares Available for Grant | | Autodesk Overhang | Nine Months Ended October 31, 2013 | | 9.9 |
| | 5.7 |
| | 0.8 |
| | 9.3 |
| | 11 | % | Fiscal Year Ended January 31, 2013 | | 19.0 |
| | 4.5 |
| | 0.5 |
| | 11.6 |
| | 14 | % |
Autodesk calculates "overhang" based on the following methodology: The impact of (1) outstanding employee equity awards, plus shares available for grant under our active employee equity incentive plans, as a percentage of (2) outstanding employee equity awards, plus shares available for grant under our active employee equity incentive plans, plus the weighted-average number of shares of our Common Stock outstanding during the period. As discussed below, our stock repurchase program affects overhang. | | Q: | What will Autodesk's overhang be if the amendment to the 2012 Employee Plan is approved? |
A: If the requested increase in shares is approved by our stockholders, our equity overhang (as defined above and based on the requested share reserve increase, the outstanding equity awards, shares available for grant under our active employee equity incentive plans, and shares of Common Stock outstanding as of October 31, 2013) will increase to 13.3%. Autodesk is very conscious of the need to balance dilution against our ability to use stock to effectively attract, retain and motivate employees. Q:What is the impact of Autodesk’s stock repurchase program on overhang? A: The Board continues to maintain a policy of repurchasing stock to offset dilution from the issuance of stock under our employee stock plans and reduce shares over time as facts and circumstances warrant. Since the stock repurchase program decreases the number of outstanding shares, it has the effect of increasing overhang, assuming a constant number of stock equity grants. Nonetheless, the Board has reiterated its commitment to continue to repurchase shares to offset dilution from the issuance of stock under our employee stock plans and reduce shares over time as facts and circumstances warrant. In recent fiscal years, the following number of shares were repurchased: | | | | | | | | | | | | Fiscal year ended January 31, | (in millions) | 2013 | | 2012 | | 2011 | | 2010 | | 2009 | Shares Repurchased | 12.5 | | 9.7 | | 9.0 | | 2.7 | | 8.0 |
In addition, Autodesk repurchased 8.3 million shares of Common Stock in the nine months ended October, 31, 2013. As of October 31, 2013, 24.0 million shares of Common Stock remained available for repurchase under the Board authorized stock repurchase program.
Stockholder Proposals and Director Nominations at Future Meetings
Q:Q: | What is the deadline to propose actions for consideration at the 2012 annual meeting of stockholders or to nominate individuals to serve as directors? |
A: | You may submit proposals, including director nominations, for consideration at future stockholder meetings. |
Requirements for stockholder proposalsconsideration at the 2014 Annual Meeting of Stockholders or to be considered for inclusion in Autodesk’s proxy material—nominate individuals to serve as directors?
A: Stockholders may present proper proposals for inclusion in Autodesk’sAutodesk's proxy statement and for consideration at the next annual meeting2014 Annual Meeting of its stockholdersStockholders by submitting their proposals in writing to Autodesk’sAutodesk's General Counsel in a timely manner. In order to be included in the proxy statement for the 2012 annual meeting2014 Annual Meeting of stockholders, stockholderStockholders, proposals must be received by Autodesk’sAutodesk's General Counsel no later than January 4, 2012,December 30, 2013, and must otherwise comply with the requirements of Rule 14a-8 of the Securities Exchange Act of 1934 as amended (the “Exchange Act”).Requirements for stockholder proposals to be brought before an annual meeting—
In addition, Autodesk’sAutodesk's Bylaws establish an advance notice procedure for stockholders who wish to present certain matters before an annual meeting of stockholders. In general, nominations for the election of directors may be made (1) by or at the direction of the Board, of Directors, or (2) by any stockholder entitled to vote who has timely delivered written notice to Autodesk’sAutodesk's General Counsel
Special Meeting Proxy Statement 6
during the Notice Period (as defined below) , which. Any such notice must contain specified information concerning the nomineesnominee(s) and concerning the stockholder proposing such nominations.The Company’snomination(s).
Autodesk's Bylaws also provide that the only business that may be conducted at an annual meeting is business that is brought (1) pursuant to the notice of meeting (or any supplement thereto), (2) by or at the direction of the Board, of Directors, or (3) by a stockholder who has timely delivered written notice which setssetting forth all information required by Autodesk’sAutodesk's Bylaws to theAutodesk's General Counsel of Autodesk during the Notice Period (as defined below). The
For the purposes described above, the “Notice Period” is defined as the period commencing on the datebegins 75 days prior tobefore the one yearone-year anniversary of the date on which Autodesk first mailed its proxy materials to stockholders for the previous year’syear's annual meeting of stockholders, and terminating on the date 45 days prior to the one year anniversary of the date on which Autodesk first mailed its proxy materials to stockholderslasts for the previous year’s annual meeting of stockholders.30 days. As a result, the Notice Period for the 2012 annual meeting2014 Annual Meeting of stockholdersStockholders will be from February 18, 201213, 2014 to March 19, 2012.15, 2014.
If a stockholder who has notified Autodesk of his or heran intention to present a proposal at an annual meeting does not appear to present his or herthat proposal, at such meeting, Autodesk need not present the proposal for vote at such meeting.
Q: How may I obtain a copy of the bylaw provisions regarding stockholder proposals and director nominations? Q: | How may I obtain a copy of the bylaw provisions regarding stockholder proposals and director nominations? |
A: | A copy of the full text of the bylaw provisions discussed above may be obtained by writing to the General Counsel of Autodesk, or may be found atwww.autodesk.com under “Investors—Corporate Governance.”
|
| All notices of proposals by stockholders, whether or not included in Autodesk’s proxy materials, should be sent to Autodesk, Inc., 111 McInnis Parkway, San Rafael, California 94903, Attention: General Counsel. |
A:You can obtain a copy of the full text of the bylaw provisions discussed above by writing to the General Counsel of Autodesk or from www.autodesk.com under “Investor Relations-Corporate Governance.” All notices of proposals by stockholders should be sent to Autodesk, Inc., 111 McInnis Parkway, San Rafael, California 94903, Attention: General Counsel.
Additional Information About the Proxy Materials
Q: What should I do if I receive more than one set of proxy materials?
A: You may receive more than one set of voting materials, including multiple copies of this Proxy Statement and multiple proxy cards, voting instruction cards or Notices. For example, if you hold your shares in more than one brokerage account, you may receive a separate voting instruction card for each account. If you are a stockholder of record and your shares are registered in more than one name, you may receive more than one proxy card. Please complete, sign, date and return each proxy card or voting instruction card that you receive to ensure that all your shares are voted.
Q: How may I obtain a separate Notice or a separate set of proxy materials? Q: | What should I do if I receive more than one set of proxy materials? |
A: | You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards, or Notices. For example, if you hold your shares in more than one brokerage account, you may receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a stockholder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each Autodesk proxy card or voting instruction card that you receive to ensure that all your shares are voted. |
Q: | How may I obtain a separate Notice or a separate set of proxy materials? |
A: | If you share an address with another stockholder, each stockholder may not receive a separate Notice or a separate copy of the proxy materials. |
A: If you share an address with another stockholder, you may not each receive a separate Notice or a separate copy of the proxy materials.
Stockholders who do not receive a separate Notice or a separate copy of the proxy materials may request to receive a separate Notice or a separate copy of the proxy materialstheir own documents by calling (415) 507-6705 or by sending an email toinvestor.relations@autodesk.com.Alternatively,investor.relations@autodesk.com. Similarly, stockholders who share an address and receive multiple Notices or multiple copies of our proxy materials can request to receive a single copy by following the instructions above.
Q: What is the mailing address for Autodesk’s principal executive offices? Q: | What is the mailing address for Autodesk’s principal executive offices? |
A: | Autodesk’s principal executive offices are located at 111 McInnis Parkway, San Rafael, California 94903. |
A:Autodesk’s principal executive offices are located at 111 McInnis Parkway, San Rafael, California 94903. Any written requests for additional information, additional copies of the proxy materials, notices of stockholder proposals, recommendations for candidates to the Board, of Directors, communications to the Board of Directors or any other communications should be sent to this address.
Our internetInternet address iswww.autodesk.com. The information posted on our website is not incorporated into this proxy statement.Proxy Statement.
Special Meeting Proxy Statement 7
Important Notice Regarding the Availability of Proxy Materials for the StockholdersStockholder Meeting to be held on January 6, 201214, 2014
The proxy statementProxy Statement is available at:
https://materials.proxyvote.com/052769
PROPOSAL ONE1 - APPROVAL OF THE 2012 EMPLOYEE STOCK PLAN At the Special Meeting, the stockholders will be asked to approve the Autodesk, Inc. 2012 Employee Stock Plan (the “2012 Employee Plan”). The 2012 Employee Plan was adopted by the Board of Directors on November 7, 2011 and, subject to stockholder approval, will become effective on January 6, 2012.
The 2012 Employee Plan will include a “fungible share design” feature whereby each share of Common Stock subject to an incentive stock option or nonqualified stock option will be counted against the shares authorized for issuance under the 2012 Employee Plan as one share, and each share subject to an award of restricted stock or restricted stock units will be counted against the shares authorized for issuance under the 2012 Employee Plan as 1.79 shares. This feature will assist us in achieving our goal of having compensation programs that are both flexible and reflect current best practices.
If stockholders approve the 2012 Employee Plan, the maximum aggregate number of shares of Common Stock which may be issued under the 2012 Employee Plan will be 6,700,000 shares, plus that number of shares remaining for issuance under the existing 2008 Employee Stock Plan, as amended and restated (the “2008 Amended Plan”) as of January 6, 2012, not to exceed 8,500,000 shares, plus that number of shares that are subject to equity awards granted under all of our active and expired or terminated employee equity compensation plans which are outstanding as of January 6, 2012, not to exceed 6,000,000 shares, and thereafter terminate, expire, lapse or are forfeited for any reason and which following the termination, expiration, lapse or forfeiture of such awards do not again become available for issuance under such plans, with the maximum aggregate total of shares of Common Stock which may be issued under the 2012 Employee Plan not to exceed 21,200,000 shares. Upon approval of the 2012 Employee Plan, no further equity awards may be granted under the 2008 Amended Plan.
As of October 31, 2011, there were 9,362,277 shares remaining for future grant under the 2008 Amended Plan and 2,601,181 shares remaining for future grant under the 2010 Director Plan, which were the only two active equity compensation plans under which we were able to grant awards at that date. In addition, at October 31, 2011, there were a total of 30,129,856 options outstanding with a weighted average exercise price of $31.42 and weighted-average contractual life of 4.1 years under all of our active and expired or terminated equity compensation plans. There were a total of 2,104,469 unvested restricted stock units outstanding under all of our active and expired or terminated employee equity compensation plans and 16,049 unvested shares of restricted stock outstanding under all of our active and expired or terminated directors’ equity compensation plans.
Approval of the 2012 Employee Plan requires the affirmative vote of the holders of a majority of the shares of the Company’s Common Stock that are present in person or by proxy and entitled to vote at the Special Meeting. If stockholders do not approve the 2012 Employee Plan, Autodesk’s ability to include equity compensation as part of our employees’ total compensation package will be limited following the granting of the remaining shares under the 2008 Amended Plan as it currently stands. Our executive officers have an interest in this proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL OFAMENDMENT TO THE 2012 EMPLOYEE PLAN.
PLAN
We provide equity compensation to our employees as an incentive to increase long-term stockholder value. Our equity program is broad-based in that all employees, where legally allowed, are eligible to receive stock grants. Through the first three quarters of fiscal 2014, approximately 40% of our eligible employees received an equity award grant.
The purposes of the 2012 Employee Plan are to attract and retain the best available personnel for positions of substantial responsibility, provide additional incentive to our employees and promote the success of our business. We believe that equity awards should be a key part of employee compensation, that equity awards promote employee attention to the importance of running the business with a focus on revenue growth and profitabilitydrivers of stockholder value, and that equity awards enable us to compete effectively for the best talent in the software industry.
We are asking you to approve the amendment to the 2012 Employee Plan to increase the number of shares reserved for issuance under the 2012 Employee Plan by 6,350,000 shares and add new performance goals as described in the "Performance Goals" section of this proposal. As further described below, we are seeking your approval so that we can continue to use the 2012 Employee Plan to achieve Autodesk’s employee performance, recruiting and retention goals. The Board adopted, subject to stockholder approval, the amendment to the 2012 Employee Plan on November 15, 2013. In its determination to approve the requested share increase amount, the Board considered: (1) projected future equity needs based on past equity grant practices, (2) advice from an independent compensation consultant and (3) our objective to manage our burn rate so that we stay within our Board-established burn rate limit and guidelines published by a major stockholder advisory group. See "Stock Subject to the 2012 Employee Plan" in this proposal for more information relating to the maximum amount of stock subject to the 2012 Employee Plan.
Based on the number of awards granted in each of fiscal 2013 and 2014, we believe that unless stockholders approve this amendment to the 2012 Employee Plan, shares to grant under the 2012 Employee Plan will be depleted by the middle of fiscal 2015. If we run out of shares under the 2012 Employee Plan, it will severely diminish the viability of this critical employee incentive compensation program. For example, we will no longer be able to use equity awards to attract key talent or reward and retain our critical employees. We are asking stockholders to approve the amendment to the 2012 Employee Plan so that Autodesk can continue to achieve Autodesk’sits employee performance, recruiting, retention and incentive goals. Significant changes inWe anticipate that if the equity compensation practices of high-technology companies, particularly our peers, make approvingamendment to the 2012 Employee Plan particularly importantis approved, we will have sufficient shares to grant equity awards into the first half fiscal 2017. Autodesk has not made any changes to the number of shares subject to the 2012 Employee Plan since its adoption by stockholders in January 2012.
The amendment to the 2012 Employee Plan will allow us to continue to deduct in full for federal income tax purposes the compensation recognized by our executive officers in connection with certain awards granted under the plan. Section 162(m) of the Internal Revenue Code (the "Code") generally denies a corporate tax deduction for annual compensation exceeding $1 million paid to the chief executive officer and other “covered employees” as we look aheaddetermined under Section 162(m) and applicable guidance. However, certain types of compensation, including performance-based compensation, are able to future fiscal years.We believebe excluded from this deductibility limit. To enable compensation with respect to awards granted under the amended 2012 Employee Plan to qualify as “performance based” within the meaning of Section 162(m), the plan limits the size of each type of award as further described below. While the amended 2012 Employee Plan will permit the grant of awards that our current equitycan qualify as “performance-based compensation” under Section 162(m), the Compensation Committee may determine not to do so in its discretion and will make those decisions as part of its overall executive compensation plans reflected appropriate policies atstrategy. By approving the timeamended 2012 Employee Plan, the stockholders will be approving the material terms of their adoption, but may now inhibit ourthe plan, which include, among other things, the eligibility requirements for participation in the amended 2012 Employee Plan, including the ability of the Chief Executive Officer and three most highly compensated officers (other than the Chief Financial Officer) to remain competitivereceive awards under the amended 2012 Employee Plan.
The Importance of the Proposed Increase in our compensation practices.The Benefits of Equity CompensationShares for Autodesk, our Employees and Stockholders
We strongly believe that the approval of the amendment to the 2012 Employee Plan and the ability to grant equity awards are essentialcritical to our continued success in future years.success. Equity compensation is essential to attracting and retaining talented employees and keeping employees motivated.motivated, particularly in the highly competitive technology industry. If the amendment to the 2012 Employee Plan is not
Special Meeting Proxy Statement 9
approved at the Special Meeting, it would seriously hamper our ability to attract and retain the talent we need, and therefore, could affect our success.
Equity compensation is a key component of employee compensation both at Autodesk and in our competitive labor markets, and we encourage equity ownership. Equity awards give employees the perspective of an owner with a stake in the success of Autodesk. We believe that equity awards motivate high levels of performance and provide an effective means of recognizing, rewarding and encouraging employee contributions to our success.
Furthermore, we believe that equity awards align the interests of our employees with those of our stockholders by providing an incentive to increase long-term stockholder value.value and provide an additional retention tool. As a result, Autodesk currently grants restricted stock options, with limitations,units and restrictedperformance stock units under the 2008 Amended2012 Employee Plan. The stock options generally vest over three to four years and generally must be exercised within 10 years of the date of grant. Our employees derive benefit from these stock options only after they have remained with Autodesk through the vesting date and only to the extent that the value of our Common Stock has appreciated from the time the options were granted. The 2008 Amended Plan limits the number of restricted stock units that could be granted. The restrictedand performance stock units generally vest over three years. RestrictedDuring fiscal 2013 and fiscal 2014, performance stock units aremade up at least one-half of the equity awards granted as an additional retention tool to our executive officersexecutives (all employees at or above the vice president level) and non-executive employees.are earned only if Autodesk achieves specific levels of operating performance and multi-year total shareholder return relative to a broad software index. Although this equity award practiceAutodesk has worked well for Autodeskgranted stock options to employees in past years and we will continue to have the ability to grant stock options in the past, equity compensation practices of our peers and those companies that compete with us for employees has rapidly evolved. Consequently, Autodesk’s equity plans no longer permitfuture, the Company to grant equity in a manner that adequately competes for employees and provides proper retention incentives.last time Autodesk granted stock options under the 2012 Employee Plan was October 2012. The 2012 Employee Plan allows the CompanyAutodesk the flexibility needed to adapt its equity compensation program to meet the needs of the CompanyAutodesk in the changing business environment in which the Companyit operates.
We believe that equity awards are an important competitive tool in the technology industry and are essential to recruiting and retaining the highly qualified technical and other key personnel which are key to our success.personnel. We believe that we must offer competitive compensation packages in order to attract and retain people who can keep us on a course of continued success. Although higher salaries can compensate to some extent for the lack of performance stock options or other equity awards,units and restricted stock units, we believe that over time we would be at a competitive disadvantage without the focus on success and power of retention provided by equity compensation. Continuing with an out of marketcompensation that vests over multiple years. Using a below-market equity compensation program would seriously hamper our ability to attract and retain the talent we need to develop the products and the sales and marketing strategies that will define our future success. In recent years, we have hiredour ability to offer competitive equity compensation packages was integral to hiring and retained a number ofretaining key performers who have been instrumental in achieving our current success. More broadly, our employee base, a substantial portion of whom receive equity compensation, areis motivated to achieve results that drive stockholder value. We believe our equity compensation program has been critical in attracting and retaining a highly effective work force.
Significant Historical Award Information
Policies RelatedBroad-Based Granting. Subject to local law restrictions in certain countries, all of our employees are eligible to receive equity award grants, as determined by the Board or a committee of the Board (the “Administrator”). At present, approximately 7,300 employees worldwide are eligible to receive equity incentive award grants and approximately 78% of our eligible employees worldwide hold equity incentive award grants.
Outstanding Awards and Share Pool under All Equity Incentive Plans. The 2012 Employee Plan is the only active employee equity incentive plan under which we grant incentive equity awards although we do grant equity awards to our non-employee directors under the 2012 Outside Directors' Stock Plan. Set forth below is information regarding outstanding awards and available share pool under the 2012 Employee Plan, the 2012 Outside Directors' Stock Plan and all equity incentive plans (including non-employee director and terminated stock plans) in the aggregate.
| | | | | | | | | | | | | | | | | (in millions, except otherwise noted) | | Stock options outstanding as of October 31, 2013(1)
| | Weighted average exercise price for outstanding stock options as of October 31, 2013 | | Weighted average contractual life for outstanding stock options as of October 31, 2013 (in years) | | Unreleased restricted stock units and performance stock units (at target) as of October 31, 2013
| | Available for grant as of October 31, 2013(2)(3)
| 2012 Employee Plan | | 0.1 |
| | 36.81 |
| | 8.3 |
| | 6.4 |
| | 9.3 |
| 2012 Directors Plan | | — |
| | — |
| | — |
| | 0.1 |
| | 2.2 | All equity incentive plans (including non-employee director and terminated stock plans)
| | 9.9 |
| | 32.36 |
| | 4.6 |
| | 6.5 |
| | 11.5 |
|
_____________ | | (1) | The Company did not have any Stock Appreciation Rights (“SARS”) outstanding as of October 31, 2013. |
| | (2) | Under the 2012 Employee Plan, stock-based awards are granted from a pool of available shares, with stock options counting as 1 share and full value awards (e.g., restricted stock units and performance stock units) counting as 1.79 shares. |
| | (3) | The 2012 Outside Directors' Stock Plan is the only active non-employee director equity plan although non-employee director stock options remain outstanding from a predecessor plan. Under the 2012 Outside Directors' Stock Plan, stock-based awards are granted from a pool of available shares, with stock options counting as 1 share and full value awards (e.g., restricted stock unit ) counting as 2.11 shares. |
Alignment of Named Executive Officer Interests with Stockholder Interests. Equity awards represented approximately 67% of the total compensation of our named executive officers in fiscal 2013. Our named executive officers received 11% of shares subject to awards granted during fiscal 2013.
No decisions have been made with respect to equity grants to any of our employees or named executive officers for any future years, although all are eligible for grants.
Equity Usage, Dilution and Stock Repurchase Program
Autodesk recognizes the dilutive impact of our equity plans on our stockholders and continuously strives to balance this concern with the competition for talent. In its determination to approve the amendment to the 2012 Employee Plan, our Compensation Committee reviewed analyses prepared by its independent compensation consultant, Exequity LLP (“Exequity”), which included an analysis of the burn rate and overhang metrics discussed below. Exequity was retained by the Compensation Committee in September 2013 as part of the Compensation Committee’s regular review of its independent compensation advisory consultant arrangements and replaced the Compensation Committee's prior independent compensation advisory consultant, Pay Governance LLC. If approved, the new shares added to the 2012 Employee Plan would represent approximately 2.8% of Autodesk's 224.6 million outstanding shares as of October 31, 2013. The Board believes the potential dilution to stockholders is reasonable and sustainable relative to peer and market practices. Potential dilution to stockholders is measured by the following two metrics:
Gross Burn Rate. Gross burn rate is calculated by dividing the total number of shares subject to equity awards granted during the fiscal year by the total weighted-average number of shares outstanding during the period ("CSO”). This formula adjusts for the fungible nature of our full value shares (where each RSU or PSU granted is counted as 1.79 shares), but does not take into account that there are also shares forfeited during the year and returned to the 2012 Employee Plan. The gross burn rate measure indicates the rate at which Autodesk is creating potential future stockholder dilution. We believe this limit is in line with the annual equity usage practices of our compensation peer group and gross burn rate guidelines published by a major stockholder advisory services firm. The following table shows our gross burn rate over the nine months ended October 31, 2013 and our last fiscal year, each as compared to a major shareholder advisory services firm's gross burn rate cap. | | | | | | | | | | | | | | | | | Period Ended | | Total Options Granted (in millions) | | Total Restricted Stock and Restricted Stock Units Granted (in millions) (1) | | Total Performance Stock Units Granted at Target (in millions) (1) | | Autodesk Gross Burn Rate | | Major Stockholder Advisory Services Firm Gross Burn Rate Cap | Nine Months Ended October 31, 2013 | | — |
| | 2.8 |
| | 0.5 |
| | 2 | % | | 7.3 | % | Fiscal Year Ended January 31, 2013 | | 0.1 |
| | 3.4 |
| | 0.5 |
| | 3 | % | | 7.3 | % |
_____________ | | (1) | Actual number of RSUs and PSUs granted during the fiscal year, not taking into account the 1.79 fungible share counting formula. |
Equity Overhang. The Board and executive officers have worked to maintain a reasonable equity overhang amount. The impact of (a) outstanding employee equity awards, plus shares available for grant under our active employee equity incentive plans, as a percentage of (b) outstanding employee equity awards, plus shares available for grant under our active employee equity incentive plans, plus the Company’s weighted-average number of shares outstanding during the period, which we refer to as “overhang,” provides a measure of future dilutive impact. In addition, our stock
repurchase program affects overhang as discussed below. The following table shows information regarding our overhang for the nine months ended October 31, 2013 and our last fiscal year. | | | | | | | | | | | | | | | | | Period Ended | | Total Options Issued and Outstanding (in millions) | | Total Restricted Stock and Restricted Stock Units Issued and Unreleased (in millions) | | Total Performance Stock Units (at Target) Issued and Unreleased (in millions) | | Shares Available for Grant | | Autodesk Overhang | Nine Months Ended October 31, 2013 | | 9.9 |
| | 5.7 |
| | 0.8 |
| | 9.3 |
| | 11 | % | Fiscal Year Ended January 31, 2013 | | 19.0 |
| | 4.5 |
| | 0.5 |
| | 11.6 |
| | 14 | % |
If Proposal 1 is approved by our stockholders, our equity overhang (based on the outstanding equity awards, shares available for grant under our active employee equity incentive plans, and shares of Common Stock outstanding as of October 31, 2013) will increase to 13.3%.
Stock Repurchase Program. We maintain a policy of repurchasing stock to offset dilution from the issuance of stock under our employee stock plans and reduce shares over time as facts and circumstances warrant. We repurchased approximately 12.5 million shares in fiscal 2013, 9.7 million shares in fiscal 2012, 9.0 million shares in fiscal 2011, 2.7 million shares in fiscal 2010, and 8.0 million shares in fiscal 2009. The relatively lower share repurchase in fiscal 2010 was largely due to economic conditions during that period, which resulted in lower levels of stock option exercises and dilution, although it tended to increase the overhang percentage. As of October 31, 2013, 24.0 million shares of Common Stock remained available for repurchase under the Board authorized stock repurchase program.
Equity Compensation ProgramsGovernance Practices
The Board of Directors maintains certain policies relating to our equity compensation program. TheseMost of these policies are not expressly part of the 2012 Employee Plan; however they are important to understanding the Company’sAutodesk’s use of equity compensation as part of our employees’ total compensation package.
Equity Overhang. The Board of Directors and executive officers have been committed to maintaining a reasonable equity “overhang” amount, which we define as the percentage of equity awards outstanding relative to the Company’s outstanding stock, and we believe these policies are working. Our overhang was 13% in fiscal 2007, 11% in fiscal 2008, 12% in fiscal 2009, 13% in fiscal 2010, 14% in fiscal 2011 and 14% for the first nine months of fiscal 2012. This recent increase reflects exercise prices of many stock options to be above the current fair market values of the underlying stock (such options are referred to as being “under water”), thereby reducing stock option exercises and sales, which in turn increases the overhang.Limitations on Our Annual Equity Grants. Our Board of Directors is committed to maintaining a reasonable annual equity grant rate. We have reduced the level of equity grants on a gross burn rate basis from 5.2% of Common Stock outstandingCSO in fiscal 2005 to 3.5%3.1% in fiscal 2011.2013. In addition, the Board of Directors maintains an annual equity award percentage limitation policy, which limits the number of shares underlying equity awards that we can grant under our equity compensation plans. Previously, this policy provided that the aggregate number of shares underlying equity awards granted pursuant to the predecessor plan (the Autodesk, Inc. 2008 AmendedEmployee Stock Plan, willas amended and restated) on a gross burn rate basis would not exceed 3.5% per year of our outstanding Common Stock during any given fiscal year. In fiscal 2012, the Board of Directors raised the fiscal 2012 annual equity award limit from 3.5% to 4% (which remains below the averagemedian for our compensation peer group of companies).). The Board of Directors took this action in response to the global economic slowdown, which negatively impacted our financial results and significantly depreciated our stock price. Consequently, we increased the annual equity award limit in an effort to remain competitive in our industry and retain and motivate our key employees in a difficult operating environment. Awards issued in connection with business combinations, to newly appointed senior executive officers and to non-employee directors are not included in calculating whether the 4% gross burn rate limitation has been reached.reached, which is why our gross burn rate figures described above are different from this limitation. In addition to such exclusions, each restricted stock unit or each performance stock unit granted is counted as 1.79 shares toward this limitation. TheseGross burn calculations are based on gross awards and are not net of cancellations.
Stock Repurchase Program. We maintain a stock repurchase program to, among other things, offset the dilutive impact of our equity compensation plans. Our executive officers have recommended to the Board of Directors that we maintain our policy of repurchasing shares of Common Stock to offset current or projected dilution, subject to the requirements of Delaware law and consistent with the duty of the Board of Directors to evaluate various potential uses of our cash in light of then-existing business conditions. We repurchased approximately 4.2 million shares in fiscal 2007, 12.1 million shares in fiscal 2008, 8.0 million shares in fiscal 2009, 2.7 million shares in fiscal 2010, 9.0 million shares in fiscal 2011 and 7.7 million shares in fiscal 2012 as of October 31, 2011. The relatively lower share repurchase in fiscal 2010 was largely due to economic conditions during that period, which resulted in lower levels of stock option exercises and dilution.Executive Equity Holding Program. Our directors and executive officers are encouraged to be Autodesk stockholders through participation in our stock equity plans. TheBeginning in fiscal 2013, the Board of Directors has establishedresolved to transition prior voluntary stock ownership guidelines to mandatory stock holding requirements for our directors and executive officers designed to encourage long-termand directors. The new requirement for stock ownership in Autodesk and more closely link their interests with those of our other stockholders. These guidelines provideholdings provides that, from the later of thewithin a four-year period, from the date such individual assumes such role and the date on which the guidelines were adopted, executive officers should attain an investment position in Autodesk stock equal to a fixed number of shares ranging from 15,000 to 100,000 shares, depending on the individual’s scope of responsibilities, and directors should attain an investment position in Autodesk stock of at least 5,000 shares. Subject to adoption of the 2012 Outside Directors’ Plan, the guideline will be modified such that directors should attain an investment position in Autodesk stock of at least 10,000 shares. The Board of Directors reviews progress against these guidelines and requirements annually and updates them as appropriate. See “Executive Compensation—Compensation Compensation-Compensation Discussion and Analysis” below for additional information regarding the Company’sAutodesk’s voluntary stock ownership guidelines.
No In-the-Money Stock Options. Stock options may not be granted with an exercise or base price less than the fair market value, generally the closing price, of our Common Stock on the date of grant.
Prohibition Against Stock Option Repricings. By prohibiting the repricing of stock options under all of the Company’sAutodesk’s equity plans, including the 2012 Employee Plan, and the 2012 Directors’ Plan, the Board of Directors has eliminated the possibility of achieving gain from stock options unless all stockholders can benefit from the effect of an increase in stock price.
Section 162(m) Qualification.The 2012 Employee Plan is designed to allow Autodesk to grant awards that may be intended to qualify as performance-based compensation under Section 162(m) of the Code, including equity awards and incentive cash bonuses. When making decisions about the amount and form of compensation paid, we consider all elements of the cost to us of providing such compensation, including the potential impact of Section 162(m). The Compensation Committee may, in its judgment, authorize awards under the 2012 Employee Plan that do not comply with an exemption from the deductibility limit under Section 162(m) when it believes that such payments are appropriate to attract and retain talent.
Independent Administration.The Compensation Committee, which consists of only non-employee directors, administers the 2012 Employee Plan.
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL OF THE AMENDMENT TO THE 2012 EMPLOYEE PLAN.
Description of the 2012 Employee Plan
The following paragraphs provide a summary of the principal features of the 2012 Employee Plan. This summary does not purport to be complete and is subject to, and qualified in its entirety by, the provisions of the 2012 Employee Plan, including the proposed amendment, which is attached hereto as Appendix A. The proposed amendment seeks to increase the number of shares of Common Stock available for issuance under the 2012 Employee Plan and add new performance goals under the 2012 Employee Plan for the purposes of “performance-based” compensation under Section 162(m) of the Code. Capitalized terms that are not defined have the meanings set forth in the 2012 Employee Plan.
Awards. The 2012 Employee Plan permits the grant of incentive stock options, nonqualified stock options, restricted stock, and restricted stock units (each individually, an “Award”), with time-based andand/or performance based vesting.
Stock Subject to the 2012 Employee Plan. We are asking stockholders to approve the amendment to the 2012 Employee Plan to increase the number of shares reserved for issuance under the 2012 Employee Plan by 6,350,000. If stockholders approve the 2012 Employee Plan,increase, the maximum aggregate number of shares of Common Stock which may be issued under the 2012 Employee Plan will be 6,700,000 shares, plus that number of shares remaining for issuance under the 2008 Amended Plan as of January 6, 2012, not to exceed 8,500,00021,550,000 shares, plus that number of shares that are subject to equity awards granted under all of our active and expired or terminated employee equity compensation plans which arethat were outstanding as of January 6, 2012, not to exceed 6,000,000 shares,the effective date of the 2012 Employee Plan, and thereafter terminate, expire, lapse or are forfeited for any reason, and which following the termination, expiration, lapse or forfeiture of such awards do not again become available for issuance under such plans, with theto exceed 6,000,000 shares. The maximum aggregate total of shares of Common Stock which may be issued under the amended 2012 Employee Plan would not to exceed 21,200,00027,550,000 shares. Upon approval of the 2012 Employee Plan, no further equity awards may be granted under the 2008 Amended Plan.
Each share subject to an incentive stock option or nonqualified stock option will be countedcounts against the shares authorized for issuance under the 2012 Employee Plan as one share, and each share subject to an Award of restricted stock, or restricted stock units will be countedor performance stock units count against the shares authorized for issuance under the 2012 Employee Plan as 1.79 shares. If an Award expires or becomes unexercisable for any reason, the unpurchased or forfeited shares that were subject to the Award may be returned to the 2012 Employee Plan, unless the 2012 Employee Plan has terminated, and may become available for future grant under the 2012 Employee Plan. Each share which is subject to an Award of stock options granted under the 2012 Employee Plan which is forfeited to or repurchased by Autodesk shall count as having returned one share to the total number of shares which are available for future grant or sale under the 2012 Employee Plan; whereas, each share which is subject to an Award of restricted stock, restricted stock units or restrictedperformance stock units granted under the 2012 Employee Plan which is forfeited to or repurchased by Autodesk shall count as having returned 1.79 shares to the total of number of Sharesshares which are available for future grant or sale under the 2012 Employee Plan.
Administration. The 2012 Employee Plan may be administered by the Board of Directors or a committee of the Board of Directors (the “Administrator”). Subject to the provisions of the 2012 Employee Plan, the Administrator has the authority to: (1) construe and interpret the 2012 Employee Plan and Awards granted under the 2012 Employee Plan and apply its provisions, (2) prescribe, amend or rescind rules and regulations relating to the 2012 Employee Plan, (3) select the persons to whom Awards are to be granted, (4) determine the number of shares to be made subject to each Award, (5) determine whether and to what extent Awards are to be granted, (6) determine the terms, conditions and restrictions applicable to Awards generally and to each individual Award (including the provisions of the Award agreement to be entered into between Autodesk and the participant), (7) modify or amend any outstanding Award subject to applicable legal restrictions (except that repricing of a stock option without stockholder approval is prohibited), (8) authorize any person to execute, on our behalf, any instrument required to effect the grant of an Award, (9) approve forms of Award agreement for use under the 2012 Employee Plan, (10) allow participants to satisfy withholding tax obligations by, among other things, electing to have Autodesk withhold from the shares to be issued upon exercise or vesting of an Award thatnumber of shares having a fair market value equal to the minimum amount required to be withheld, (11) determine the fair market value of our Common Stock, (12) approve the forms of agreement for use under the 2012 Employee Plan, and (13) subject to certain limitations, take any other actions deemed necessary or advisable for the administration of the 2012 Employee Plan. All decisions, interpretations and other actions of the Administrator will be final and binding on all holders of Awards and on all persons deriving their rights therefrom. The Board of Directors has currently delegated to the Compensation and Human Resources Committee authority to grant equity awards to all employees including executive officers of Autodesk.
Eligibility to Receive Awards. The 2012 Employee Plan provides that stock options, restricted stock, restricted stock units and restrictedperformance stock units may be granted only to our employees.
Term. The 2012 Employee Plan will expire on June 30, 2022.
No Repricing. The 2012 Employee Plan prohibits repricing of stock options, including by way of an exchange for Awards with a lower exercise price, a different type of Award, cash, or a combination thereof, unless stockholder approval is obtained.
Terms and Conditions of Stock Options. Each stock option granted under the 2012 Employee Plan is evidenced by a written or electronic stock option agreement between the optionee and Autodesk and is subject to the following terms and conditions: | • | |
Section 162(m) Share Limit for Stock Options. In order that stock options may qualify as “performance-based compensation” under Section 162(m) of the Code, no participant may be granted stock options to purchase more than 1,500,000 shares in any fiscal year, except that stock options to purchase up to 3,000,000 shares may be granted in a participant’s first fiscal year of service.
Exercise Price. The Administrator sets the exercise price of the shares subject to each stock option, provided that the exercise price cannot be less than 100% of the fair market value of our Common Stock on the stock option grant date. In addition, the exercise price of an incentive stock option must be at least 110% of fair market value if, on the grant date, the participant owns stock possessing more than 10% of the total combined voting power of all classes of stock of Autodesk or any of its subsidiaries (a “10% Stockholder”).
Form of Consideration. The means of payment for shares issued upon exercise of a stock option is specified in each stock option agreement. Payment may generally be made by cash, check, other shares of Autodesk’s Common Stock owned by the optionee, delivery of a properly executed notice with such other documentation as the Administrator and broker may require and the sale proceeds required to pay the exercise price or by a combination of the foregoing.
Exercise of the Stock Option. Each stock option agreement will specify the term of the stock option and the date when the stock option is to become exercisable. The 2012 Employee Plan provides that in no event may a stock option granted under the 2012 Employee Plan be exercised more than ten (10) years after the date of grant. Moreover, in the case of an incentive stock option granted to a 10% Stockholder, the term of the stock option will be for no more than five (5) years from the date of grant.
Termination of Employment. If an optionee’s employment terminates for any reason (other than death or permanent disability), all vested stock options held by such optionee under the 2012 Employee Plan expire upon the earlier of (i) such period of time as is set forth in his or her stock option agreement, which Autodesk currently sets at from three to twelve months, or (ii) the expiration date of the stock option.
Permanent Disability. If an optionee is unable to continue employment as a result of permanent and total disability (as defined in the Code), all vested stock options held by such optionee under the 2012 Employee Plan expire upon the
earlier of (i) twelve months after the date of termination of the optionee’s employment or (ii) the expiration date of the stock option.
Death. If an optionee dies while employed by us, all stock options held by such optionee under the 2012 Employee Plan expire upon the earlier of (i) twelve months after the optionee’s death or (ii) the expiration date of the Option. The executor or other legal representative of the optionee may exercise all or part of the optionee’s Option at any time before such expiration with respect to all shares subject to such Option.
ISO Limitation. If the aggregate fair market value of all shares subject to an optionee’s incentive stock option that are exercisable for the first time during any calendar year exceeds $100,000, the excess stock options will be treated as nonqualified stock options. Section 162(m) Share Limit for Stock Options. In order that stock options may qualify as “performance-based compensation” under Section 162(m) of the Code, no participant may be granted stock options to purchase more than 1,500,000 shares in any fiscal year, except that stock options to purchase up to 3,000,000 shares may be granted in a participant’s first fiscal year of service.
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| • | | Exercise Price. The Administrator sets the exercise price of the shares subject to each stock option, provided that the exercise price cannot be less than 100% of the fair market value of our Common Stock on the stock option grant date. In addition, the exercise price of an incentive stock option must be at least 110% of fair market value if, on the grant date, the participant owns stock possessing more than 10% of the total combined voting power of all classes of stock of Autodesk or any of its subsidiaries (a “10% Stockholder”).
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| • | | Form of Consideration. The means of payment for shares issued upon exercise of a stock option is specified in each stock option agreement. Payment may generally be made by cash, check, other shares of Autodesk’s Common Stock owned by the optionee, delivery of a properly executed notice with such other documentation as the Administrator and broker may require and the sale proceeds required to pay the exercise price or by a combination of the foregoing.
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| • | | Exercise of the Stock Option. Each stock option agreement will specify the term of the stock option and the date when the stock option is to become exercisable. The 2012 Employee Plan provides that in no event may a stock option granted under the 2012 Employee Plan be exercised more than ten (10) years after the date of grant. Moreover, in the case of an incentive stock option granted to a 10% Stockholder, the term of the stock option will be for no more than five (5) years from the date of grant.
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| • | | Termination of Employment. If an optionee’s employment terminates for any reason (other than death or permanent disability), all vested stock options held by such optionee under the 2012 Employee Plan expire upon the earlier of (i) such period of time as is set forth in his or her stock option agreement, which Autodesk currently sets at from three to twelve months, or (ii) the expiration date of the stock option.
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| • | | Permanent Disability. If an optionee is unable to continue employment as a result of permanent and total disability (as defined in the Code), all vested stock options held by such optionee under the 2012 Employee Plan expire upon the earlier of (i) twelve months after the date of termination of the optionee’s employment or (ii) the expiration date of the stock option.
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| • | | Death. If an optionee dies while employed by us, all stock options held by such optionee under the 2012 Employee Plan expire upon the earlier of (i) twelve months after the optionee’s death or (ii) the expiration date of the Option. The executor or other legal representative of the optionee may exercise all or part of the optionee’s Option at any time before such expiration with respect to all shares subject to such Option.
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| • | | ISO Limitation. If the aggregate fair market value of all shares subject to an optionee’s incentive stock option that are exercisable for the first time during any calendar year exceeds $100,000, the excess stock options will be treated as nonqualified stock options.
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Term and Conditions of Restricted Stock. Each Award of restricted stock granted under the 2012 Employee Plan is evidenced by a written or electronic restricted stock agreement between the participant and Autodesk and is subject to the following terms and conditions: | • | |
Section 162(m) Share Limit for Restricted Stock. In order that Awards of restricted stock may qualify as “performance-based compensation” under Section 162(m) of the Code, no participant may be granted more than 750,000 shares of restricted stock (and/or restricted stock units) in any fiscal year, except that up to 1,500,000 shares of restricted stock (and/or restricted stock units) may be granted in a participant’s first fiscal year of service.
Vesting and Other Restrictions.Section 162(m) Share Limit for Restricted Stock. In order that Awards of restricted stock may qualify as “performance-based compensation” under Section 162(m) of the Code, no participant may be granted more than 750,000 shares of restricted stock (and/or restricted stock units) in any fiscal year, except that up to 1,500,000 shares of restricted stock (and/or restricted stock units) may be granted in a participant’s first fiscal year of service. |
| • | | Vesting and Other Restrictions. In determining whether an Award of restricted stock should be made, and/or the vesting schedule for any such Award, the Administrator may impose whatever conditions to vesting it determines to be appropriate. Notwithstanding the foregoing, if the Administrator desires that the Award qualify as “performance-based compensation” under Section 162(m) of the Code, any restrictions will be based on a specified list of performance goals (see “Performance Goals” below for more information). The performance goals may be applied on a company-wide, business unit, industry group or individual basis, as deemed appropriate in light of the participant’s specific responsibilities. Such performance goals may also be applied to awards which are not intended to comply with Section 162(m) of the Code.
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| • | | Stockholder Rights. A holder of restricted stock will have the full voting rights of a holder of Common Stock, unless determined otherwise by the Administrator. A holder of restricted stock also generally will be entitled to receive all dividends and other distributions paid with respect to shares of Common Stock unless otherwise provided in the Award agreement; provided, however, that dividends and distributions generally will be subject to the same vesting criteria as the shares of restricted stock upon which the dividend or distribution was paid.
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Term and Conditions of Restricted Stock Units. Each Award of restricted stock units grantedshould be made, and/or the vesting schedule for any such Award, the Administrator may impose whatever conditions to vesting it determines to be appropriate. Notwithstanding the foregoing, if the Administrator desires that the Award qualify as “performance-based compensation” under Section 162(m) of the 2012 Employee Plan is evidenced byCode, any restrictions will be based on a writtenspecified list of performance goals (see “Performance Goals” below for more information). The performance goals may be applied on a company-wide, business unit, industry group or electronicindividual basis, as deemed appropriate in light of the participant’s specific responsibilities. Such performance goals may also be applied to awards which are not intended to comply with Section 162(m) of the Code.
Stockholder Rights. A holder of restricted stock unit agreement betweenwill have the participantfull voting rights of a holder of Common Stock, unless determined otherwise by the Administrator. A holder of restricted stock also generally will be entitled to receive all dividends and Autodeskother distributions paid with respect to shares of Common Stock unless otherwise provided in the Award agreement; provided, however, that dividends and isdistributions generally will be subject to the following terms and conditions:same vesting criteria as the shares of restricted stock upon which the dividend or distribution was paid. | • | |
Section 162(m) Share Limit for Restricted Stock Units. In order that Awards of restricted stock units may qualify as “performance-based compensation” under Section 162(m) of the Code, no participant may be granted more than 750,000 restricted stock units (and/or shares of restricted stock) in any fiscal year, except that up to 1,500,000 restricted stock units (and/or shares of restricted stock) may be granted in a participant’s first fiscal year of service.
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| • | | Vesting and Other Restrictions. Restricted stock units are Awards that result in a payment to a participant (in the form of cash, shares of Common Stock of equal value, or a combination of the two, as determined by the Administrator) only if performance goals and/or other vesting criteria established by the Administrator are achieved or the Awards otherwise vest. The applicable performance goals (which may be solely continued employment) will be determined by the Administrator, and may be applied on a company-wide, business unit, industry group or individual basis, as deemed appropriate in light of the participant’s specific responsibilities. If the Administrator desires that the Award qualify as “performance-based compensation” under Section 162(m) of the Code, the vesting criteria will be
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| based on a specified list of performance goals (see “Performance Goals” below for more information). Such performance goals may also be applied to awards which are not intended to comply with Section 162(m) of the Code.
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Performance Goals. The Administrator (in its discretion) may make performance goals applicable to a participant with respect to an Award. AtAs provided under the current 2012 Employee Plan, at the Administrator’s discretion, performance goals with respect to awards intended to qualify as “performance-based compensation” under Section 162(m) of the Code may be based on one or more of the following performance goals may apply:business criteria: Earnings per share Net income Operating margins Revenue Total stockholder return Each
In part as a consequence of thesesignificant changes to Autodesk's business model, including a shift in business focus to recurring revenue, announced at Autodesk's Investor Day in October 2013, we are asking, as part of this proposal, that our stockholders approve the addition of the following measures on which to base future performance goals:
•recurring revenue (including annualized) •bookings
•billings •number of customers •objective customer indicators •expenses •cost reduction goals is defined in the 2012 Employee Plan. •economic value added •cash flow (including operating cash flow or free cash flow) •cash flow per share •sales or revenue targets, including product or product family targets Any criteria used may be measured, as applicable (1) on a pro forma basis (as defined in the 2012 Employee Plan), (2) in absolute terms, (3) in relative terms (including, but not limited to, the passage of time and/or against another company or companies or financial metrics), (4) on a per-share and/or share per capita basis, (5) against the performance of the CompanyAutodesk as a whole or particular segments, business units, industry groups or products of the Company,Autodesk, and/or (6) on a pre-tax or after-tax basis.
By granting Awards that vest upon achievement of performance goals,business objectives, the Administrator may be able to preserve the Company’sAutodesk’s deduction for certain compensation in excess of $1,000,000. Section 162(m) of the Code limits the Company’sAutodesk’s ability to deduct annual compensation paid to our Chief Executive Officer and other “covered employees” as determined under Section 162(m) of the Code and applicable guidance to $1,000,000 per individual. However, the CompanyAutodesk can preserve the deductibility of certain compensation in excess of $1,000,000 if the conditions of Section 162(m) of the Code are met. These conditions include stockholder approval of the 2012 Employee Plan, setting limits on the number of Awards that any individual may receive, and for Awards other than stock options, establishing performance criteria that must be met before the Award actually will vest or be paid. The performance goals listed above, as well as the per person limits on shares covered by Awards, permit the Administrator to grant Awards that qualify as performance-based for purposes of satisfying the conditions of Section 162(m) of the Code, thereby permitting the CompanyAutodesk to receive a federal income tax deduction in connection with such Awards. The Administrator has the ability to grant awards that do not satisfy the conditions of Section 162(m) and may do so when, in its judgment, it is appropriate to attract and retain talent.
Leave of Absence. In the event that an employee goes on a leave of absence approved by the Administrator, Award vesting will continue during such leave, except as required by law or as otherwise determined by the Administrator.
Non-Transferability of Awards. Unless otherwise determined by the Administrator, an Award granted under the 2012 Employee Plan 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 recipient, only by the recipient. If the Administrator makes an Award transferable, such Award will contain such additional terms and conditions as the Administrator deems appropriate; provided, however, that such Award may not be transferred for value.
Adjustments Upon Changes in Capitalization. In the event that our capital stock is changed by reason of any stock split, reverse stock split, stock dividend, combination or reclassification of our Common Stock or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by us, appropriate proportional adjustments will be made in the number of shares subject to the 2012 Employee Plan, the individual fiscal year limits applicable to Awards, the number of shares of stock subject to any Award outstanding under the 2012 Employee Plan, and the exercise price of any such outstanding option. Any such adjustment will be made by the Administrator, whose determination will be conclusive.
Dissolution or Liquidation. In the event of a proposed dissolution or liquidation of Autodesk, the Administrator is required to provide notice to each participant as soon as practicable prior to the effective date of such proposed transaction. The Administrator in its discretion may permit a participant to exercise his or her Award until ten (10) days prior to such transaction as to all of the shares covered by an Award. In addition, the Administrator may provide that any Company repurchase option or forfeiture rights applicable to any Award will lapse in full, and that any Award vesting will fully accelerate, 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 Award will terminate immediately prior to the consummation of such proposed action.
Change of Control. In the event of a change of control, the successor corporation (or its parent or subsidiary) is required to assume or substitute each outstanding Award. If the successor corporation refuses to assume the Awards or to substitute equivalent Awards, such stock options, restricted stock and restricted stock units, will become 100% vested, all restrictions on restricted stock will lapse, and all performance goals or other vesting criteria with respect to Awards with performance-based vesting will be deemed achieved at 100% target levels and all other terms and conditions met. In such event, the Administrator is required to provide notice to the participant that each stock option subject to exercise is fully exercisable for fifteen days from the date of such notice and that the stock option terminates upon expiration of such period.
Amendment, Suspensions and Termination of the 2012 Employee Plan. Autodesk’s Board of Directors may at any time amend, alter, suspend or terminate the 2012 Employee Plan; provided, however, to the extent necessary and desirable to comply with any Applicable Law, the CompanyAutodesk shall obtain stockholder approval of any amendment in such a manner and to such a degree as required. In addition, as noted above under the section entitled “No Repricing,” stock options may not be repriced unless stockholder approval is
The number of Awards (if any) that an employee may receive under the 2012 Employee Plan is in the discretion of the Administrator and therefore cannot be determined in advance. The number of equity awards granted to each of our named executive officers during the last fiscal year is set forth below under “Grants of Plan-Based Awards in Fiscal 2013.” In addition, the number of equity awards granted to each of our named executive officers during fiscal 2014 is set forth in "Fiscal 2014 Equity Awards: New PSU Plan" below under “Compensation Discussion and Analysis.” The number of equity awards granted in the future may be different from the numbers granted in fiscal 2013 and fiscal 2014. Non-employee directors are not eligible to participate in the 2012 Employee Plan. During fiscal 2013, non-named executive officer employees as a group were granted 3.5 million shares subject to restricted stock units and performance stock units (at target), with an aggregate grant date fair value of $118.6 million, and 0.1 million shares subject to stock options with an aggregate grant date fair value of $5.1 million. The closing price for shares of Common Stock on October 31, 2013 was $39.90.
Options Granted to Certain Persons
The aggregate number of shares of Common Stock subject to options granted to our named executive officers and the other individuals and groups indicated under the 2012 Employee Plan since its inception through October 31, 2013 is reflected in the table below. | | | | | Name and Position | | Stock Options Granted | Carl Bass President and Chief Executive Officer | | — |
| Mark J. Hawkins, Executive Vice President and Chief Financial Officer | | — |
| Jan Becker Senior Vice President, Human Resources and Corporate Real Estate | | — |
| Steven M. Blum Senior Vice President, Worldwide Sales and Services | | — |
| Pascal W. Di Fronzo Senior Vice President, General Counsel and Secretary | | — |
| Amar Hanspal Senior Vice President, Information Modeling and Platform | | — |
| Robert Kross Senior Vice President, Design, Lifecycle and Simulation | | — |
| Current Named Executive Officer Group (including named executive officers list above) | | — |
| Non- Executive Director Group | | — |
| Current and Former Employee Group other than Current Named Executive Officer Group | | 140,700 |
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Our executive officers have an interest in this proposalProposal 1 because they are eligible to receive Awards under the 2012 Employee Plan. Non-employee directors are not eligible to participate in the 2012 Employee Plan.
Equity Compensation Plan Information
The following table sets forth (a)summarizes the total number of shares subjectoutstanding options granted to stock optionsemployees and restricted stock units granteddirectors, as well as the number of securities remaining available for future issuance under the 2008 Amended Plan to the listed persons and groups from February 1, 2011 through Octoberthese plans as of January 31, 2011, (b) the weighted average per share exercise price of such stock options and (c) the dollar value of such restricted stock units. The last reported trade price for shares of Common Stock on October 31, 2011 was $34.60. | | | | | | | | | | | | | | | | | Name of Individual or Group | | Number of Securities Underlying Options Granted | | | Weighted Average Per Share Exercise Price(s) | | | Number of Securities Underlying Restricted Stock Units Granted | | | Dollar Value of Restricted Stock Units Granted | | | | | | | Carl Bass, | | | 300,000 | | | $ | 43.81 | | | | 200,000 | | | $ | 8,762,000 | | Chief Executive Officer and President | | | | | | | | | | | | | | | | | | | | | | Mark J. Hawkins, | | | 27,500 | | | | 43.81 | | | | 41,385 | | | | 1,506,894 | | Executive Vice President and Chief Financial Officer | | | | | | | | | | | | | | | | | | | | | | Jay Bhatt, | | | 27,500 | | | | 43.81 | | | | 39,836 | | | | 1,440,215 | | Senior Vice President, Architecture, Engineering and Construction | | | | | | | | | | | | | | | | | | | | | | George M. Bado, | | | — | | | | — | | | | — | | | | — | | Former Executive Vice President, Sales and Services (1) | | | | | | | | | | | | | | | | | | | | | | Pascal W. Di Fronzo, | | | 27,500 | | | | 43.81 | | | | 33,750 | | | | 1,173,588 | | Senior Vice President, General Counsel and Secretary | | | | | | | | | | | | | | | | | | | | | | All executive officers, as a group (11 individuals) | | | 595,218 | | | | 43.81 | | | | 562,444 | | | | 21,590,672 | | | | | | | All employees who are not executive officers, as a group | | | 4,406,341 | | | | 40.66 | | | | 371,719 | | | | 15,134,594 | | | | | | | All non-executive directors, as a group (8 individuals) | | | — | | | | — | | | | — | | | | — | |
2013:
| | | | | | | | | | | | | (a) | | (b) | | (c) | | Plan category | Number of securities to be issued upon exercise of outstanding options | | Weighted-average exercise price of outstanding options | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (in millions) | | Equity compensation plans approved by security holders | 23.8 |
| | $ | 32.88 |
| | 50.2 |
| (1) | Equity compensation plans not approved by security holders(2) | 0.2 |
| | $ | 12.53 |
| | — |
| | Total | 24.0 |
| | $ | 32.69 |
| | 50.2 |
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____________________ (1) | On December 14, 2010, Mr. Bado announced his intention to resign as our Executive Vice President, Sales and Services. In connection with Mr. Bado’s resignation on March 31, 2011, we entered into a Separation Agreement (the “Separation Agreement”) with Mr. Bado on January 28, 2011. | (1) | Included in this amount are 36.2 million securities available for future issuance under Autodesk’s ESP Plan. |
| | (2) | Amounts correspond to Autodesk’s Nonstatutory Stock Option Plan, which was terminated by the Board of Directors in December 2004. |
The following paragraphs are a summary of the material U.S. federal income tax consequences associated with Awards granted under the 2012 Employee Plan. The summary is based on existing U.S. laws and regulations, and there can be no assurance that those laws and regulations will not change in the future. The summary does not purport to be complete and does not discuss the tax consequences upon a participant’s death, or the provisions of the income tax laws of any municipality, state or foreign country in which the participant may reside. As a result, tax consequences for any particular participant may vary based on individual circumstances.
Nonqualified Stock Options. No taxable income is recognized when a nonqualified stock option is granted to a participant. Upon exercise, the participant will recognize ordinary income in an amount equal to the excess of the fair market value of the shares of Common Stock on the exercise date over the exercise price. Any additional gain or loss recognized upon later disposition of the shares of Common Stock will be taxed as capital gain or loss. Incentive Stock Options. No taxable income is recognized when an incentive stock option is granted or exercised (except for purposes of the alternative minimum tax, in which case taxation is the same as for nonqualified stock options). If the participant exercises the option and then later sells or otherwise disposes of the shares of Common Stock more than two years after the grant date and more than one year after the exercise date, the difference between the sale price and the exercise price will be taxed as capital gain or loss. If the participant exercises the option and then later sells or otherwise disposes of the shares of Common Stock before the end of the two- or one-year holding periods described above, he or she generally will have ordinary income at the time of the sale equal to the fair market value of the shares of Common Stock on the exercise date (or the sale price, if less) minus the exercise price of the option. Any additional gain or loss will be taxed as capital gain or loss.
Restricted Stock and Restricted Stock Units. A participant generally will not have taxable income upon grant of restricted stock or restricted stock units. Instead, generally the participant will recognize ordinary income at the time of vesting equal to the fair market value of the Sharesshares on that date or the cash received minus any amount paid. For restricted stock only, a participant instead may elect to be taxed at the time of grant.
Section 409A. Section 409A of the Code provides certain requirements for non-qualified deferred compensation arrangements with respect to an individual’s deferral and distribution elections and permissible distribution events. Awards granted under the 2012 Employee Plan with a deferral feature will be subject to the requirements of Section 409A of the Code. If an award is subject to and fails to satisfy the requirements of Section 409A of the Code, the recipient of that award may recognize ordinary
income on the amounts deferred under the award, to the extent vested, which may be prior to when the compensation is actually or constructively received. Also, if an award that is subject to Section 409A fails to comply with Section 409A’s provisions, Section 409A imposes an additional 20% federal income tax on compensation recognized as ordinary income, as well as interest on such deferred compensation.
Tax Effect for the Company. The CompanyAutodesk. Autodesk generally will be entitled to a tax deduction in connection with a stock option award under the 2012 Employee Plan in an amount equal to the ordinary income realized by a participant at the time the participant recognizes such income (for example, the exercise of a nonqualified stock option). As discussed above, special rules limit the deductibility of compensation paid to our Chief Executive Officer and other “covered employees” as determined under Section 162(m) of the Code and applicable guidance. However, the 2012 Employee Plan has been designed to permit the Administrator to grant stock options and performance units that qualify as “performance-based compensation” under Section 162(m) of the Code, thereby permitting the CompanyAutodesk to receive a federal income tax deduction in connection with such awards. RestrictedTime-based restricted stock units do not vest based on the attainment of performance goals, and therefore the Company will not be permitted aour federal income tax deduction in connection with respect to grants of restricted stock units to “covered employees.”employees” will be limited.
For more information about equity compensation plans approved by our stockholders, please see “Executive Compensation—EquityCompensation-Equity Compensation Plan Information.”
PROPOSAL TWO
APPROVAL OF THE 2012 OUTSIDE DIRECTORS’ STOCK PLAN
At the special meeting, the stockholders will be asked to approve the Autodesk, Inc. 2012 Outside Directors’ Stock Plan (the “2012 Directors’ Plan”). The 2012 Directors’ Plan was adopted by the Board of Directors on November 7, 2011 and, subject to stockholder approval, will become effective on January 6, 2012.
The 2012 Directors’ Plan will include a “fungible share design” feature whereby each share subject to a stock option will be counted against the shares authorized for issuance under the 2012 Directors’ Plan as one share, and each share subject to a restricted stock award or restricted stock unit award will be counted against the shares authorized for issuance under the 2012 Directors’ Plan as 2.11 shares. This feature will assist us in achieving our goal of having compensation programs that reflect current best practices.
If the 2012 Directors’ Plan is approved, our directors will receive an initial grant of 12,400 restricted stock units, an annual grant of 8,300 restricted stock units and the ability to convert all, a portion or none of their annual cash retainer to restricted stock units paid at the rate of 120 percent of the cash dollar amount. Under the 2010 Director Plan the initial and annual grants consisted of stock options of 50,000 shares and 20,000 shares, respectively, and the ability to convert no less than 50% of their cash retainer to restricted stock.
If stockholders approve the 2012 Directors’ Plan, the number of shares of Common Stock reserved for issuance under the 2012 Directors’ Plan will be that number of shares remaining for issuance under the 2010 Director Plan as of as of January 6, 2012, not to exceed 2,600,000 shares. Upon approval of the 2012 Directors’ Plan, no further equity awards may be granted under the 2010 Director Plan.
As of October 31, 2011, there were 9,362,277 shares remaining for future grant under the 2008 Amended Plan and 2,601,181 shares remaining for future grant under the 2010 Director Plan, which were the only two active equity compensation plans under which we were able to grant awards at that date. In addition, at October 31, 2011, there were a total of 30,129,856 options outstanding with a weighted average exercise price of $31.42 and weighted-average contractual life of 4.1 years under all of our active and expired or terminated equity compensation plans. There were a total of 2,104,469 unvested restricted stock units outstanding under all of our active and expired or terminated employee equity compensation plans and 16,049 unvested shares of restricted stock outstanding under all of our active and expired or terminated directors’ equity compensation plans.
Approval of the 2012 Directors’ Plan requires the affirmative vote of the holders of a majority of the shares of the Company’s Common Stock that are present in person or by proxy and entitled to vote at the Special Meeting. The Board of Directors believes that approval of the 2012 Directors’ Plan is in the best interests of Autodesk and its stockholders to provide a competitive equity incentive program that will enable us to continue to recruit and retain the capable directors essential to our long-term success. Our directors have an interest in this proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE 2012 OUTSIDE DIRECTORS’ STOCK PLAN.
Background and Purpose
Autodesk has a well-established policy of providing equity awards as a part of compensation to non-employee members of our Board of Directors, as well as requiring directors to take at least a portion of their compensation in the form of restricted stock. The purposes of the 2012 Directors’ Plan are to attract and retain highly skilled individuals as directors of Autodesk and to encourage equity ownership by our directors (in the form of restricted stock units, as well as the previously-granted stock options and restricted stock) in order to align their interests with those of our stockholders.
Changes in laws and corporate governance practices over the last several years have narrowed the pool of qualified independent directors, making it more difficult to retain and attract qualified independent directors who possess the requisite financial and business expertise to make valuable contributions to the Board of Directors.
These changes have also increased the time commitment and responsibilities of our directors. In light of competition among companies for directors with appropriate experience, we believe that we need to continue to grant equity awards at our current levels so that we may continue to attract the best available candidates for service as non-employee directors of Autodesk and to acknowledge their increased time commitment and encourage their continued service on the Board of Directors.
The Benefits of Equity Compensation for Autodesk, our Directors and Stockholders
The 2012 Directors’ Plan will assist us in attracting and retaining highly qualified individuals to serve as independent directors of Autodesk and to provide an incentive toward increasing the value of Autodesk for its stockholders. The Board of Directors believes that attracting and retaining qualified members has become more challenging in the past few years due to recent changes in the business and regulatory environment. As noted above in the “Background and Purpose” section, these changes require public companies to have more independent directors on their boards and require their board members to make increasing time commitments. Having a competitive equity incentive program for outside directors is an important factor in recruiting and retaining the high caliber of directors essential to our success. In addition, the Board of Directors believes that equity ownership by directors is important in aligning the interests of management and our stockholders.
Policies Related to our Equity Compensation Programs
The Board of Directors maintains certain policies relating to our equity compensation program. These policies, which are described above in “Proposal One—Policies Related to our Equity Compensation Programs” and are incorporated herein by reference, are not part of the 2012 Directors’ Plan; however they are important to understanding the Company’s use of equity compensation as part of our directors’ total compensation package.
Description of the 2012 Directors’ Plan
The following paragraphs provide a summary of the principal features of the 2012 Directors’ Plan. This summary does not purport to be complete and is subject to, and qualified in its entirety by, the provisions of the 2012 Directors’ Plan, which is attached hereto as Appendix B. Capitalized terms that are not defined have the meanings set forth in the 2012 Directors’ Plan.
Awards. The 2012 Directors’ Plan permits the grant of nonqualified stock options, restricted stock, and restricted stock units (each individually, an “Award”).
Stock Subject to the 2012 Directors’ Plan. If stockholders approve the 2012 Directors’ Plan, the number of shares of Common Stock reserved for issuance under the 2012 Directors’ Plan will be that number of shares remaining for issuance under the 2010 Director Plan as of as of January 6, 2012, not to exceed 2,600,000 shares. Upon approval of the 2012 Directors’ Plan, no further equity awards may be granted under the 2010 Director Plan.
Each share subject to a nonqualified stock option will be counted against the shares authorized for issuance under the 2012 Directors’ Plan as one share, and each share subject to an Award of restricted stock or restricted stock units will be counted against the shares authorized for issuance under the 2012 Directors’ Plan as 2.11 shares. If an Award expires or becomes unexercisable for any reason, the unpurchased or forfeited shares that were subject to the Award may be returned to the 2012 Directors’ Plan, unless the 2012 Directors’ Plan has terminated, and may become available for future grant under the 2012 Directors’ Plan. Each share which is subject to an Award of restricted stock or restricted stock units granted under the 2012 Directors’ Plan which is forfeited to or repurchased by Autodesk shall count as having returned 2.11 shares to the total of number of Shares which are available for future grant or sale under the 2012 Directors’ Plan.
Administration. The 2012 Directors’ Plan will be administered by the Board of Directors (the “Administrator”). Subject to the provisions of the 2012 Directors’ Plan, the Administrator has the authority to: (1) construe and interpret the 2012 Directors’ Plan and Awards granted under the 2012 Directors’ Plan and apply its provisions, (2) prescribe, amend or rescind rules and regulations relating to the 2012 Directors’ Plan, (3) select the persons to whom Awards are to be granted, (4) determine the number of shares to be made subject to each Award, (5) determine whether and to what extent Awards are to be granted, (6) determine the terms, conditions and restrictions applicable to Awards generally and to each individual Award (including the provisions of the Award agreement to be entered into between Autodesk and the participant), (7) modify or amend any outstanding
Award subject to applicable legal restrictions (except that repricing of a stock option without stockholder approval is prohibited), (8) authorize any person to execute, on our behalf, any instrument required to effect the grant of an Award, (9) approve forms of Award agreement for use under the 2012 Directors’ Plan, (10) determine the fair market value of our Common Stock, (11) approve the forms of agreement for use under the 2012 Directors’ Plan, and (12) subject to certain limitations, take any other actions deemed necessary or advisable for the administration of the 2012 Directors’ Plan. All decisions, interpretations and other actions of the Administrator will be final and binding on all holders of Awards and on all persons deriving their rights therefrom.
Eligibility to Receive Awards. The 2012 Directors’ Plan provides that stock options, restricted stock and restricted stock units may be granted to outside directors.
Term. The 2012 Directors’ Plan will expire on June 30, 2022.
No Repricing. The 2012 Directors’ Plan prohibits repricing of stock options, including by way of an exchange for Awards with a lower exercise price, a different type of Award, cash, or a combination thereof, unless stockholder approval is obtained.
Terms and Conditions of Stock Options. Each stock option granted under the 2012 Directors’ Plan is evidenced by a written or electronic stock option agreement between the optionee and Autodesk and is subject to the following terms and conditions:
| • | | Exercise Price. The Administrator sets the exercise price of the shares subject to each stock option, provided that the exercise price cannot be less than 100% of the fair market value of our Common Stock on the stock option grant date.
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| • | | Form of Consideration. The means of payment for shares issued upon exercise of a stock option is specified in each stock option agreement. Payment may generally be made by cash, check, other shares of Autodesk’s Common Stock owned by the optionee, delivery of a properly executed notice with such other documentation as the Administrator and broker may require and the sale proceeds required to pay the exercise price or by a combination of the foregoing.
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| • | | Exercise of the Stock Option. Each stock option agreement will specify the term of the stock option and the date when the stock option is to become exercisable. The 2012 Directors’ Plan provides that in no event may a stock option granted under the 2012 Directors’ Plan be exercised more than seven (7) years after the date of grant.
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| • | | Termination of Service. If an optionee’s service as an outside director terminates for any reason (other than death or permanent disability), all vested stock options held by such optionee under the 2012 Directors’ Plan expire upon the earlier of (i) seven months (three years in the case of a qualified retirement), or (ii) the expiration date of the stock option.
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| • | | Permanent Disability. If an optionee is unable to continue service as an outside director as a result of permanent and total disability (as defined in the Code), all vested stock options held by such optionee under the 2012 Directors’ Plan expire upon the earlier of (i) twelve months after the date of termination of the optionee’s service as an outside director or (ii) the expiration date of the stock option.
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| • | | Death. If an optionee dies while serving as an outside director, all stock options held by such optionee under the 2012 Directors’ Plan expire upon the earlier of (i) twelve months after the optionee’s death or (ii) the expiration date of the Option. The executor or other legal representative of the optionee may exercise all or part of the optionee’s Option at any time before such expiration with respect to all shares subject to such Option.
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Term and Conditions of Restricted Stock. Each Award of restricted stock granted under the 2012 Directors’ Plan is evidenced by a written or electronic restricted stock agreement between the participant and Autodesk and is subject to the following terms and conditions:
| • | | Vesting and Other Restrictions. In determining whether an Award of restricted stock should be made, and/or the vesting schedule for any such Award, the Administrator may impose whatever conditions to vesting it determines to be appropriate.
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| • | | Stockholder Rights. A holder of restricted stock will have the full voting rights of a holder of Common Stock, unless determined otherwise by the Administrator. A holder of restricted stock also generally will be entitled to receive all dividends and other distributions paid with respect to shares of Common Stock unless otherwise provided in the Award agreement; provided, however, that dividends and distributions generally will be subject to the same vesting criteria as the shares of restricted stock upon which the dividend or distribution was paid.
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Term and Conditions of Restricted Stock Units. Each Award of restricted stock units granted under the 2012 Directors’ Plan is evidenced by a written or electronic restricted stock unit agreement between the participant and Autodesk and is subject to the following terms and conditions:
| • | | Vesting and Other Restrictions. Restricted stock units are Awards that result in a payment to a participant (in the form of cash, shares of Common Stock of equal value, or a combination of the two, as determined by the Administrator) only if vesting criteria established by the Administrator are achieved or the Awards otherwise vest.
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| • | | Automatic Grants.The 2012 Directors’ Plan provides for the automatic, non-discretionary grant of restricted stock units to our non-employee directors. Upon being elected or appointed to our Board of Directors for the first time, each non-employee director will be granted 12,400 restricted stock units (the “Initial Grant”). Each Initial Grant shall vest in three equal annual installments on each of the first three anniversaries of the date of grant, subject to the director continuing to serve on the Board of Directors through each vesting date. In addition, each non-employee director will be granted an additional 8,300 restricted stock units on the date of each annual meeting of stockholders (the “Annual Grant”), provided that such director has served on the Board of Directors for at least six full months prior to that date and remains a member of the Board of Directors on that date. Each Annual Grant currently shall vest on the date of the next annual meeting of stockholders, subject to the director continuing to serve on the Board of Directors through such date. The number of shares subject to Initial Grants and Annual Grants will be subject to review and revision by the Board on an annual basis.
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| • | | Retainer.Each director may elect to receive all, a portion or none of their annual cash retainer in the form of restricted stock units, provided that such election is made on or prior to December 31st of the calendar year preceding the annual meeting of stockholders when such award is made. This election will be irrevocable and will comply with Section 409A of the Internal Revenue Code of 1986, as amended, unless otherwise determined by the Board of Directors. The amount of stock compensation shall be paid at the rate of 120 percent of the cash dollar amount in the form of restricted stock units, which shall vest on the date of the next annual meeting of stockholders, subject to the director continuing to serve on the Board of Directors through such date.
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Leave of Absence. In the event that a participant goes on a leave of absence approved by the Administrator, Award vesting will continue during such leave, except as required by law or as otherwise determined by the Administrator.
Non-Transferability of Awards. Unless otherwise determined by the Administrator, an Award granted under the 2012 Directors’ Plan 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 recipient, only by the recipient. If the Administrator makes an Award transferable, such Award will contain
such additional terms and conditions as the Administrator deems appropriate; provided, however, that such Award may not be transferred for value.
Adjustments Upon Changes in Capitalization. In the event that our capital stock is changed by reason of any stock split, reverse stock split, stock dividend, combination or reclassification of our Common Stock or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by us, appropriate proportional adjustments will be made in the number of shares subject to the 2012 Directors’ Plan, the individual fiscal year limits applicable to Awards, the number of shares of stock subject to any Award outstanding under the 2012 Directors’ Plan, and the exercise price of any such outstanding option. Any such adjustment will be made by the Administrator, whose determination will be conclusive.
Dissolution or Liquidation. In the event of a proposed dissolution or liquidation of Autodesk, the Administrator is required to provide notice to each participant as soon as practicable prior to the effective date of such proposed transaction. The Administrator in its discretion may permit a participant to exercise his or her Award until ten (10) days prior to such transaction as to all of the shares covered by an Award. In addition, the Administrator may provide that any Company repurchase option or forfeiture rights applicable to any Award will lapse in full, and that any Award vesting will fully accelerate, 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 Award will terminate immediately prior to the consummation of such proposed action.
Change of Control. In the event of a change of control, the successor corporation (or its parent or subsidiary) is required to assume or substitute each outstanding Award. If the successor corporation refuses to assume the Awards or to substitute equivalent Awards, such stock options, restricted stock and restricted stock units, will become 100% vested, all restrictions on restricted stock will lapse and all other terms and conditions met. In such event, the Administrator is required to provide notice to the participant that each stock option subject to exercise is fully exercisable for fifteen days from the date of such notice and that the stock option terminates upon expiration of such period.
Amendment, Suspensions and Termination of the 2012 Directors’ Plan. Autodesk’s Board of Directors may at any time amend, alter, suspend or terminate the 2012 Directors’ Plan; provided, however, to the extent necessary and desirable to comply with any Applicable Law, the Company shall obtain stockholder approval of any amendment in such a manner and to such a degree as required. In addition, as noted above under the section entitled “No Repricing,” stock options may not be repriced unless stockholder approval is obtained.
New Plan Benefits
Each new non-employee member of the Board of Directors will receive an Initial Grant of 12,400 Restricted Stock Units on the date of the first meeting of the Board of Directors at which such person first serves as a director. Each non-employee director will receive an Annual Grant of 8,300 restricted stock units on the date of each annual meeting (provided that such director has served on the Board of Directors for at least six full months prior to that date and remains a member of the Board of Directors on that date). The number of restricted stock units to be granted under the 2012 Directors’ Plan each year with respect to Initial Grants and Annual Grants is subject to review and revision by the Board of Directors on an annual basis. In addition, the 2012 Directors’ Plan permits each director to receive all, a portion or none of their annual cash retainer in the form of restricted stock units paid at the rate of 120 percent of the cash dollar amount. While the 2012 Directors’ Plan also provides for the discretionary grant of options and restricted stock, Autodesk does not have any other current plans, proposals or arrangements to grant Awards under the 2012 Directors’ Plan. None of our executive officers are eligible to participate in the 2012 Directors’ Plan.
The following table sets forth (a) the total number of shares subject to stock options and restricted stock that were granted under the 2010 Director Plan to the listed persons and groups from February 1, 2011 through October 31, 2011, (b) the weighted average per share exercise price of such stock options and (c) the dollar value of such restricted stock. The last reported trade price for shares of Common Stock on October 31, 2011 was $34.60.
| | | | | | | | | | | | | | | | | Name of Individual or Group | | Number of Securities Underlying Options Granted | | | Weighted Average Per Share Exercise Price(s) | | | Number of Securities Underlying Restricted Stock Awards Granted | | | Dollar Value of Restricted Stock Awards Granted | | Crawford W. Beveridge | | | 20,000 | | | $ | 36.44 | | | | 2,305 | | | $ | 83,994 | | J. Hallam Dawson | | | 20,000 | | | | 36.44 | | | | 2,469 | | | | 89,970 | | Per-Kristian Halvorsen | | | 20,000 | | | | 36.44 | | | | 2,799 | | | | 101,996 | | Sean M. Maloney (1) | | | 20,000 | | | | 36.44 | | | | 2,469 | | | | 89,970 | | Mary T. McDowell | | | 20,000 | | | | 36.44 | | | | 1,234 | | | | 44,967 | | Lorrie M. Norrington | | | 50,000 | | | | 43.81 | | | | 1,234 | | | | 44,967 | | Charles J. Robel | | | 20,000 | | | | 36.44 | | | | 1,975 | | | | 71,969 | | Steven M. West | | | 20,000 | | | | 36.44 | | | | 1,564 | | | | 56,992 | | All executive officers, as a group (11 individuals) | | | — | | | | — | | | | — | | | | — | | All employees who are not executive officers, as a group | | | — | | | | — | | | | — | | | | — | |
(1) | On November 4, 2011, Mr. Maloney resigned as a member of the board of directors. On November 7, 2011, Stacy J. Smith was appointed to the board of directors and received an automatic option grant of 50,000 shares with a per share exercise price of $35.02. |
Federal Tax Aspects
The following paragraphs are a summary of the material U.S. federal income tax consequences associated with Awards granted under the 2012 Directors’ Plan. The summary is based on existing U.S. laws and regulations, and there can be no assurance that those laws and regulations will not change in the future. The summary does not purport to be complete and does not discuss the tax consequences upon a participant’s death, or the provisions of the income tax laws of any municipality, state or foreign country in which the participant may reside. As a result, tax consequences for any particular participant may vary based on individual circumstances.
Nonqualified Stock Options. No taxable income is recognized when a nonqualified stock option is granted to a participant. Upon exercise, the participant will recognize ordinary income in an amount equal to the excess of the fair market value of the shares of Common Stock on the exercise date over the exercise price. Any additional gain or loss recognized upon later disposition of the shares of Common Stock will be taxed as capital gain or loss.
Restricted Stock and Restricted Stock Units. A participant generally will not have taxable income upon grant of restricted stock or restricted stock units. Instead, the participant will recognize ordinary income at the time of vesting equal to the fair market value of the Shares on that date or the cash received minus any amount paid. For restricted stock only, a participant instead may elect to be taxed at the time of grant.
Section 409A. Section 409A of the Code provides certain requirements for non-qualified deferred compensation arrangements with respect to an individual’s deferral and distribution elections and permissible distribution events. Awards granted under the 2012 Directors’ Plan with a deferral feature will be subject to the requirements of Section 409A of the Code. If an award is subject to and fails to satisfy the requirements of Section 409A of the Code, the recipient of that award may recognize ordinary income on the amounts deferred under the award, to the extent vested, which may be prior to when the compensation is actually or constructively received. Also, if an award that is subject to Section 409A fails to comply with Section 409A’s provisions,
Section 409A imposes an additional 20% federal income tax on compensation recognized as ordinary income, as well as interest on such deferred compensation.
Tax Effect for the Company. The Company generally will be entitled to a tax deduction in connection with a stock option award under the 2012 Directors’ Plan in an amount equal to the ordinary income realized by a participant at the time the participant recognizes such income (for example, the exercise of a nonqualified stock option).
Compensation Discussion and Analysis
Because we are soliciting stockholder approval of a new employee equity compensation plan in Proposal One,1, SEC rules require us to include an “Executive Compensation” section in this proxy statement. Except for minor conforming changes, the following section is identical to the Executive Compensation section that appeared in our proxy statement for our 20112013 Annual Meeting of Stockholders held in July 2011.June 2013. At our 20112013 Annual Meeting of Stockholders, 65% of the votes cast by our stockholders approved, on a non-binding advisory basis, the compensation of the Company’sAutodesk's named executive officers as described in the proxy statement as follows: 160,985,733 votes for, 29,933,815 votes against, and 134,867 abstentions, with 13,755,476 broker non votes.statement. Following our 2013 Annual Meeting of Stockholders, at the direction of the Compensation Discussion and Analysis Compensation Objectives
OurCommittee, members of management have continued to contact Autodesk's largest stockholders to seek feedback regarding Autodesk's executive compensation objectives arepolicies in order to enhance long-term stockholder value by:
rewarding ourinform future executive officers for meeting or exceedingcompensation decisions.
This section of the Company’s strategic and financial goals, and individual performance goals; and effectively attracting, retaining and motivating high caliber executive officers who can meaningfully contribute to the success of our Company and demonstrate leadership for our employees.
These objectives guide the decisions ofProxy Statement explains how the Compensation and Human Resources Committee of the Board (the “Committee”) manages the compensation programs for Autodesk's executives. In particular, this Compensation Discussion and Analysis describes the material elements of Directors (the “Compensation Committee”) regardingthe compensation for ourawarded to, earned by, or paid to the executive officers.
In practice, we seek This section also provides an overview of Autodesk's executive compensation philosophy, program design and linkage to link compensation to performance and to the long-termstockholder interests, of our stockholders by:
ensuring that our executive team has clear goals and accountability with respect to financial and nonfinancial corporate performance;
establishing compensation opportunities that are competitive with prevailing practices for our industry, the stage of our growth, and the dynamic and challenging technology labor markets in which we operate;
assessing performance against companywide key metrics as well as individual goals;
utilizing a combinationthe current administration of plans that balance rewardsAutodesk's executive compensation programs and each underlying compensation component.
Although the discussion primarily focuses on Autodesk's compensation programs for annual and longer-term performance, mitigating potential risk-taking by any one executive; andthe fiscal year ended January 31, 2013 (“fiscal 2013”), compensation actions taken after fiscal 2013 are described to the extent they enhance the understanding of the fiscal 2013 executive compensation program. using equity incentive plans, which reward for long-term increases
The executive officers discussed in the value of our stock. Named Executive Officers
Throughout this proxy statement,Proxy Statement are called the individuals included in the Summary Compensation Table on page 46 are referred to as our “Named Executive Officers.Officers” or “NEOs.” For fiscal 2011, our2013, the Named Executive Officers were:
Carl Bass, President and Chief Executive Officer and President(“CEO”); Mark J. Hawkins, Executive Vice President and Chief Financial OfficerOfficer; George M. “Ken” Bado, former Executive Vice President, Sales and Services
Jay Bhatt,Jan Becker, Senior Vice President, Architecture, EngineeringHuman Resources and Construction Corporate Real Estate;Steven M. Blum, Senior Vice President, Worldwide Sales and Services;
Pascal W. Di Fronzo, Senior Vice President, General Counsel & Secretaryand Secretary;
Amar Hanspal, Senior Vice President, Information Modeling and Platform; and
Robert Kross, Senior Vice President, Design, Lifecycle and Simulation.
As a result of Autodesk's fiscal 2013 reorganization, Mr. Hanspal's and Mr. Kross' roles and responsibilities changed, resulting in a change in their executive officer status. Mr. Hanspal and Mr. Kross each continue to play a pivotal role at Autodesk.
Autodesk's compensation programs are designed to reward executives for producing results that are aligned with the interests of stockholders by emphasizing “at risk” compensation dependent upon prospective financial, strategic and stock price performance and a retrospective assessment of Autodesk's success to determine pay opportunities. The informationcompensation programs are a balance of performance-orientation and attraction, retention and motivation: Of the total compensation included in this discussion provides perspectivethe Summary Compensation Table for fiscal 2013, long-term incentives constituted 77% of compensation for the CEO and narrative analysis relatingan average of 60% of compensation for all the NEOs.
Executive Summary
Actions Relating to Stockholder Advisory Vote on Executive Compensation
The Board approved a policy to hold stockholder advisory votes on the compensation of the Named Executive Officers (also known as “Say-on-Pay”) at each Annual Meeting of Stockholders. At the June 2011 Annual Meeting, over 84% of the votes cast on the Say-on-Pay proposal were voted “FOR” approval of the Named Executive Officer compensation program for fiscal 2011. Continuing with its focus on instituting best practices for executive compensation, the Committee took a number of actions during fiscal 2012 aimed at evolving and should be read alongimproving Autodesk's executive compensation programs. These actions included:
Designing a Performance Stock Unit program;
Revising Autodesk's compensation peer group to more closely align with companies of Autodesk's financial size and performance; and
Special Meeting Proxy Statement 20
Mandating stock ownership for all executive officers.
At the June 2012 Annual Meeting of Stockholders, approximately 54% of the votes cast on the fiscal 2012 Say-on-Pay proposal were voted “FOR” approval of the Named Executive Officer compensation program. Following the results of the 2012 Say-on-Pay vote, at the direction of the Committee, members of management contacted Autodesk's largest stockholders, representing over 60% of the outstanding Common Stock, to understand their views and concerns about Autodesk's executive compensation policies. While the feedback varied among stockholders, the common themes expressed included a general preference to:
Use Autodesk's stock price appreciation as a metric for determining total compensation;
Incorporate multiple measures of performance in incentive plans, including:
| | ◦ | Measures that incorporate value creation outcomes, such as Total Stockholder Return (“TSR”); and |
| | ◦ | Annual financial measures that drive stockholder value creation; |
Use TSR performance against a relevant set of companies;
Use multi-year performance measurements for long-term performance awards; and
Regularly review and identify compensation peer group companies of appropriate size and pay philosophy.
After considering the stockholder feedback, the Committee expanded its review of Autodesk's executive compensation policies and practices and incorporated the feedback as part of the ongoing design of several aspects of the executive compensation tablesprograms during fiscal 2013. Principally, Autodesk implemented the following changes:
Enhanced the metrics of Performance Stock Unit awards to strengthen the link between Autodesk's financial performance and discussion contained below.On December 14, 2010, Mr. Bado announcedthe amount that may be earned from those awards by:
| | ◦ | Requiring that a portion of the awards be earned each year through the successful attainment of annual financial targets; |
| | ◦ | Linking the amounts that ultimately may be received from the awards to relative TSR; and |
| | ◦ | Adding multi-year performance periods by incorporating one-year, two-year, and three-year relative TSR measurements; and |
Further refined Autodesk's compensation peer group.
These changes enhanced the already strong compensation practices implemented by the Committee and more closely aligned the total direct compensation opportunity of the Named Executive Officers with Autodesk's objectives of driving meaningful annual financial growth and maximizing Autodesk's long-term value.
Special Meeting Proxy Statement 21
The following chart summarizes the specific actions taken by the Committee to enhance the design and alignment of Autodesk's executive compensation programs:
| | | | | | | | Date | | Action | | Description | | Outcome | March 2012 | | Adopted Performance Stock Unit awards program for executive officers | | Number of shares that are earned is based on revenue growth and non-GAAP operating margin targets measured over a one-year performance period, subject to additional multi-year, time-based vesting requirement | | Aligned target long-term incentive compensation opportunity with the key drivers of stockholder value creation Replaced stock option component of long-term incentive compensation program
| March 2012 | | Adopted mandatory stock ownership guidelines | | Compliance to be assessed annually | | Ensured executives' personal financial interests are directly aligned with those of stockholders; all executive officers are in compliance | October 2012 | | Reviewed and further refined compensation peer group based on stockholder feedback | | Used previously-established criteria to guide compensation peer group selection, leading to removal of Symantec and Yahoo! | | Companies in the compensation peer group more closely match Autodesk based on key financial criteria, such as revenue and market capitalization | March 2013 | | Awarded 60% of long-term incentive equity to CEO (and 50% for other NEOs) in a redesigned Performance Stock Unit award incorporating: - Total Stockholder Return performance relative to a broad group of companies in major software industry index - Multi-year performance periods - Continued focus on key financial drivers that create long-term stockholder value | | - Provides direct link between executive compensation and total stockholder return - Uses third-party developed and managed S&P Computer Software Select Index representing range of software industry investment choices available to stockholders - Multi-year performance periods measuring one-year, two-year, and three-year relative TSR - Focus on revenue growth and non-GAAP operating margin expansion | | Aligns design of Performance Stock Unit awards with areas identified by stockholders as being of most critical importance (specifically, TSR, multi-year performance measurement, and comparison of Autodesk performance to that of other companies) |
Alignment of Executive Compensation and Corporate Performance
Each March, the Committee makes compensation decisions for the Named Executive Officers based, in large part, on Autodesk's performance and executives' individual performance for the just-completed fiscal year. To evaluate the Committee's commitment to paying for performance, it is necessary to compare the compensation decisions taking place in one year with the performance of the prior fiscal year, as illustrated by the following table:
| | | | | | Fiscal Year | | Performance Period | | Timing of Related Committee Decisions | Fiscal 2013 | | February 1, 2012, to January 31, 2013 | | March 2013 | Fiscal 2012 | | February 1, 2011, to January 31, 2012 | | March 2012 |
As a result of this decision-making cycle, the timing of the compensation decisions is not reflected in the relevant fiscal year in the Summary Compensation Table. Generally, under SEC reporting requirements, the Committee's decisions and actions regarding the value of long-term incentive compensation appear in the Summary Compensation Table for the fiscal year following the fiscal year to which they relate.
For example, in March 2013, the Committee made decisions about the long-term incentive compensation awards for the CEO based on Autodesk's and his intention to resignindividual performance during the period from February 1, 2012, through January 31, 2013 (fiscal 2013). Since these decisions were made following the end of fiscal 2013, the amounts awarded will appear in next year's fiscal 2014 Summary Compensation Table rather than the fiscal 2013 Summary Compensation Table in this Proxy Statement.
To illustrate the correlation between the Committee's pay decisions and Autodesk performance, the chart below displays the multi-year relationship between indexed TSR of Autodesk's stock price, percentage of actual revenue and non-GAAP operating margin attainment against internal target, and the resulting changes in CEO compensation as our Executive Vice President, Sales and Services. In connection with Mr. Bado’s resignation, we entered into a Separation Agreement (the “Separation Agreement”) with Mr. Badoviewed by the Committee. The indexed TSR is calculated using the closing price of Autodesk's Common Stock on January 28, 2011. A31, 2009 as a baseline. The revenue and non-GAAP operating margin performance is against Autodesk's targeted internal annual business plan. The CEO compensation represents salary paid during the relevant fiscal year combined with the full value of equity awards
Special Meeting Proxy Statement 22
and bonus payments made for the prior fiscal year performance. This general alignment between the experience of the stockholders in terms of investment performance and the compensation of the CEO clearly demonstrates the Committee's commitment to align pay with performance.
CEO Total Compensation comprises the following elements for the respective periods:
| | | | | | | | | | | | | | | | | (in thousands) | Fiscal 2010 | | Fiscal 2011 | | Fiscal 2012 | | Fiscal 2013 | Salary | $ | 825 |
| | $ | 921 |
| | $ | 945 |
| | $ | 991 |
| Bonus and Non-Equity Incentive Deferral Compensation | 810 |
| | 1,429 |
| | 1,301 |
| | 1,142 |
| Options (1) | 3,705 |
| | 4,387 |
| | — |
| | — |
| RSUs (2) | — |
| | 8,762 |
| | 3,013 |
| | 3,447 |
| PSUs (3) | — |
| | — |
| | 7,030 |
| | 5,432 |
| Other | 5 |
| | 6 |
| | 4 |
| | 4 |
| CEO Total Compensation | $ | 5,345 |
| | $ | 15,505 |
| | $ | 12,293 |
| | $ | 11,016 |
|
_________________ | | (1) | Option amounts are attributed to the fiscal year prior to the fiscal year in which the awards were approved. For example, the fiscal 2011 option amount of $4.4 million reported in this table represented options granted in fiscal 2012 that were based on fiscal 2011 performance. Option amounts reported represent the grant date fair value, calculated using the Black-Scholes-Merton option-pricing model. |
| | (2) | RSU amounts are attributed to the fiscal year prior to the fiscal year in which the awards were approved. For example, the fiscal 2013 RSU amount of $3.4 million reported in this table represented RSUs granted in fiscal 2014 that were based on fiscal 2013 performance. RSU amounts reported represent the grant date fair value using the stock price on the date of grant. |
| | (3) | PSU amounts are attributed to the fiscal year prior to the fiscal year in which the awards were approved. The fiscal 2013 PSU amount of $5.4 million reported in this table represents the value of 126,000 target PSUs relating to specific revenue and non-GAAP operating |
Special Meeting Proxy Statement 23
margin objectives and relative TSR, with an assumed value per share of $43.11 based on the Monte Carlo Simulation valuation model. The fiscal 2012 PSU amount of $7.0 million is based on fiscal 2012 performance, though it was not approved until fiscal 2013. The fiscal 2012 PSU amount reported represents the value on the date of approval of a combination of (a) 110,000 target PSUs relating to Autodesk's strategic plan and management and (b) 82,500 target PSUs relating to specific revenue and non-GAAP operating margin objectives.
To better understand the relationship between the compensation of the Named Executive Officers and Autodesk's performance, below is a summary of Autodesk's performance over the last two fiscal years followed by a description of the Separation Agreementrelevant compensation decisions made for the Named Executive Officers.
Fiscal 2013 Business Summary
In fiscal 2013, Autodesk executed on several of its most critical business objectives and met a number of its absolute financial targets. The results reflected a solid performance despite Autodesk executing on a long-term business model shift. The following summarizes the relevant performance factors considered by the Committee in reaching its decisions regarding pay for the Named Executive Officers for fiscal 2013 performance.
Revenue was $2.3 billion, an increase of 4% from fiscal 2012.
Autodesk had record total billings and maintenance billings at the end of fiscal 2013.
GAAP operating margin decreased 280 basis points to 13%, compared to 16% in fiscal 2012. The decrease in GAAP operating margin was primarily the result of restructuring charges in fiscal 2013 stemming from Autodesk's reorganization.
Non-GAAP operating margin increased by approximately 135 basis points to 25% compared to 24% in fiscal 2012.*
GAAP diluted earnings per share decreased to $1.07, compared to $1.22 in fiscal 2012. The decrease in GAAP diluted earnings per share was primarily the result of restructuring charges in fiscal 2013 stemming from the reorganization.
Non-GAAP diluted earnings per share increased to a record $1.94, compared to non-GAAP diluted earnings per share of $1.74 in fiscal 2012.*
Fiscal 2013 ended with record total deferred revenue of $835 million, an increase of 16% from fiscal 2012.
Cash flow from operating activities was $559 million, compared to $574 million in fiscal 2012.
Autodesk made progress on key initiatives. Among other things, Autodesk launched cloud-based initiatives, including Autodesk360, which positions Autodesk for success in the future.
The stock price was $38.88 per share at January 31, 2013, compared to $36.00 per share at January 31, 2012.
TSR for the year was 8%, an improvement over the comparable performance for fiscal 2012.
The creation of sustainable long-term value for Autodesk's stockholders depends not only on strong financial performance in the near-term, but also on Autodesk's ability over the long-term to identify and develop high-quality software and services solutions. The Committee believes that the operational accomplishments achieved during fiscal 2013 position Autodesk for future success that should continue to be reflected in long-term value creation. ________________ * A reconciliation of GAAP to non-GAAP financial measures and other related information is foundavailable on pages 46-47 of Autodesk's Annual Report on Form 10-K for the fiscal year ended January 31, 2013.
Executive Compensation Decisions for Fiscal 2013 Performance
In recognition of Autodesk's absolute and relative performance in “Executive Compensation—fiscal 2013, in March 2013, the Committee determined to reward the executive officers for their management of the business, while also providing meaningful incentives to achieve longer term financial goals and retain key talent. Given the feedback received from stockholders, the Committee implemented a revised performance stock unit award plan incorporating multi-year performance periods and a relative TSR modifier. A majority (60% for the CEO; 50% for other NEOs) of the long-term incentive compensation opportunities awarded in March 2013 for fiscal 2013 were performance-based. As described above, this compensation structure better aligns the long-term interests of the stockholders with the Committee's duty to retain and motivate key talent.
Special Meeting Proxy Statement 24
Consistent with fiscal 2013 business results, the Committee took the following actions in March 2013:
| | | | Base Salary | The base salaries for the CEO and other Named Executive Officers were increased by 4%. The Committee made these increases to recognize the performance of the Named Executive Officers and to maintain the desired balance in their compensation mix between cash and equity. | | | | Annual Cash Incentive Awards | Annual cash incentive awards for fiscal 2013 were awarded based on fiscal 2013 achievement of financial performance targets established by the Committee under the Autodesk Incentive Plan. Through these pre-established targets, the bonus pool was funded at 92.3% of the target annual cash incentive award opportunity for the CEO and at 92.3% of the target annual cash incentive award opportunity for each of the other Named Executive Officers, below fiscal 2012 levels. The decision to pay these amounts was based on the positive relative TSR performance of Autodesk's stock despite Autodesk achieving below target internal financial results. The percentage of target bonus attainment was based upon a predetermined formula blending the lower than targeted revenue growth and the near targeted non-GAAP operating margin. | | | | Equity Awards | In March 2013, the Committee granted the Named Executive Officers equity awards in the form of performance stock unit awards (60% for the CEO; 50% for the other NEOs) and time-based restricted stock unit awards (40% for the CEO; 50% for the other NEOs). As described above, the value and earned amounts of the performance stock unit awards will be contingent upon achievement of revenue growth and non-GAAP operating margin performance targets and Autodesk relative TSR performance, aligning these awards with the long-term interests of the stockholders.
| | In determining the size of these equity awards, the Committee considered the practices of the companies in Autodesk's compensation peer group as well as the proper mix of cash and equity compensation to ensure that the equity awards motivate long-term value creation while satisfying the Committee's retention objectives. A significant influence on the size of these awards was the performance of the individuals in attaining financial and non-financial performance targets for fiscal 2013. | | In addition, in response to stockholder feedback, the Committee and the CEO agreed to amend a performance-based restricted stock award previously granted to the CEO, discussed at page 38, to align the performance metrics more closely with the interests of stockholders. Rather than use metrics relating to the implementation of a strategic plan and talent management, the Committee and the CEO agreed to modify the metrics and vesting criteria to match those used for the newly adopted performance-based stock program. |
Fiscal 2012 Business Summary
Because several of the compensation elements contained in the Summary Compensation Table for this Proxy Statement relate to Autodesk's performance in fiscal 2012, summary information about fiscal 2012 is presented here to provide context regarding the relevant compensation decisions by the Committee. In fiscal 2012, Autodesk successfully executed on many of its most critical business objectives, as reflected by strong absolute financial results:
Revenue was $2.2 billion, an increase of 14% compared to fiscal 2011 revenue of $2.0 billion.
GAAP operating margin increased approximately 210 basis points to 16%, compared to 14% in fiscal 2011.
Non-GAAP operating margin increased approximately 260 basis points to 24%, compared to 21% in fiscal 2011.*
GAAP diluted EPS increased 36% to $1.22, compared to $0.90 in fiscal 2011. Non-GAAP diluted EPS increased 32% to $1.74, compared to $1.31 in fiscal 2011.*
Despite these strong fiscal 2012 financial results, Autodesk's stock declined 12% from the end of fiscal 2011 to the end of fiscal 2012. ________________ * A reconciliation of GAAP to non-GAAP financial measures and other related information is available on pages 46-47 of Autodesk's Annual Report on Form 10-K for the fiscal year ended January 31, 2013.
Executive Compensation Decisions for Fiscal 2012 Performance
In recognition of Autodesk's strong absolute financial performance in fiscal 2012, in March 2012, the Committee determined to reward the executive officers for their effective management of the business. Given the greater use of performance-based equity awards among the companies in Autodesk's compensation peer group, the Committee introduced the use of performance stock unit awards for the executive officers. By doing so, the Committee ensured that a majority of the long-term compensation for the executive officers for fiscal 2012 was performance-based. Base salaries were increased between 4% and 13% reflecting performance and competitive practices, and actual cash incentive awards were determined based on achievement of pre-established performance targets for non-GAAP operating margin and revenue growth. This compensation structure better
Special Meeting Proxy Statement 25
aligned the long-term interests of Autodesk's stockholders with the Committee's duty to retain and motivate key talent.
Consistent with fiscal 2012 business results, the Committee took the following actions in March 2012:
| | | | Base Salary | Increased the base salary of the CEO by 4% and the base salaries of the other Named Executive Officers by amounts ranging from 4% to 13%. The Committee made these increases to reward the individual performance of each of the Named Executive Officers, to properly align compensation levels with those of the compensation peer group, and to maintain the desired balance in their compensation mix between cash and equity. | | | | Annual Cash Incentive Awards | Approved annual cash incentive awards for fiscal 2012 that, based on fiscal 2012 financial performance, were earned at 136.8% of the target annual cash incentive award opportunity for the CEO and at 112% to 120% of the target annual cash incentive award opportunity for each of the other Named Executive Officers. These amounts reflected the achievement of pre-established goals for non-GAAP operating margin and revenue growth under the executive incentive compensation plan, as well as the individual performance of each Named Executive Officer. | | | | Equity Awards | In March 2012 and based on fiscal 2012 financial performance, the Committee granted the Named Executive Officers equity awards in the form of performance stock unit awards and time-based restricted stock unit awards. Both of these vehicles are aligned with the long-term interests of the stockholders because the value realized from the performance stock unit awards is dependent on Autodesk's revenue growth and non-GAAP operating margin targets. The Committee did not grant stock options to the NEOs. | | In determining the size of these equity awards, the Committee considered the practices of the companies in Autodesk's compensation peer group as well as the proper mix of cash and equity compensation to motivate long-term value creation and satisfy retention objectives. The size of these awards also was influenced by the performance of the individuals in attaining Autodesk's financial and non-financial performance targets for fiscal 2012. | | | Additional Performance-Based Award for CEO | In March 2012, the Committee also granted an additional performance stock unit award to the CEO, the value of which was to be realized only if he satisfied specific strategic corporate and talent management performance objectives established by the Committee. In March 2013, the Committee determined that the CEO had fully met the established strategic corporate objectives and had attained 85% of the talent management performance objectives. Based in part on stockholder feedback, in March 2013, the Committee amended this award to refocus the second and third year performance periods solely on the achievement of specific revenue growth and non-GAAP operating margin targets as well as Relative TSR performance. |
Executive Compensation Policies and Practices
Autodesk's executive compensation program is complemented by several policies and practices that strengthen the alignment of the executive compensation arrangements with the interests of stockholders and represent strong governance practices. The Committee implemented changes during fiscal 2012 and fiscal 2013 to improve the linkage of pay for performance and enhance a foundation of strong governance practices.
“Double-Trigger” Change in Control Arrangements and Employment Agreements,” below.Summary of Executive Compensation in Fiscal 2011
This summary section is intended to help you understand how we met our compensation objectives described above during fiscal 2011 by:
structuring fiscal 2011 executive compensation in light of the macroeconomic environment and anticipated Company performance;
paying executive compensation based on financial and other performance during fiscal 2011; and
establishing and following sound compensation governance practices.
Global economic uncertainty at the beginning of fiscal 2011, the improved economic and market environment during fiscal 2011 and the positive impact of this environment on our financial performance affected our Named Executive Officers’ compensation in several ways, as described below.
Executive Compensation Decisions for Fiscal 2011
Our compensation program for fiscal 2011 was established at the beginning of fiscal 2011 during a period of uncertainty. The global economy appeared to continue to be in recession, and many macroeconomic concerns remained from the prior year. In addition, the Company had experienced one of its most difficult financial years during fiscal 2010, and cost controls continued to be a point of Company emphasis. Against this backdrop, our Compensation Committee took a prudent and conservative approach to setting our Named Executive Officers’ compensation as follows:
Executive officers’ base salaries, including our Named Executive Officers’ salaries, remained frozen at fiscal 2010 levels, except Mr. Bhatt. This effectively meant that executive officer salaries were at the same level as fiscal 2009 since the Company similarly froze salaries from fiscal 2009 to fiscal 2010. Portions of our Named Executive Officers’ salaries for fiscal 2009 and fiscal 2010 were temporary reduced by 10%, which is excluded from the levels noted in the preceding sentence.
Our short-term cash incentive plan (a cash bonus plan known as our Executive Incentive Plan or EIP) was set to fund at 75% of aggregate employee target payouts if we met our financial plan, and to fund at 100% (or more) of aggregate employee target payouts only if we meaningfully exceeded our plan.
Award targets (as a percent of base salary) of our short-term cash incentive plan, were increased to shift even more focus on achieving financial performance improvement against the annual operating goals set for the fiscal year, including increased revenue and improved non-GAAP operating margin. This effectively shifted cash compensation to short term performance based awards rather than salary.
Executive stock equity grants with standard four year vesting were made to aid executive retention and alignment with stockholder interests. No restricted stock awards were made except in connection with the short-term cash incentive plan.
While the basic elements of our compensation program for fiscal 2011—base salary, short-term incentives and long-term incentives—were generally consistent with the elements of our programs in previous fiscal years, the Compensation Committee sought to be conservative in its compensation approach while providing meaningful incentives to achieving our financial goals.
Gross-Up Payments Financial Performance in Fiscal 2011 and its Effect on Executive Compensation Paid for Fiscal 2011Despite a continued difficult business and economic environment, we experienced an increase in demand for our products and services in all of the geographies and industries we serve during fiscal 2011 as compared to fiscal 2010. This positively impacted our financial results and stock price. In addition, we continued to make progress in controlling our operating costs, which led to year over year improvements in our non-GAAP operating margin. We believe that the improvements in these areas are indications of a broad-based stabilization of our business.: The table below sets forth the improvements in our revenue, non-GAAP income from operations and non-GAAP operating margin from fiscal 2010 to fiscal 2011:
| | | | | | | | | | | | | | | Fiscal 2011 | | | Fiscal 2010 | | | Change | | | | (in millions, except percentages) | | Revenue | | $ | 1,951.8 | | | $ | 1,713.7 | | | | 14 | % | Non-GAAP income from operations | | $ | 418.8 | | | $ | 286.8 | | | | 46 | % | Non-GAAP operating margin | | | 21 | % | | | 17 | % | | | 28 | % |
Our total stockholder return during fiscal 2011 was 71%, with the Company’s stock price appreciating from $23.81 on the first day of fiscal 2011 to $40.68 on the last day of fiscal 2011, with the stock price reaching its highest price of $42.03 and its lowest price of $22.95 during that period.
Our revenue increased 14% during fiscal 2011 as compared to fiscal 2010, and our non-GAAP operating margin (which excludes stock-based compensation, amortization of certain purchased intangible assets, restructuring charges and impairment of goodwill) increased 28% during fiscal 2011 as compared to fiscal 2010. Although our financial results in fiscal 2011 have not returned to the levels that we achieved several years ago, they exceeded our expectations and the financial targets set at the beginning of fiscal 2011. As a result of our financial results for fiscal 2011, our Named Executive Officers’ compensation increased from fiscal 2010 levels. Specifically:
As a direct result of the Company exceeding its financial targets, our short-term cash incentive plan paid out well above the 75% of the target funding level set at the beginning of fiscal 2011. Short-term cash incentive, in aggregate, for our Named Executive Officers increased 35% over the amount paid in fiscal 2010 while the Company’s revenue and non-GAAP operating margin increased 14% and 28%, respectively.
Long-term equity incentives in fiscal 2011 continued to constitute a significant portion of each of our Named Executive Officers’ compensation. The cost to the Company of this compensation is reported in the compensation tables beginning on page 46. The value to our executives of this type of compensation is directly linked to the performance of our stock price (“over time”), aligning our executives’ interests with our stockholders’ interests. As described above in this section, our stock price appreciated 71% during fiscal 2011, and as a result the intrinsic value of equity granted to our Named Executive Officers prior to fiscal 2011 increased.
Compensation Governance Practices
A number of fundamental elements of our compensation programs support our overall philosophy, which in practice are reflected in a number of our programs and practices, such as:
Mix of short- and long-term focused compensation.
Stock ownership guidelines that have been exceeded by each of our Named Executive Officers.
A “no-hedging” policy in our insider trading policy that prohibits our directors, named executive officers, other executive officers and certain employees from trading in derivative securities of Autodesk.
The Compensation Committee’s engagement of its own independent consultant that does not provide any services to management and had no prior relationship with any of our Named Executive Officers.
A change in control program for our Named Executive Officers that requires bothexecutive officers provides payments and benefits only in the event of a qualifying termination of employment following a change in control of Autodesk. Further, the Company and termination of employment (“double trigger”) andchange in control plan does not provide executive officers with any “gross-ups.” tax reimbursements or “gross-ups” in the event of a change in control of Autodesk. Effective Risk Management: Autodesk employs a strong risk management program with specific responsibilities assigned to management, the Board, and the Board’sBoard's committees. Each year, the Committee evaluates Autodesk's compensation-related risk profile.
Authority forHedging Prohibition: Company policy prohibits employees and directors from hedging.
Option Re-Pricing Prohibition: Autodesk is prohibited from re-pricing any outstanding options to purchase shares of Common Stock without express stockholder approval.
No Executive Benefits and Limited Perquisites: As a general practice, executive officers are not provided material benefits or special considerations that are not provided to other employees.
Compensation DecisionsMixAs: Autodesk emphasizes variable compensation balanced between short- and long-term performance (on average, 77% of the endNamed Executive Officers' fiscal 2013 total compensation opportunity was variable and “at risk”). In the case of
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the CEO, 89% of his fiscal 2011,2013 total compensation opportunity was variable and “at risk” with 83% of that amount tied to Autodesk's absolute or relative financial performance.
Long-Term Performance Orientation: The majority of the Named Executive Officers' total compensation opportunity (on average, 60% in fiscal 2013) is dependent on Autodesk's long-term performance. Of the CEO's fiscal 2013 total compensation opportunity, 77% is dependent on Autodesk's long-term performance.
Multi-Year Equity Award Vesting: Typically, executive officer equity awards vest over three years periods.
Significant Stock Ownership Requirements: Executives are subject to mandatory stock ownership guidelines that are monitored on an annual basis.
Independent Compensation Committee consistedand Adviser: The Committee determines compensation for the Named Executive Officers with the assistance of threean independent nonemployee directors as defined by the listing standards of compensation advisory consultant, Pay Governance, LLC.
Compensation Guiding Principles
The NASDAQ Stock Market:Steven M. West (Chairman)
Sean M. Maloney also served on the Compensation Committee through June 10, 2010 (the date of the Company’s 2010 Annual Stockholder’s meeting) priorbelieves that Autodesk's executive compensation program should be designed to his appointmentattract, motivate, and retain talented executives and should provide a sensible framework that is tied to the Corporate Governance Committee.
corporate and individual performance and Autodesk long-term strategic goals. The Compensation Committee: Has the authority to approve the objective and structure of ourgeneral compensation programs for ourobjectives are to:
Motivate executive officers including Named Executive Officers.to achieve business and financial goals; Balance rewards for ensuring that our executive officer compensation programs are effectively designed, implementedshort- and administered with sound corporate governance practices.long-term performance; Aligns its decisions with our overall compensation objectives,
Recruit and seeks to balance pay with performanceretain the highest caliber of executives through competitive rewards; and potential compensation risks to ensure long-term enhancement to our stockholder’s investments. Annually reviews and approves compensation for our Chief Executive Officer (“CEO”) and President and other executive officers.
This includes:
short-term cash incentives,
employment agreements and severance arrangements,
change-in-control provisions,
other benefits or compensation arrangements.
In determining our CEO’s compensation,Maintain general alignment in the Compensation Committee solicits input fromphilosophy used in compensating the full Board of Directors before making final decisions.
In addition, the Board of Directors has delegated to the Compensation Committee authority to grant stock options, restricted stock units and other equity grants to Autodesk’s executive officers and other employees. The Compensation Committee’s charter and additional information about
Within this framework, the Compensation Committee are available atwww.autodesk.com under “Investors—Corporate Governance.”Role of Company Management in Compensation Decisions
The Compensation Committee setstotal compensation for oureach executive officers, including ourofficer varies based on multiple dimensions:
Whether Autodesk achieves its short-term and long-term financial and non-financial objectives
The specific role and responsibility of the officer;
Individual officer's skills, competency and performance; and
Autodesk TSR.
The Committee consistently emphasizes variable compensation balanced between short and long-term performance. On average, 77% of the Named Executive Officers.Certain officers such as our CEO; Senior Vice PresidentOfficers' fiscal 2013 total compensation opportunity was variable in nature and “at risk.
The executive compensation program includes performance-based short-term cash incentive compensation that rewards strong financial and operational performance, and long-term incentive compensation in the form of Human Resourcesequity awards that reward both strong financial and Corporate Real Estate;operational performance and relative TSR performance. Short-term incentive cash payments are determined primarily by achievement of predetermined non-GAAP operating margin and revenue growth targets.
Special Meeting Proxy Statement 27
The charts below demonstrate the vice president responsible for compensation and benefits; and other employees from our Human Resources, Finance, and Legal organizations may assist and support the Compensation Committee by, for example, developing compensation proposals for Compensation Committee consideration, analyzing competitive compensation information, and providing analysespay mix of the statusthree main components of fiscal 2013 compensation programs such as levels of(base salary, short-term cash incentive and long-term equity ownership held by executive officers and gains in equity holdings that remain contingent upon subsequent vesting provisions. However, these individuals do not have decision-making authority in regards to executive officercompensation) for the Named Executive Officers.
The Compensation-Setting Process
The Committee determines the compensation and our CEO is not present duringfor the Compensation Committee’s deliberations or voting on his compensation.Our CEO annually reviews the performance of our other executive officers including the other Named Executive Officers, with our Compensation Committee. As part of this review, the CEO recommends salary adjustments, short-term cash incentives and equity incentive awards, promotions, and other compensation and benefits.CEO. The Compensation Committee reviews these recommendations, but has final authority to set these amounts in its discretion.
In all cases, ultimate discretion for the level, type and mix of executive compensation in total and for each individual executive officer rests with the Compensation Committee.
Use of Outside Consultants
While management may use compensation consultants to assist in the evaluation of CEO orrevises executive officer compensation plans and arrangements and approves all components of each executive officer's compensation.
CEO Pay Decisions
The Committee prepares the CEO's annual performance review by obtaining formal input from the independent directors of the Board, including the Chairman, and from senior management. The CEO also submits a self-assessment focused on pre-established objectives agreed upon with the Board. The Committee meets as a group in executive sessions and separately meets with the independent directors of the Board to prepare the review, which is completed and presented to the CEO. This evaluation is used by the Committee to determine the CEO's base salary, target annual cash incentive awards, and equity awards. The Committee formulates a recommendation on CEO compensation, consults with the independent directors of the Board, and after consultation, approves the CEO compensation.
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Executive Officer Pay Decisions
The CEO makes recommendations to the Committee on the base salary, target annual cash incentive awards, and equity awards for each executive officer other than himself, based on his assessment of each executive officer's performance during the year and the CEO's review of compensation data gathered from compensation surveys. The CEO reports on each executive officer's performance during the year, detailing accomplishments, areas of strength, and areas for development. The CEO bases his evaluation on his knowledge of each executive officer's performance, an individual self-assessment completed by each executive officer, and feedback provided by each executive officer's direct reports. The Human Resources and the Compensation Committee hasand Benefits Group assists the sole authority to retainCEO in developing the executive officers' performance reviews and terminate its own compensation consultant as it deems appropriate. The compensation consultant’s role is to provide independent third-party advice to assistreviewing the Compensation Committee in evaluating and designing our executive compensation policies and programs. While the compensation consultant reports directly to the Compensation Committee, there is interaction between the compensation consultant and our employees as part of the process of providing executivemarket compensation data to the Compensation Committee. In addition,determine the compensation recommendations.
In executing the responsibilities set forth in its charter, the Committee relies on several resources to provide input to the decision-making process:
Independent consultant: The Committee retained Pay Governance, LLC as its compensation adviser for fiscal 2013. Pay Governance provided advice and ourrecommendations on many issues: total compensation philosophy; program design, including program goal, components, and metrics; compensation trends in the high technology sector and general market for senior executives; and the compensation of the CEO and the other executive officers discuss overall Company goalsofficers. The Committee has considered the independence of Pay Governance in light of NASDAQ's new listing standards for compensation committee independence and objectives.the rules of the Securities and Exchange Commission. The CompensationCommittee requested and received a written confirmation from Pay Governance addressing the independence of the firm and its senior advisers working with the Committee. The Committee discussed these considerations and concluded that the work performed by Pay Governance did not raise any conflict of interest.
Management: The Committee also has authority to obtain independent adviceconsults with management and assistance from internal or external legal, accounting, or other advisors. | | | Independent Advisor
Engaged in Fiscal 2011
| | Activities
| | | Towers Watson & Co. | | • Advised the Compensation Committee on executive compensation decisions through September 2010
• Assisted in evaluating the peer group of companies the Compensation Committee uses to identify competitive compensation trends and levels (see “Benchmarking of Compensation” below)
• Provided relevant market data, including competitive and best practices.
|
| | | Independent Advisor
Engaged in Fiscal 2011
| | Activities
| | | Pay Governance | | • Replaced Towers Watson & Co. in September 2010 when primary consultant changed firms; as a result, moved from a multi-line consulting advisor to an executive compensation “boutique” thus enhancing advisor independence
• Advised the Compensation Committee on executive compensation decisions
• Assisted in evaluating the peer group of companies the Compensation Committee uses to identify competitive compensation trends and levels (see “Benchmarking of Compensation” below)
• Provided relevant market data, including competitive and best practices.
| | | Compensia | | • Provided review, analysis, and recommendations for updating the Executive Change in Control program in light of both competitive and “best” practices
|
Benchmarking ofAutodesk's Compensation and Benefits Group regarding executive and non-executive employee compensation plans and programs, including administering Autodesk's equity incentive plans.
Competitive Compensation Positioning
To ensure that ourthe executive compensation practices including base salaries, target short-term cash incentives, and equity grants are competitive and meet our compensation objectives,consistent with the Compensation Committee uses the independent third-partyCommittee's executive compensation guiding principles, Pay Governance provides the Committee with compensation data. This data and services referenced above. The data and services reviewed by the Compensation Committee provide information on the compensation practices ofis drawn from a group of companies in our industryrelevant industries as well as competitors for executive talent (collectively, our “peer(the “compensation peer group”). The Compensation Committee uses the compensationthis data, as well as information about the pay practices of our peer group, and broader technology industry compensation practices, when deliberating on the compensation of the executive officers.
For fiscal 2013 compensation decisions made in March 2012, the compensation peer group included the following companies:
| | | | Activision Blizzard, Inc. | | Intuit, Inc. | Adobe Systems Incorporated | | NetApp, Inc. | Akami Technologies, Inc. | | Nuance Communications, Inc. | BMC Software, Inc. | | Parametric Technology Corporation | CA, Inc. | | Symantec Corporation | Citrix Systems, Inc. | | VMware, Inc. | Electronic Arts, Inc. | | Yahoo! Inc. |
The compensation peer group is reviewed and updated each year, as necessary, to assistensure that the comparisons remain meaningful. The compensation peer group was selected based upon multiple criteria including industry focus, scope and complexity, and whether we compete for talent. In assessing scope and complexity, companies were selected that met most, but not necessarily all, of the following criteria: similarity to Autodesk in terms of revenue, sales growth, free cash flow, market capitalization, and ratios of market value to sales and market value to employees. In addition, the Committee believes it is important that most of the compensation peer group companies be located in the same geographic region as Autodesk.
Following its evaluation of the stockholder feedback from the 2012 Annual Meeting of Stockholders, the Committee, with the assistance of Pay Governance, reviewed and updated the compensation peer group in an effort to refine the group of companies used for comparative purposes. Special Meeting Proxy Statement 29
As a result of this review, Symantec Corporation and Yahoo! Inc. were removed from the compensation peer group. The companies in the compensation peer group that was used during the latter portion of fiscal 2013 and into fiscal 2014 were as follows: | | | | | | | | | | Company* | | Reported Fiscal Year | | Annual Revenues ($) (in billions) | | Net Income (Loss) ($) (in billions) | | Market Capitalization (as of January 31, 2013) ($) (in billions) | Activision Blizzard, Inc. | | December 31, 2012 | | 4.86 | | 1.15 | | 12.70 | Adobe Systems, Inc. | | November 30, 2012 | | 4.40 | | 0.83 | | 18.87 | Akamai Technologies, Inc. | | December 31, 2012 | | 1.37 | | 0.20 | | 7.24 | BMC Software, Inc. | | March 31, 2012 | | 2.17 | | 0.40 | | 5.94 | CA, Inc. | | March 31, 2012 | | 4.81 | | 0.95 | | 11.32 | Citrix Systems, Inc. | | December 31, 2012 | | 2.59 | | 0.35 | | 13.64 | Electronic Arts, Inc. | | March 31, 2012 | | 4.14 | | 0.08 | | 4.72 | Intuit, Inc. | | July 31, 2012 | | 4.15 | | 0.79 | | 18.49 | NetApp, Inc. | | April 27, 2012 | | 6.23 | | 0.61 | | 12.97 | Nuance Communications, Inc. | | September 30, 2012 | | 1.65 | | 0.21 | | 7.61 | Parametric Technology Corporation | | September 30, 2012 | | 1.26 | | (0.04) | | 2.78 | VMware, Inc. | | December 31, 2012 | | 4.61 | | 0.75 | | 32.76 | Autodesk, Inc. | | January 31, 2013 | | 2.31 | | 0.25 | | 8.70 | Autodesk Percentile Ranking1 | | | | 33% | | 33% | | 42% | Maximum | | | | 6.23 | | 1.15 | | 32.76 | Minimum | | | | 1.26 | | (0.04) | | 2.78 |
______________ * The majority of these companies have headquarters in California.
Typically, the Committee exercises its subjective judgment in making decisions about overall compensation, the elements of compensation, the amount of each element of compensation, and the relative compensation among the executive officers and does not use a formula to set executive officer compensation in relation to this data. Specifically, the Committee references the median level of each compensation element among our executive officers. In fiscal 2011,compensation peer group companies, and sets the Compensation Committee used as reference material executivetarget total direct compensation information and data provided by AON/Radford and Equilar.Specifically, we set the total compensation targetopportunity for each of ourthe executive officers to be withinat or about the rangemedian of total compensation packages for similar jobs offered by companies in ourthe compensation peer group. In practice, actual compensation awards may be above or below that typical of the levels reflected by the compensation peer group, depending on CompanyAutodesk's
financial performance and the individual experience, skills, and performance of each executive officer. We believe The Committee believes that targetingreferencing the range of total compensation packages of ourthe companies in the compensation peer companiesgroup keeps ourAutodesk's compensation competitive and within market norms, while also providing flexibility for increases in compensation for those executive officers demonstrating extraordinary leadership and contribution to the Companycontributions and particular skills or expertise.
For fiscal 2011, our Named
Special Meeting Proxy Statement 30
The Principal Elements of the Executive Officers’Compensation Program
The principal elements of Autodesk's executive compensation (base salary, short-term cash incentive target and equity incentive compensation) in aggregate was within approximately 2% of similar compensation pay for similar positions with companies in our peer group.For fiscal 2011, the companies in our peer groupprogram are listed below. as follows:
| | | | | | | | Benchmark Companies
| Adobe Systems IncorporatedCompensation Element | | Electronic Arts, Inc. | BMC Software, Inc.Source | | Intuit, Inc. | CA, Inc.Purpose | | McAfee, Inc.Features | Cadence Design Systems Inc.Cash compensation | | NetApp, Inc. | Citrix Systems, Inc.Base salary | | Symantec Corporation | eBay, Inc.Forms basis for competitive compensation package and rewards individual performance and experience | | VMware, Inc.Fixed compensation; base salary level reflects competitive market conditions, individual performance, and internal equity | EMC Corporation | | Yahoo, Inc |
These companies all have headquarters located in the San Francisco Bay Area, with the exception of BMC Software with headquarters in Houston, Texas; CA, Inc. with headquarters in Islandia, New York; and EMC Corporation with headquarters in Hopkinton, Massachusetts.
Our peer group is reviewed and updated, as necessary, each year to ensure that the comparisons are meaningful. Several factors are considered in selecting our peer group, including industry, products and services offered, revenue level, geographic location, and competition for executive talent in our labor markets. McAfee will be removed from the peer group in fiscal 2012 as a result of its acquisition by Intel Corporation in February 2011.
Elements of Executive Compensation Programs
Autodesk’s executive compensation program has three key components:
short-term cash incentive, and
long-term equity incentives
The Company also provides a comprehensive benefits program and, under certain circumstances, severance.
These programs are designed to attract, retain, and motivate highly effective executive officers to achieve our business goals and improve stockholder value, by linking compensation to our overall strategic and financial performance, while seeking to ensure that our executive officers do not take unnecessary or excessive risks that could harm the Company and our stockholders. These programs are also intended to mitigate potential conflicts between incentives that benefit any one executive to the detriment of the Company and our stockholders. Although the amount and mix of each of these three key components generally are determined by objective assessment, the Compensation Committee retains and exercises judgment and subjective assessments in its ultimate compensation decisions.
| | | Elements of Executive
Compensation Program Short-term cash award opportunities | | Purpose
| | | Base SalaryMotivate achievement of specific growth and profitability objectives and maintain a high level of team and individual performance | | Base salary provides fixedVariable compensation; payments based upon achievement of revenue growth and non-GAAP operating margin targets for the fiscal year (for fiscal 2014 the CEO annual cashincentive metric is non-GAAP earnings per share relative to a target)
| Equity compensation set at a competitive level that recognizes the scope, responsibility and skills required | | Performance Stock Unit awards | | Align compensation with key drivers of the position.Base salary compensation is a reliable sourcebusiness and stockholder returns
Encourage focus on long-term strategic objectives
| | Initial target award determined by competitive market practices and corporate and individual performance in prior fiscal year
Vesting over three years after meeting pre-established revenue growth and non-GAAP operating margin performance levels (fiscal 2013 award; for fiscal 2014, relative TSR was added as an additional metric)
In the case of income for our executive officers, an important partthe CEO, vesting after meeting pre-established strategic performance objectives set by the Board | | | Time-based restricted stock unit awards | | Encourage focus on long-term strategic objectives
Further align the interests of retaining our executive officers and is not subject to the variability of the short-term cash incentive and long-term equity incentive components of our executive compensation programs. | | | Short-term Cash Incentive Plan
and Sales Commissions stockholders | | Our annual short-term cash incentive plan is intended to motivateAward amount determined by competitive market practices and reward participants to ensure Autodesk achieves its annual financialcorporate and non-financial objectives as well as individual objectives.
Sales commissions are a portion of total targeted cash compensation designed to motivate sales executives to achieve revenue and contribution targets. performance in fiscal year
Vesting over three years |
| | | Elements of Executive
Compensation Program
| | Purpose
| | | Long-term Incentives—Equity- based Compensation | | Equity incentive awards provide employees and
Base Salary
Base salary is used to provide the executive officers with a fixed amount of annual cash compensation. The Committee views base salary as a reliable source of income for the executive officers the opportunity to be rewarded for increases in our stock price, which we believe aligns the interests of our employees and executive officers with those of our stockholders.• Stock options remain our primary equity incentive vehicle and are intended to direct executive attention to the importance of sustained, long-term revenue growth and profitability
• Restricted stock units are granted as an additional retention tool to provide compensation to our executive officers despite the volatility of our stock price.
| | | | | Both stock options and restricted stock units are commonly used equity awards in the software and technology industry, and have become integral components of competitive compensation in our industry.
Vesting periods between two years (in the case of restricted stock units) and four years (in the case of stock options) encourage employees and executive officers to remain with the Company and focus on longer-term results.
| | | Benefits/Perquisites | | Health and welfare programs include medical, 401(k) matching, non-qualified deferred compensation plan, life insurance, paid time off and leaves of absence. We also provide for supplementary non-core benefits to accommodate regulatory, cultural and/or practical differences in the different geographies in which we have operations. |
Compensation Program Design and Practices
Base Salary
Eachan important retention tool that is not subject to the variability - and risk - associated with the short-term and long-term incentive elements of ourthe executive positions is assigned to an executive salary gradecompensation program. The Committee sets base salaries at a competitive level that recognizes the scope, responsibility and associated pay range based on an internal assessmentskills required of each position’s impactposition, as well as market conditions and scope of responsibility. The midpointsinternal pay equity.
In March 2012, the Committee considered a base salary analysis of the salary ranges are developed to reflect the increasing scope of responsibility at progressively higher executive levels and to remain competitive within our peer group. The midpoint of each range generally falls in the middle range of pay for similar jobs within our peer group. In general, an executive officer who is new or less experienced in his or her role will be paid lower in the range than an executive officer who has demonstrated proven performance in his or her role for many years, is highly proficient in the skills required for his or her role and applies those skills to very high levels of achievement.We believe that generally targeting the overall range of salary compensation of our peer group, keeps our salary component competitive and balanced, and provides the Compensation Committee the flexibility to increase compensation in its discretion.
Base salaries for executive officers are set annually by the Compensation Committee, typically at its March meeting. Promotion or any appropriate adjustments required during the year may be approved at other meetings. In March 2010, the Compensation Committee considered the benchmark analysis of base salary of our peer group, our CEO’sCEO's assessment of each executive officer’sofficer's experience, skills and performance level, the general state of the economy and the Company’sAutodesk's performance. For the CEO, the Compensation Committee consulted the full Board of Directors to conduct a similar assessment of his experience, skills and performance.
Based on those factors in the aggregate, and the general state of the economy specifically, our executive officers’officers' base salaries were not increased, inon average by 6% for fiscal 2011, except for Mr. Bhatt. An increase in Mr. Bhatt’s salary was approved by the2013. Annual Short-Term Incentive Compensation Committee to recognize his ongoing unique contributions and leadership.Short-term Cash Incentive Plan
The structure of our stockholder approved short-term cash incentive plan provides the Compensation Committee with the authority to provide short-term cash incentives that qualify as deductible “performance-based” compensation within the meaning of Section 162(m) of the Internal Revenue Code, provided that certain steps are taken each year. If such steps are not taken by the Compensation Committee, our short-term cash incentive plan still acts as a short-term cash incentive plan, but without qualifying as deductible “performance-based” compensation within the meaning of Section 162(m) of the Internal Revenue Code. For fiscal 2011, due in large part to the economic uncertainties at
At the beginning of each fiscal 2011,year, the Compensation Committee elected not to take steps under our short-termadopts performance targets and payout metrics for the annual cash incentive plan to create qualifying deductible “performance-based” compensation withinplans for the meaning of Section 162(m) of the Internal Revenue Code.Funding of the short-termfiscal year. The annual cash incentive plans are intended to motivate and reward participants for achieving company-wide annual financial and non-financial objectives as well as individual objectives. On March 8, 2012, the Committee adopted
minimum performance benchmarks for funding bonuses for the executive officers under the stockholder-approved Autodesk, Inc., Executive Incentive Plan for fiscal 2013 (the “Fiscal 2013 EIP”) and approved targets for the Autodesk Incentive Plan, the bonus plan was dependentestablished for all other employees of Autodesk, based on the achievement of certaintargeted revenue growth and non-GAAP operating margin levels(the “AIP Targets”).
Target Award Opportunities
The Committee sets the target annual cash incentive award opportunity for fiscal 2011. Detailseach eligible executive officer based on his or her salary grade. These target opportunities are expressed as a percentage of those amounts are provided below. Non-GAAPthe executive officer's annualized base salary, and range from 125% in the case of the CEO to 40% in the case of the Senior Vice President, Worldwide Sales and Services (who is also eligible for commission payments). An executive officer may receive
Special Meeting Proxy Statement 31
an actual award in an amount that exceeds or is less than his or her target award opportunity depending upon Autodesk's performance and the individual's performance against goals.
Corporate Performance Measures
The minimum funding level for the Fiscal 2013 EIP was based on Autodesk's financial performance as measured by revenue growth and non-GAAP operating margin for fiscal 2011 excluded2013. Each of these performance measures was to be equally considered to determine whether the objectives were met.The Committee set the target funding level for revenue growth from fiscal 2012 at 7%, and the target level for non-GAAP operating margin at 20%. Collectively, these target levels made up the target performance for the Fiscal 2013 EIP.
Similarly, the Committee set financial performance goals for the AIP Targets that set funding for the Autodesk Incentive Plan at 100% where Autodesk met a combination of several targeted revenue targets and non-GAAP operating margin goals. Anything below the set AIP Targets results in less than 100% funding and anything at or above the target performance for the AIP Targets results in more than 100% funding.
For purposes of both the Fiscal 2013 EIP and the AIP Target, “non-GAAP operating margin” meant operating margin excluding certain costs and expenses, including stock-based compensation expense, amortization of certain purchased intangibles, restructuring charges, and goodwill impairment charges. We believeThe Committee determined that the use ofusing a non-GAAP, operating margin rather than a GAAPGAAP-based, formulation of operating margin focuses ourwould better focus the executive officers on the on-goingongoing operations of ourthe business and encouragesencourage the development of long-term growth strategies, such as acquisitions and in-process research and development investments.Elements of short-term cash incentive plan performance criteria include financial performance targets and individual performance. All participants share the same financial performance goals, which are focused on annual revenue growth and profitability, as described in greater detail below. All participants also have unique annual non-financial individual performance goals that consist of specific business objectives and management effectiveness goals. Although the financial performance targets are objective and quantitative,
Individual Performance Objectives
For fiscal 2013, the individual performance goals are subjective, qualitative and permit the Compensation Committee to use discretion in determining the success of these criteria.Target Awards
The Compensation Committee set target short-term cash incentive amountsobjectives for each eligible participant based on his or her salary grade. These targets are percentages of such executive officer’s salary, and range from 125% in the case of our CEO to 16.7% in the case of our former Executive Vice President, Sales and Services. These targets are set against each executive officer’s annualized base salary. An executive officer may receive amounts below or above this target award. Target awards for our Named Executive Officers underOfficer involved:
Supporting the short-term cash incentive plan were each approximately: | | | | | Short-Term Cash Incentive Plan Participant
| | Short-Term Cash
Incentive Target
(as %achievement of base salary) | | Carl Bass, Chief Executive Officer and President
| | | 125 | % | Mark J. Hawkins, Executive Vice President and Chief Financial Officer
| | | 75 | % | George M. Bado, former Executive Vice President, Sales and Services
| | | 16.7 | % | Jay Bhatt, Senior Vice President, Architecture, Engineering and Construction
| | | 75 | % | Pascal W. Di Fronzo, Senior Vice President, General Counsel & Secretary
| | | 75 | % |
Financial Targets
For fiscal 2011, the Compensation Committee also set financial performance targets that increased funding with an increase of revenue and non-GAAP operating margin. The following represents funding at two financial performance levels, “Baseline Performance” and “Stretch Performance”:
Anything below the “Baseline Performance” target would have resulted in less than 75% funding.
Anything above the “Stretch Performance” target would have resulted in more than 100% funding.
| | | | | Fiscal 2011 Performance Targets | | | | Performance Level
| | Performance Target
| | Funding as a % of Target Funding
| “Baseline” Performance | | Revenue: $1.795 billion
Non-GAAP Operating Margin: 18.6%
| | 75% of Target Funding | | | | “Stretch” Performance | | Revenue: $1.834 billion
Non-GAAP Operating Margin: 20.0%
| | 100% of Target Funding |
Individual Performance Goals
For fiscal year 2011, each named executive officer’s individual performance goals were to support the following broad corporate performance goals:
Fiscal 2011 Broad Corporate Goals
Increase Revenue and Margin
Improve Customers’ Experiencemeasure target levels as described above;
Reinventing the customers' experience in all of their Interactionsinteractions with AutodeskEnsureAutodesk;
Making Autodesk Remains a Truly Great Placegreat place to WorkFiscal 2011 Results. For fiscal 2011,work; and
Making Autodesk the Company’s revenue was approximately $1.952 billionrecognized leader in 3D design, engineering, and non-GAAP operating margin was approximately 21.4%.The achievement of these financial targets resulted in an overall annual short-term cash incentive funding at 127% of the otherwise target short-term cash incentives whichentertainment software.
Short-Term Incentive Award Decisions
Awards are described below. For fiscal 2011, the Compensation Committee assessed each participant’s individual goals, including management effectiveness and achievement of the broad corporate goals. Based on these factors, including the financial performance targets outlined above, a participant may receive actual short-term cash incentive that is larger or smaller than his or her target award amount, or may receive no short-term cash incentive whatsoever. The actual award for executive officers reflects a combination of the target award, financial performance, and assessment of the individual’s performance during the year, and reflects the discretionary authority of the Compensation Committee.Actual Awards to Individuals. As discussed above, the Compensation Committee determines the actual awards based not only on the financial performance targets discussed above, but also on an evaluation of each individual’sindividual participant's performance. The Compensation Committee makes these determinations using its discretion, and the Compensation Committee does not specifically weightwithout weighing any particular factor nor applyor applying any prescribed formula in determining the amount of the actual awards.
For fiscal 2013, the Committee assessed each executive officer's individual goals, including management effectiveness, achievement of the broad corporate goals and performance of Autodesk's Common Stock relative to compensation peer group companies. At its March 20112013 meeting, the Compensation Committee reviewed ourAutodesk's absolute and relative financial performance and the individual performance of each of ourthe Named Executive Officers for fiscal 2011.2013. The achievement of the absolute financial performance targets resulted in an overall annual short-term cash incentive funding at 127%92.3% of the targetAIP Target short-term cash incentive amounts. While minimum Fiscal 2013 EIP thresholds were not met, given Autodesk's relative TSR, and the overall achievement of a 92.3% funding level for the AIP Target, the Committee determined to pay each Named Executive Officer at the funded level which was approximately 1,340 basis points lower than the short-term cash incentive funding level in 2012.
Special Meeting Proxy Statement 32
Accordingly, at itsin March 2011 meeting,2013, the Compensation Committee approved short-term cash incentive plan payoutsawards for the Named Executive Officers approximately as follows: | | | | | | | | | Participant | | Approved Short-Term Cash Incentive Plan Payout percent of Base Salary | | | Short-Term Cash Incentive Plan Payout as % of Target Award | | | | | Carl Bass | | | 158.8 | % | | | 127.0 | % | | | | Mark J. Hawkins | | | 95.2 | % | | | 127.0 | % | | | | George M. Bado (a) | | | 0.0 | % | | | 0.0 | % | | | | Jay Bhatt | | | 95.2 | % | | | 127.0 | % | | | | Pascal W. Di Fronzo | | | 95.8 | % | | | 128.0 | % |
| | | | | | | | | | | | Named Executive Officer | | Target Annual Cash Incentive Award Opportunity ($) | | Target Annual Cash Incentive Award Opportunity (as a percentage of base salary) | | Actual Annual Short- Term Cash Award ($) | | Actual Annual Short-Term Cash Award (as a percentage of base salary) | Carl Bass | | 1,237,500 |
| | 125% | | 1,142,213 |
| | 115% | Mark J. Hawkins | | 427,500 |
| | 75% | | 394,583 |
| | 69% | Jan Becker | | 296,250 |
| | 75% | | 273,439 |
| | 69% | Steve M. Blum (1) | | 170,000 |
| | 40% | | 156,910 |
| | 37% | Pascal W. Di Fronzo | | 318,750 |
| | 75% | | 294,206 |
| | 69% | Amar Hanspal | | 303,750 |
| | 75% | | 280,361 |
| | 69% | Robert Kross | | 296,250 |
| | 75% | | 273,439 |
| | 69% |
_________________ (a) | | (1) | The amounts disclosed for Mr. Bado isBlum do not eligibleinclude commissions for afiscal 2013 paid under his Sales Commission Plan for fiscal 2013. See the discussion below for details on his full short-term cash incentive plan payout because he was not an Autodesk employee on the payment date.including sales commission-based awards. |
Details of these amounts can be found in the “Executive Compensation—Summary Compensation Table and Narrative Disclosure” below.
Short-term Cash Incentive—Autodesk
Sales Compensation Plan. for Mr. Blum
In addition to at-risk compensation under thereceiving a short-term cash incentive plan,award, Mr. Bado, our former Executive Vice President, Sales and Services, had a portion of his targetedBlum was eligible to receive cash compensation tied to sales commissions based on Autodesk's achievement of specific revenue and contribution margin objectives.objectives for the fiscal year. For fiscal 2011,2013, Mr. Bado’sBlum's target commission-based cash incentive targetaward opportunity was set at approximately 38%30% of his overall targetedtarget cash compensation which includesopportunity (consisting of his base salary, target annual cash incentive award opportunity, and short term cash incentives (includingtarget commission-based cash incentive)incentive award opportunity). Of this 38%commission-based target approximately 34%amount, 83% related to the achievement of a specificpre-established revenue objective, and approximately 4%17% related to a specificpre-established contribution margin objective. Payouts forWhile the potential payment with respect to the revenue objective target set for Mr. Bado didwas not have a pre-set maximum limit, althoughcapped, the payouts forpotential payment with respect to the contribution margin objective did havehad a preset maximum limit equal to the target amount. level. Given the market environment that Autodesk was expected to face in fiscal 2013, the Committee believed that the target levels for these two objectives could be achieved through reasonable and diligent efforts.
For fiscal 2011,2013, Autodesk's actual revenue was below the Company’s revenue exceeded the target level set for Mr. Bado, whichBlum (which was substantially the same as the target setlevel established under the Fiscal 2013 EIP). However, Mr. Blum satisfied the target level for our short-term cash incentive plan, noted above. In addition, Mr. Bado met the contribution margin threshold setestablished for him. The contribution margin target set for Mr. Bado in fiscal 2011 was lower than the contribution margin set for Mr. Bado in fiscal 2010. Given the challenges that the Company faced in fiscal 2011, the Company believes that targets set for Mr. Bado’s commission-based cash incentive represented a reasonable but achievable target. As a result, of Mr. Bado exceeding these targets, Mr. Bado’sBlum's actual commission-based cash incentive was approximately 57%8% below his target level and represented 29% of his overall actual cash compensation. Details ofcompensation for the amountsfiscal year.
The amount paid to Mr. Bado as sales commissions can be found in the table below,Blum pursuant to his Sales Compensation Plan, as well as pursuant to all of his cash incentive award opportunities, for fiscal 2013 was as follows:
| | | | | | | | | | | | | | Target Annual Cash Incentive Award Opportunity ($) | | Target Annual Cash Incentive Award Opportunity (percentage of target annual cash incentive compensation opportunity) | | Actual Annual Cash Incentive Award Opportunity ($) | | Actual Annual Cash Incentive Award Opportunity (percentage of actual annual cash incentive compensation opportunity) | Sales commissions - revenue | | 212,500 |
| | 25% | | 195,623 |
| | 92% | Sales commissions - contribution margin | | 42,500 |
| | 5% | | 38,250 |
| | 90% | Fiscal 2013 Short -Term Cash Incentive | | 170,000 |
| | 20% | | 156,910 |
| | 92% | | | 425,000 |
| | | | 390,783 |
| | |
Long-Term Incentive Compensation
Autodesk uses long-term incentive compensation, in the “Executive Compensation—Summary Compensation Tableform of equity awards, to motivate and Narrative Disclosure” below. | | | | | | | | | | | | | | | | | | | Target Short- Term Cash Incentive Compensation | | | Percent of Target Short- Term Cash Incentive Compensation | | | Actual Short- Term Cash Incentive Compensation | | | Percent of Actual Short- Term Cash Incentive Compensation | | Sales commissions - revenue | | $ | 300,000 | | | | 71.5 | % | | $ | 611,575 | | | | 93.9 | % | Sales commissions - operating margin | | | 40,000 | | | | 9.5 | % | | | 40,000 | | | | 6.1 | % | Short-term cash incentive plan (EIP) (a) | | | 80,000 | | | | 19.0 | % | | | — | | | | 0.0 | % | | | | | | | | | | | | | | | | | | | | $ | 420,000 | | | | 100.0 | % | | $ | 651,575 | | | | 100.0 | % | | | | | | | | | | | | | | | | | |
(a) | Mr. Bado is not eligible for a short-term cash incentive plan payout because he was not an Autodesk employee on the payment date. |
As noted above, on December 14, 2010, Mr. Bado announced his intention to resign as our Executive Vice President, Sales and Services. In connection with Mr. Bado’s resignation, we entered into a Separation Agreement with Mr. Bado on January 28, 2011. A description of the Separation Agreement is found in “Executive Compensation—Change in Control Arrangements and Employment Agreements,” below.
Long-term Incentives—Equity-based Compensation
In determining actual grants of stock options and restricted stock units toreward executive officers for effectively executing longer-term strategic and
operational objectives. The value of these equity awards is based on the Compensationvalue of our Common Stock and, these awards help align the interests of executive officers with those of Autodesk's stockholders.
Special Meeting Proxy Statement 33
During fiscal 2013, the Committee considers several factors, includingapproved equity awards for the unvested optionNamed Executive Officers composed of performance stock unit (“PSU”) awards and time-based restricted stock unit position(“RSU”) awards. The Committee elected to use PSUs as the primary equity vehicle for the executive officers because these awards reflect a balance between significant upside potential for superior stock price performance, and decline in award size (to zero at the extreme) for performance that is below expectations.
The Committee exercises its judgment in determining the size of the equity awards granted to executive officers. For each eligible executive, officer, the Committee considers the outstanding and unvested options to purchase shares of Common Stock, PSU awards, and RSU awards the executive already holds; the relative value of those options and restricted stock unitsequity awards compared to the awards held by other Company executive officers,officers; the desired incentive mix of incentives between optionsPSU awards and restricted stock units, competitive pay practices within our peer groupRSU awards; a compensation analysis prepared by the Committee's compensation consultant; and the individual experience, skills, and performance level of the executive officer. The Compensation Committee uses “new hire,” “promotion,” and “ongoing” stock grant guidelines
Long-term incentive compensation in determining the appropriate sizeform of grants. The stock grant guidelines reflect the range of typical competitive practices of our peer group. The Compensation Committee has authority to exceed these guidelines within the limits prescribed under the equity compensation plan approved by stockholders. The current equity compensation plan limits any individual option grant to 1,500,000 shares and any restricted stock grant (including restricted stock units) to 300,000 shares, except grants to individuals in their first fiscal year of service. In that case, the limit is 3,000,000 shares for an option grant, and 600,000 shares for a restricted stock awards (including restricted stock units).All equity grants to executive officers are made by the Compensation Committee. Approval of annual equity grants for executive officers occur at regularly scheduled quarterly meetings of the Compensation Committee.
Historically, the Compensation Committee has approved equity grants to newly-hired executive officers at its first quarterly meeting following the executive officer’s hire date, although the Compensation Committee may also approve equity grants to newly-hired executive officers at the Compensation Committee meeting at which the appointment of the new executive officer is approved. The Compensation Committee also approves promotion grants at the Compensation Committee meeting at which the promotion is approved, or at the next quarterly Compensation Committee meeting following the promotion.
Although long-term incentives through equity awards represented a significant portion of mostthe total direct compensation opportunity of ourthe Named Executive Officers’ totalOfficers in fiscal 2011 compensation, it represents2013. Since equity awards are a variable componentform of compensation, for whichtheir full value may not be realized due to stock market conditions, availability of trading windows, vesting conditions, award expiration, and similar factors.
March 2012 Equity Award Decisions
For the equity awards granted in March 2012 relating to the prior fiscal year (fiscal 2012) performance, the Committee took special consideration of Autodesk's absolute financial performance, including revenue growth and operating margin expansion. Specifically, the Committee reviewed the CEO's total compensation relative to these performance metrics to ensure alignment with the long-term interests of the stockholders, among other things.
In March 2012, the Committee granted equity awards to the Named Executive Officers in the following amounts:
| | | | | | | | | | | | | | | | | Named Executive Officer | | Target Number of Shares Subject to PSU Award (#) | | Grant Date Fair Value of PSU Award ($) | | Number of Shares Subject to RSU Award (#) | | Grant Date Fair Value of RSU Award ($) | | Grant Date Fair Value of Total Equity Award ($) | Carl Bass | | 82,500 |
| | 3,012,900 |
| | 82,500 |
| | 3,012,900 |
| | 6,025,800 |
| Mark J. Hawkins | | 16,250 |
| | 593,450 |
| | 16,250 |
| | 593,450 |
| | 1,186,900 |
| Jan Becker | | 12,500 |
| | 456,500 |
| | 12,500 |
| | 456,500 |
| | 913,000 |
| Steve M. Blum | | 16,250 |
| | 593,450 |
| | 16,250 |
| | 593,450 |
| | 1,186,900 |
| Pascal W. Di Fronzo | | 12,500 |
| | 456,500 |
| | 12,500 |
| | 456,500 |
| | 913,000 |
| Amar Hanspal | | 16,000 |
| | 584,320 |
| | 16,000 |
| | 584,320 |
| | 1,168,640 |
| Robert Kross | | 12,500 |
| | 456,500 |
| | 12,500 |
| | 456,500 |
| | 913,000 |
|
PSU Awards
For grants made in March 2012, PSUs are performance-based restricted stock unit awards pursuant to which the number of shares of Common Stock that may be earned is contingent upon Autodesk's absolute financial performance. The shares of Common Stock subject to each of these PSU awards were to be earned based upon Autodesk's revenue growth and non-GAAP operating margin performance for fiscal 2013, calculated under a pre-established performance matrix. The Committee established the fully funded target levels for the revenue performance measure at $2.5 billion and the target level for the non-GAAP operating margin performance measure at 26.0%. The Committee approved a matrix combining Autodesk's revenue growth and non-GAAP operating margin performance to account for performance levels that were higher or lower than the targeted levels. After the Committee determined the number of shares of Common Stock earned pursuant to the PSU awards, if any, such shares were to vest in three equal annual installments from the date of grant.
Special Meeting Proxy Statement 34
In March 2013, based upon a review of Autodesk's performance in the prior year (fiscal 2013), the Committee certified the March 2012 PSU awards attainment level at 92.3% of target. Based on this performance, the PSU awards were earned as follows: | | | | | | | | | | | Named Executive Officer | | Target Number of Shares Subject to PSU Award (#) | | Actual Number of Shares Earned Pursuant to PSU Award (#) | | Grant Date Fair Value of Shares Earned Pursuant to PSU Award in Fiscal 2013 (#) | Carl Bass | | 82,500 |
| | 76,170 |
| | 2,781,728 |
| Mark J. Hawkins | | 16,250 |
| | 15,002 |
| | 547,873 |
| Jan Becker | | 12,500 |
| | 11,540 |
| | 421,441 |
| Steve M. Blum | | 16,250 |
| | 15,002 |
| | 547,873 |
| Pascal W. Di Fronzo | | 12,500 |
| | 11,540 |
| | 421,441 |
| Amar Hanspal | | 16,000 |
| | 14,722 |
| | 537,647 |
| Robert Kross | | 12,500 |
| | 11,540 |
| | 421,441 |
|
Specific Performance PSU Award for CEO
In March 2012, the Committee granted an additional PSU award to the CEO covering 110,000 shares of Common Stock, with the actual number of shares earned contingent upon the achievement of specific Board- approved goals and objectives for (a) corporate performance objectives, involving specific outcomes and deliverables as agreed to with the Board related to Autodesk's strategic plan, and (b) management of executive talent (the “Specific Performance PSU Award”).
The number of shares of Common Stock the CEO could earn at the first annual vesting date and the related performance criteria for that award installment were as follows: | | | | | | Target Number of Shares of Common Stock | | Vesting Date | | Performance Measure | 18,500 | | March 25, 2013 | | Significant progress towards the design and implementation of a plan relating to management of executive talent | 18,500 | | March 25, 2013 | | Significant progress towards the implementation of the strategic plan for Autodesk |
If the Committee determined, in its sole discretion, that the CEO had not satisfied the applicable performance criteria before the applicable vesting date, this PSU award would be reduced or forfeited.
In March 2013, the Committee certified that (1) the CEO met 100% of the performance objectives for making significant progress toward the implementation of the strategic plan; and (2) the CEO met 85% of the performance objectives for making significant progress toward the design and implementation of a plan relating to management of executive talent. The CEO was therefore entitled to 18,500 shares for the first performance measure, and 15,725 shares for the second. The value of the earned shares for this Specific Performance PSU Award for the first year was $1,149,960.
After certifying these results, and considering stockholder feedback regarding the need for greater use of relative performance metrics for long-term executive compensation, in March 2013, the Committee amended this Specific Performance PSU Award so the second and third year performance periods will instead be based on attainment of revenue growth and non-GAAP operating margin targets as well as relative TSR, as described in the “Fiscal 2014 Equity Awards: New PSU Plan,” below.
RSU Awards
The shares of Common Stock subject to each of the time-based vesting RSU awards granted to the Named Executive Officers in fiscal 2013 vest in three equal annual installments from the date of grant.
Fiscal 2014 Equity Awards: New PSU Plan
In March 2013, the Committee granted RSU and PSU awards to the executive officers taking into account prior year (fiscal 2013) performance. In arriving at the total number of RSU awards and targeted PSU awards granted to each executive officer, the Committee considered the absolute and relative performance of Autodesk in fiscal 2013 and the individual performance of each of the executive officers. PSUs constituted 60% of the awards granted to the CEO, and 50% of the like.awards granted to the other Named Executive Officers. Specifically, the Committee granted equity awards to the Named Executive Officers in the following amounts:
Special Meeting Proxy Statement 35
| | | | | | | | Named Executive Officer | | Target Number of Shares Subject to PSU Award (#) | | Number of Shares Subject to RSU Award (#) | Carl Bass | | 126,000 |
| | 84,000 |
| Mark J. Hawkins | | 19,000 |
| | 19,000 |
| Jan Becker | | 13,000 |
| | 13,000 |
| Steve M. Blum | | 12,500 |
| | 12,500 |
| Pascal W. Di Fronzo | | 13,000 |
| | 13,000 |
| Amar Hanspal | | 15,000 |
| | 15,000 |
| Robert Kross | | 15,000 |
| | 15,000 |
|
The PSU awards are based on a new PSU plan that was adopted following the stockholder engagement that occurred after the 2012 Annual Meeting. The design of the new PSU awards align with areas identified by stockholders as being of most critical importance, namely relative TSR, multi-year measurement, and comparison of Autodesk performance to that of other companies.
The actual number of shares earned will vary based on the following general terms and conditions of the PSU awards:
The PSU awards provide for the grant of a maximum number of shares that will be paid out in Common Stock if applicable performance criteria have been met. The performance criteria are based upon annual revenue and non-GAAP operating margin goals adopted by the Committee (the “Annual Financial Results”), as well as TSR compared against the S&P Computer Software Select Index (“Relative TSR”). In each case, Annual Financial Results for the relevant performance period could result in PSU attainment, subject to the Relative TSR modifier, of 0%-150% of target. Once that Annual Financial Results percentage is established, it is multiplied by a percentage ranging from 80%-120% depending on Autodesk's Relative TSR performance for the period. Ultimately, PSUs could be earned from 0%-180% of target.
Each PSU covers a three year period:
| | ◦ | Up to one third of the PSU may vest following year one depending upon the achievement of Annual Financial Results for year one as well as 1 year Relative TSR (covering year one). |
| | ◦ | Up to one third of the PSU may vest following year two depending upon the achievement of Annual Financial Results for year two as well as 2 year Relative TSR (covering years one and two). |
| | ◦ | Up to one third of the PSU may vest following year three depending upon the achievement of Annual Financial Results for year three as well as 3 year Relative TSR (covering years one, two and three). |
Equity Incentive Deferral Plan. The
Prior to April 2013, Autodesk maintained the Autodesk, Inc. Equity Incentive Deferral Plan (the “Deferral Plan”) encourages our executive officers to maintain equity ownership in the Company, which we believe aligns the interests of our executive officers with those of our stockholders.. Under the Deferral Plan, eligible executive officers including certain Named Executive Officers, maywere able to elect to defer up to 50% of their cash incentive awardawards earned under the short-term cash incentive plan,Fiscal 2013 EIP, and have any such deferred amounts granted in the form of restricted stock unitsRSU awards (the “Base RSUs”RSU Award”). The Base RSUs areRSU Award was fully vested as of the date of grant and havehad a distribution date on or about the third anniversary of the grant date. As an incentive for participating in the Deferral Plan, for every three shares of Common Stock subject to a Base RSUsRSU Award purchased by a participating executive the Company issuesofficer, Autodesk agreed to grant a second RSU award covering one additional restricted stock unitshare of Common Stock (the “Premium RSUs”RSU Award”). The Premium RSUs are granted with aRSU Awards had vesting datedates and a distribution datedates on or about the third anniversary of the grant date.Executive officers may makedates.
As a result of the changes to the design of the overall long-term incentive compensation awards, including an election to participateincreased emphasis on RSU awards and PSU awards, in September 2012 the Committee terminated the Deferral Plan, effective April 2013. While awards granted prior to that date will continue to be honored under the terms and conditions described above, the executive officers no laterlonger have the ability to elect to defer their cash incentive awards. Executive Benefits
Welfare and Other Employee Benefits
Autodesk has established a tax-qualified Section 401(k) retirement plan for all employees who satisfy certain eligibility requirements, including requirements relating to age and length of service. The plan is intended to qualify under Section 401(a) of the Code so that contributions by employees to the plan, and income earned on plan contributions, generally are not taxable to employees until withdrawn.
In addition, other benefits provided to the executive officers are the same as those provided to all of Autodesk's full-time employees. These benefits include medical, dental, and vision benefits, health and dependent care flexible spending accounts, short-term and long-term disability insurance, accidental death and dismemberment insurance, and basic life insurance coverage. Autodesk also makes contributions to health savings plans on behalf of any employee who is a participant in a plan with a high deductible feature.
Special Meeting Proxy Statement 36
Perquisites and Other Personal Benefits
Autodesk does not, as a general practice, provide material benefits or special considerations to the executive officers that it does not provide to other employees. From time to time, when deemed appropriate by the Committee, Autodesk provides certain executive officers perquisites and other personal benefits that are either competitively prudent or in Autodesk's best interest. In fiscal 2013, Mr. Hawkins, Executive Vice President and Chief Financial Officer, received certain living expenses due to the distance between his home and Autodesk's headquarters. Please see “Executive Compensation-Summary Compensation Table and Narrative Disclosure,” on page 43 for the aggregate amount of such perquisites. In addition, certain other non-material perquisites were provided to certain Named Executive Officers, as noted in the “Executive Compensation-Summary Compensation Table and Narrative Disclosure,” on page 43.
Employment Agreements and Post-Employment Compensation
Employment Agreement with the CEO
Autodesk entered into an amended and restated employment agreement with Carl Bass, President and Chief Executive Officer on March 8, 2012. Throughout fiscal 2013, this agreement provided general protection for Mr. Bass in the event of termination without cause or resignation for good reason (including change of control). Mr. Bass's employment agreement was a valuable tool to retain his services during fiscal 2013. The protections afforded to him in the event of a change of control provide Autodesk with an increased level of confidence that he will remain with Autodesk up to and for some period of time after a change of control. This in turn provides continuity in the event of a change in control, which may ultimately enhance stockholder value, and discourages benefits simply for consummating a change in control. This employment agreement was further amended and restated on March 21, 2013. Details of the agreements for Mr. Bass can be found beginning on page 50.
Change in Control Program
To ensure the continued service of key executive officers in the event of a potential change in control of Autodesk, the Board has adopted the Autodesk, Inc. Executive Change in Control Program. Each of the Named Executive Officers, other than the endCEO, among other employees, is a participant in the Executive Change in Control Program. The payments and benefits available under the Executive Change in Control program are designed to encourage the Named Executive Officers' continued services in the event of the calendar year immediately priora potential change in control of Autodesk and to the yearallow for a smooth leadership transition upon a change in which such servicescontrol transaction. Further, these arrangements are intended to be performed.Equity Grant Policies. Our Board of Directors has established the following policies to govern the granting of equity awards:
Equity Grant Policies
Limitation on Number of Equity Awards Granted
| For fiscal 2011, the aggregate number of shares underlying equity awards granted under our 2008 Employee Stock Plan was limited to no more than 3.5% of our outstanding Common Stock as of the end of fiscal 2010. |
| The 3.5% limitation calculation was based on total (“gross”) awards and is not net of cancellations or forfeitures. In calculating whether the 3.5% limitation had been reached, no equity awards issued in connection with a merger, acquisition, or similar business combination or the appointment of new senior executive officers, such as a chief executive officer, chief financial officer, or chief operating officer, were included in the calculation for total shares granted. In addition, each restricted stock unit granted is counted as two shares toward this limitation. |
| For fiscal 2011, the aggregate number of equity grants represented less than 3.5% of our common shares outstanding as of January 31, 2010. |
Prohibition Against Stock Option Repricing
| Repricing of stock options is prohibited without stockholder approval. This restriction exists in all of our equity plans, including our 2008 Employee Stock Plan, as amended and restated, and 2010 Outside Directors’ Stock Plan. A similar policy was in place for our prior employee equity compensation plan. |
Nonstatutory Stock and Incentive Stock Options
| In general when issuing options, we issue only nonstatutory stock options to employees and executive officers, with the exception of grants to those executive officers subject to the stock ownership guidelines described below. |
| We have limited our use of incentive stock options (ISOs) because of the heavier financial burden they place on the Company. However, because ISOs provide special tax advantages to the recipient if the stock is held for a certain period of time following exercise, we provide ISOs to certain executive officers to facilitate their meeting our stock ownership guidelines discussed below. ISOs are granted to these few individuals only to the extent allowable by applicable Internal Revenue Code limits. Any excess options are nonstatutory stock options. |
Stock Option Grant Exercise Price
| For fiscal 2011, the exercise price for stock equity grants equaled the fair market value of the Company’s Common Stock on the date of grant. This is defined as the closing price quoted on the NASDAQ Global Select Market on the grant date. |
Stock Grant Vesting and Expiration
| All stock options granted in fiscal 2011 vest according to the nature of the grant and the level of the recipient. All stock options granted to executive officers in fiscal 2011, expire seven years from the date of grant. Grants made under the amended 2008 employee stock plan have 10 year terms. |
| • | | Executive Officer and all other vice president stock equity grants (new hire, promotion and performance grants) have four-year
|
| vesting, with one-fourth of the total grant vesting on each grant anniversary date for four years.
|
| • | | Other non-vice president stock equity grants have three-year vesting, with one-third of the total grant vesting on each grant anniversary date for three years.
|
| • | | Standard new hire stock equity grants (50 to 100 shares, depending on country)vest in full on the one-year anniversary of the grant date.
|
| Typically, other than “base RSUs” acquired in exchange for cash otherwise payable under our short-term cash incentive plan, restricted stock units granted to our executive officers vest in full on or about the third anniversary of the grant date. |
Stock Ownership Guidelines for Executive Officers and Prohibition on Hedging
| The Board of Directors believes that stock ownership by executive officers is important to tie the risks and rewards inherent in stock ownership of the Company to our executive officers. Consequently, the Board of Directors has adopted voluntary guidelines for executive officer stock ownership. These voluntary ownership guidelines provide that executive officers are encouraged to hold a fixed number of shares for each level of executive officer rather than a multiple of salary. This requirement is intended to create clear guidelines that tie a portion of our executive’s net worth to the performance of our stock price. |
| The current stock ownership guidelines are as follows: |
| | | | | Position
| | Ownership Guidelines | | Chief Executive Officer
| | | 100,000 shares | | Executive Vice President
| | | 30,000 shares | | Senior Vice President
| | | 15,000 shares | |
| These voluntary stock ownership guidelines are applicable only to those executive officers who are also subject to Section 16 of the Exchange Act. Our executive officers have four years from either December 2008 or the promotion to a new, higher-level position, whichever is later, to achieve the recommended levels of stock ownership to comply with these voluntary stock ownership guidelines. The executive can achieve the recommended levels through exercising vested stock options or by purchasing stock either in the open market or through the Employee Stock Purchase Plan. For purposes of achieving the voluntary stock ownership guidelines, both vested and unvested restricted stock and restricted stock units are counted towards the voluntary guidelines. |
| As of the end of our fiscal 2011, all Named Executive Officers met the voluntary stock ownership guidelines outlined above. |
| Under the Company’s insider trading policy, all members of the Board of Directors and executive officers are prohibited from trading put and call options relating to the Company’s stock, or in making “short sales” of the Company’s stock. |
In fiscal 2011, stock options and restricted stock units were the only equity grants made to our executive officers. At its March 2010 meeting, the Compensation Committee reviewed the factors discussed above and awarded optionsprovide incentives to the Named Executive Officers based on individual performanceto execute the wishes of the Board, even in the event that the Board takes an action that may result in the elimination of a Named Executive Officer's position.
The Executive Change in Control Program serves as a valuable tool to retain the services of executive officers in the event of a potential transaction and grant valuesprovides an increased level of our peergroupconfidence that the executive officers will remain with Autodesk for comparablesome period of time after a change in control. This provides continuity in the event of a change in control transaction, which may ultimately enhance stockholder value, and discourages payments and benefits simply for consummating a change in control transaction. Payment and benefits under the Executive Change in Control Program are provided only in the event of a qualifying termination of employment following a change in control (“double trigger.”) Autodesk does not offer tax reimbursement or “gross-up” payments under the Executive Change in Control Program.
The material terms and conditions of the Executive Change in Control Program, as well as an estimate of the potential payments and benefits payable in the event of a termination of employment in connection with a change in control of Autodesk, are set forth in “Change in Control Arrangements and Employment Agreements” below.
Other Compensation Policies
Mandatory Stock Ownership Guidelines
The Board believes that stock ownership by the executive officers is important to tie the risks and rewards inherent in stock ownership to the executive officers. In March 2010,Consequently, in fiscal 2013 the Compensation Committee also approved grantsBoard adopted mandatory guidelines for stock ownership by executive officers, replacing the previous voluntary ownership guidelines. During fiscal 2013, these mandatory ownership guidelines required all executive officers to hold a fixed number of shares of Autodesk's Common Stock at the appropriate executive officer level. This is intended to create clear guidelines that tie a portion of the executive officer's net worth to the performance of Autodesk's stock price. The current stock ownership guidelines are as follows: | | | | | | | | | | CEO | | Executive Vice President | | Senior Vice President | Minimum number of shares to be owned | | 100,000 | | 30,000 | | 15,000 |
Executive officers have four years from the later of either (i) December 2013 or (ii) their promotion to a new, higher-level position to satisfy the required level of stock ownership. An executive officer can satisfy his or her required ownership level through exercising vested options
Special Meeting Proxy Statement 37
to purchase shares of Common Stock or by purchasing shares of Common Stock in the open market or through the Autodesk, Inc. Employee Qualified Stock Purchase Plan. For purposes of satisfying the required stock ownership level, both vested and unvested shares of restricted stock units in connection withand shares of Common Stock subject to outstanding RSU awards are counted as owned.
As of the Equity Incentive Deferral Plan described below, for short-term cash incentives awards made in March 2011, relating toend of fiscal 2011. Please see “Executive Compensation—Grants2013, each of Plan-Based Awards in Fiscal 2011,” below for grants made to our Named Executive Officers during fiscal 2011.Pay Mix
In order to focus our executive officers on achieving superior annual and long-term performance, we have structured our executive officers’ compensation mix so that the majority of their compensation is contingent on achieving or surpassing our annual goals and achieving superior returns for our stockholders. In fact in fiscal 2011, short-term annual incentives increased as a proportion of total compensation mix.
Total Annual Cash Compensation
Total annual cash compensation is made up of a base salary and the short-term cash incentives described above. The ratio of an executive’s base salary and short-term cash incentive target reflects the strong importance that we place on superior performance and achievement. Most of our Named Executive Officers have a significant portion of his or her annual eligible cash compensation contingent on corporate and individual performance and that portion was increased in fiscal 2011.
Total Equity Incentive Compensation
In addition, we want our executive officers focused on long-term achievements that build value for our stockholders. Consistent and prolonged appreciation of our stock price and the building of Company market capitalization are key measures of success. We use stock option and restricted stock unit awards to align our executive officers and their efforts with the goals and interests of our stockholders. Because our executive officers and their decisions and judgment are critical to our long-term success, the majority of their overall compensation is aligned with Company and stockholder value creation.
Actual Pay Mix for Fiscal 2011
For fiscal 2011, the pay mix of our three components of compensation for the Named Executive Officers is shown below.satisfied the mandatory stock ownership guidelines.
Compensation Recovery Policy
Autodesk has not yet implemented a policy regarding retroactive adjustments to any cash or equity-based incentive compensation paid to executive officers and other employees where the payments were predicated upon the achievement of financial results that were subsequently the subject of a financial restatement. The pay mixBoard intends to adopt a general compensation recovery, or clawback, policy covering annual and long-term incentive award plans and arrangements once the SEC adopts final rules implementing the requirement of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Derivatives Trading and Hedging Policy
Executive officers, members of the Board, and all other employees are prohibited from investing in derivative securities related to Autodesk's Common Stock and engaging in short sales or other short-position transactions in shares of Autodesk's Common Stock. This policy does not restrict ownership of company-granted awards, such as options to purchase shares of Common Stock or PSU or RSU awards, which have been granted by the Committee. Autodesk's insider trading policy prohibits the trading of derivatives or the hedging of Autodesk's common equity securities by all employees, including the executive officers, and members of the Board.
Equity Award Grant Policy
All equity awards granted to the executive officers are approved by the Committee. Approval of the annual equity awards for the executive officers occurs at the Committee's regularly-scheduled quarterly meetings.
Regulatory Considerations and Practices
Autodesk continuously reviews and evaluates the impact of the tax laws and accounting practices and related interpretations on the executive compensation program. For example, the Committee considers Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC Topic 718”), which results in recognition of compensation expense for share-based payment awards, and Section 409A of the Code, which impacts deferred compensation arrangements, as it evaluates, structures, and implements changes to the program.
Deductibility Limitation
Section 162(m) of the Code generally reflects our objective of providing a large portion of our executive officers’ compensation through long-term equity compensation. Naturally, this mix varies depending on a number of factors, including stock price changes, overall Company performance and individual performance. Amounts in the chart below are based on what was paid or granted during fiscal 2011. Base salary islimits the amount of remuneration that a company may deduct for federal income tax purposes in any taxable year with respect to the CEO and each of the next three most highly-compensated executive officers (excluding the chief financial officer) to $1 million. Generally, remuneration in excess of $1 million may only be deducted if it is “performance-based compensation” within the meaning of the Code or satisfies the conditions of another exemption from the deduction limit. The compensation income realized upon the exercise of options to purchase shares of Common Stock granted under a stockholder-approved employee stock plan generally will be deductible so long as the options are granted by a committee whose members are non-employee directors and certain other conditions are satisfied.
The Autodesk Executive Incentive Plan and the 2012 Employee Stock Plan are structured with the intention that awards granted under these plans could qualify for tax deductibility. However, to maintain flexibility and promote simplicity in the administration of these arrangements, other compensation that may be awarded under these plans, such as annual incentive cash payments and PSU and RSU awards, are sometimes not designed to qualify for tax deductibility under the Code.
Further, while mindful of the benefit of full deductibility of the remuneration paid to senior executive officers, the Committee believes that Autodesk should not be constrained by the requirements of Section 162(m) where those requirements would impair flexibility in compensating the executive officers in a manner that can best promote Autodesk's objectives, which aligns the executive officers' interests with the stockholders' interests. Therefore, Autodesk has not adopted a policy that requires all compensation to be deductible. The Committee intends to continue to compensate the executive officers in a manner consistent with Autodesk's best interests and the best interests of the stockholders.
Taxation of Deferred Compensation
Section 409A of the Code imposes significant additional taxes in the event an executive officer, director, or service provider receives “deferred compensation” that does not satisfy the restrictive conditions of the provision. Section 409A applies to a wide range of compensation arrangements, including traditional nonqualified deferred compensation plans, certain equity awards, and severance
Special Meeting Proxy Statement 38
arrangements. To assist employees with avoiding additional taxes under Section 409A, Autodesk has structured equity awards in a manner intended to comply with the applicable Section 409A conditions.
Taxation of “Golden Parachute” Payments
Sections 280G and 4999 of the Code provide that executive officers and directors who hold significant equity interests and certain other service providers may be subject to an excise tax if they receive payments or benefits in connection with a change in control that exceeds certain prescribed limits. In addition, the relevant company, or a successor may forfeit a deduction on the amounts subject to this additional tax. Autodesk did not provide any executive officer with a “gross-up” or other reimbursement payment for any tax liability that he or she might owe as a result of the application of Sections 280G or 4999 during fiscal 2013, and has not agreed and is not otherwise obligated to provide any Named Executive Officer’s actual annual base salary. Short-term cash incentiveOfficer with such a “gross-up” or other reimbursement or to otherwise address the application of Sections 280G or 4999 in connection with payments or benefits arising from a change in control.
Accounting for Stock-Based Compensation
Autodesk follows ASC Topic 718 for stock-based compensation awards. ASC Topic 718 requires Autodesk to measure the compensation expense for all share-based payment awards made to employees, including executive officers, and members of the Board, including options to purchase shares of Common Stock, based on the grant date “fair value” of these awards. Fair value is the actual short-term cash incentive payoutcalculated for accounting purposes and certain separation agreement paymentsreported in the case of Mr. Bado. Long-term equity incentive amounts represent aggregate grant date faircompensation tables below, even though the executive officers and directors may never realize any value of awards computed in accordance with FASBfrom their awards. ASC Topic 718Compensation—Stock Compensation (“ASC 718”). These amounts do not necessarily correspond also requires Autodesk to recognize the actual valuecompensation cost of these share-based payment awards in the income statements over the period that will be realized byan employee or director is required to render service in exchange for the Named Executive Officers upon exercisestock option or saleother award.
Report of the awards. In addition, our officers may from time to time receive other compensation as described in more detail in “Executive Compensation—Summary Compensation Table and Narrative Disclosure,” below.Long-term equity incentive compensation constitutes the largest single component of compensation of our Named Executive Officers’ overall compensation in fiscal 2011. For our Named Executive Officers, overall cash compensation for fiscal 2011 was more heavily weighted towards short-term incentives than base pay. This mix between fixed base salary and cash incentives is consistent with our pay-for-performance philosophy and is comparable to that for similar positions reviewed in our peer group.
Perquisites and Other Benefits – Design and Practices
| | | Program
| | Summary Description
|
Benefits
| We offer a variety of benefits programs to all employees, including executive officers. The benefits that our executive officers receive are the same as those of other full-time employees in the same geography. |
| For example, in the United States, benefits include medical, vision, dental, employee and dependent life insurance, employee and dependent accidental death and dismemberment insurance, short-term disability, long-term disability, and financial programs such as a 401(k) plan and flexible spending accounts. We also reimburse employees for certain types of relocation expenses. |
Nonqualified Deferred Compensation
| United States-based executive officers are eligible to participate in our Nonqualified Deferred Compensation Plan. The plan is designed to allow eligible employees to make pretax contributions through compensation deferrals to the plan and receive tax-deferred investment returns on the contributions similar to the 401(k) plan. |
| This benefit is incremental to the 401(k) plan and is available to a limited group of United States-based officers and high level managers. The assets of our Nonqualified Deferred Compensation Plan are held in a rabbi trust. Similar to the 401(k) plan, earnings are not guaranteed. |
Perquisites
| From time to time, when deemed appropriate by the Compensation Committee, we provide certain executive officers perquisites that we believe are either competitively prudent or in the Company’s best interest. |
| In fiscal 2011, we provided Mr. Hawkins, our Executive Vice President and Chief Financial Officer, with certain living expenses due to the distance between his home, at the time we hired him in fiscal 2011, and the Company’s headquarters. Please see “Executive Compensation—Summary Compensation Table and Narrative Disclosure,” below for the aggregate amount of such perquisites. In addition, certain other non-material perquisites were provided to certain Named Executive Officers, as noted in the “Executive Compensation—Summary Compensation Table and Narrative Disclosure,” below. Otherwise, we do not, as a general practice, provide material benefits or special considerations to our executive officers that we do not provide to other employees. |
Tax and Accounting Considerations
In designing our compensation programs, we have considered tax and accounting implications, including the following.
| | | Program
| | Tax and Accounting Consideration
|
Accounting for Stock-Based Compensation
| We account for stock-based compensation in accordance with the requirements of ASC 718. We also take into consideration ASC 718 and other generally accepted accounting principles in determining changes to policies and practices for our stock-based compensation programs. |
Executive Change in Control Program
| We have structured our Executive Change in Control program so that in the event payment of benefits constitutes a “parachute” payment under Section 280G of the Internal Revenue Code, we will revise and limit the payment so that we do not incur additional tax burden on behalf of the participant. For more information, refer to the “Executive Change in Control Program” section on page 52. |
Short-term Cash Incentive Plan
| The short-term cash incentive plan is structured so that if so desired by the Committee, the plan can comply with the requirements of Section 162(m) of Internal Revenue Code, which allow certain payments under the plan to be deductible for federal income tax purposes. |
| As discussed above, in fiscal 2011, the tax benefits otherwise available under our short-term cash incentive plan were not available to us, because we did not meet the conditions required under Section 162(m) of the Internal Revenue Code. |
Equity Incentive Deferral Plan
| The Equity Incentive Deferral Plan is structured to comply with the requirements of Section 409A of the Internal Revenue Code, which imposes limitations and conditions on nonqualified deferred compensation plans and arrangements, including requirements relating to when amounts under such plans may be made, acceleration of benefits, and the timing of elections under such plans. |
Post-Employment Obligations
| | | Obligation
| | Summary Description
|
Employment Agreement with Mr. Bass
| The Company has entered into an employment agreement with Carl Bass, our Chief Executive Officer and President. Throughout fiscal 2011, this agreement provided general protection for Mr. Bass in the event of termination without cause or resignation for good reason (including change of control). We believe that Mr. Bass’s employment agreement provided a valuable tool to retain his services during fiscal 2011. We believe that the protections afforded to him in the event of a change of control provide us with an increased level of confidence that he will remain with the Company up to and for some period of time after a change of control. This in turn provides continuity in the event of a change in control, which we believe may ultimately enhance stockholder value, and discourages benefits simply for consummating a change in control in the Company. Details of the agreements for Mr. Bass can be found beginning on page 53. |
Change in Control Program
| In March 2006, the Board of Directors approved an amended Executive Change in Control Program, in an effort to ensure the continued service of our key executive officers in the event of a future change of control of the Company. In December 2008, the Board of Directors approved an amended and restated Executive Change in Control Program which updated the Executive Change in Control Program approved in March 2006 to conform to certain new tax provisions. Further amendments were made in December 2010. Each Named Executive Officer, among other employees, participates in the Executive Change in Control Program. |
| We believe that the Executive Change in Control Program provides us with a valuable tool to retain the services of our executive officers and provides us with an increased level of confidence that our executive officers will remain with the Company for some period of time after a change in control. This in turn provides continuity in the event of a change in control, which we believe may ultimately enhance stockholder value, and discourages benefits simply for consummating a change in control of the Company. We do not provide any gross-up payments in our Executive Change in Control Program. |
Separation Agreement with Ken Bado
| Pursuant to the terms and conditions of a Separation Agreement, effective as of January 31, 2011, Mr. Bado’s service as the Executive Vice President, Sales and Services of the Company terminated. Mr. Bado continued as an employee providing transitional services through March 28, 2011. Mr. Bado received (a) a lump-sum severance payment of $55,385, equal to six weeks of Mr. Bado’s current base salary, in connection with Mr. Bado’s release of claims against the Company; (b) continued salary, vesting and employee health care benefits through March 28, 2011, in connection with Mr. Bado’s transitional services to the Company; and (c) a special payment of $362,692, equal to twenty-three weeks of Mr. Bado’s current base salary plus target variables, payable in two equal payments of $181,346 on each of September 1, 2011 and January 31, 2012, in connection with continued compliance with the terms of the Separation Agreement, including certain non-competition and non-solicitation obligations undertaken by Mr. Bado. |
| Please see “Executive Compensation—Change in Control Arrangements and Employment Agreements,” below for more information regarding the Employment Agreement with Mr. Bass, the Executive Change in Control Program, the Separation Agreement with Ken Bado, and potential payments in connection with terminations occurring after a change in control. |
Compensation Committee Report
The Compensation and Human Resources Committee of the Board of Directors, which is comprised solely of independent members of the Board of Directors, assists the Board in fulfilling its responsibilities regarding compensation matters and, pursuant to its Charter, is responsible for determining the compensation of Autodesk's executive officers. The Compensation and Human Resources Committee has reviewed and discussed the Compensation Discussion and Analysis included in this Proxy Statement as required by Item 402(b) of Regulation S-K with Autodesk's management and, basedteam. Based on suchthis review and discussions,discussion, the Compensation and Human Resources Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.
| | | COMPENSATION AND HUMAN RESOURCES COMMITTEE OF THE BOARD OF DIRECTORS | | Steven M. West, Chairman | Per-Kristian Halvorsen | Mary T. McDowell, Chair | Tom Georgens | Stacy J. Smith |
Compensation Committee Interlocks and Insider Participation No
The current members of the Compensation and Human Resources Committee are Mary T. McDowell, Tom Georgens and Stacy J. Smith. Per-Kristian Halvorsen served as a member of the Compensation and Human Resources Committee through June 7, 2012, the date of our 2012 Annual Meeting of Stockholders, and Steven M. West served as a member of the Compensation and Human Resources Committee through June 13, 2013, the date of our 2013 Annual Meeting of Stockholders. No director who served as a member of the Compensation and Human Resources Committee during fiscal 2013 or fiscal 2014 is or was formerly an officer or employee of Autodesk or any of its subsidiaries. No interlocking relationship exists between any director who served as a member of ourthe Compensation and Human Resources Committee during fiscal 2013 or fiscal 2014 and the compensation committee of any other Company,company, nor has any such interlocking relationship existed in the past.
Special Meeting Proxy Statement 39
Compensation Practices and Risk
Our Compensation Committee, in consultation with Pay Governance, has reviewed and discussed the concept of risk as it relates to our compensation program and the Committee does not believe our compensation program encourages excessive or inappropriate risk taking for the following reasons:
Our use of different types of compensation vehicles that provide a balance of long and short-term incentives with fixed and variable components.
Our stock options and restricted stock units typically vest over a multi-year period, and our stock options remain exercisable from four to ten years from the date of grant, encouraging participants to look to long-term appreciation in equity values.
The metrics used to determine the amount of a participant’s short-term cash incentive under our short-term cash incentive plan included Company-wide metrics. These Company-wide metrics include revenue and operating margin financial measures, which encourages profitable revenue.
Our Compensation Committee retains discretion to modify, reduce or to eliminate short-term cash incentives that would otherwise be payable based on actual financial performance.
Our system of internal control over financial reporting, code of business conduct, and whistle-blower program, among other things, reduce the likelihood of manipulation of our financial performance to enhance payments under our short-term cash incentive plan.
In order to focus our employees on achieving superior annual and long-term performance, we have structured the compensation mix of our employees so that a meaningful amount of their compensation is contingent on achieving or surpassing our annual goals and achieving superior returns for our stockholders.
Summary Compensation Table and Narrative Disclosure
This narrative discussion, as well as the table and footnotes below, provide a summary ofsummarizes our Named Executive Officers’ compensation for the fiscal years ended January 31, 2011, 20102013, 2012 and 2009.2011. The Named Executive Officers are Carl Bass (Chief(President and Chief Executive Officer and President)Officer), Mark J. Hawkins (Executive Vice President and Chief Financial Officer), and the next three most highly compensated individuals who were servingas executive officers of Autodesk on January 31, 2011, 2013, the last day of our most recent fiscal year. In addition, Amar Hanspal (Senior Vice President, Information Modeling and Platform) and Robert Kross (Senior Vice President, Design, Lifecycle and Simulation) served as executive officers during fiscal 2013 and are Named Executive Officers for fiscal 2013. For information on our compensation objectives, see the discussion under the heading “Compensation Discussion and Analysis.”
Salary
Salary—Named Executive Officers are paid a salary which reflects the dollar value of cash base salary earned by each executive during the relevant fiscal year.cash-based salary. We did not provide equity or other non-cash items to our Named Executive Officers as salary compensation during fiscal 2013, 2012 and 2011 2010 or 2009..
Bonus
This column represents payments made to our Named Executive Officers for amounts that relate to: Autodesk and individual performance under the Autodesk, Inc. Incentive Performance plan; signing bonuses, as in the case of Mr. Hawkins, who received a sign-on bonus paid in two equal $100,000 installments, one of which was paid in fiscal 2011; and other miscellaneous payments, such as payments made in recognition of years of service as part of an Autodesk company-wide program.
Stock Awards and Option Awards—The value
Amounts shown in these columns do not reflect compensation actually received by our Named Executive Officers. Instead, the amounts reported represent the aggregate grant date fair values of performance-based restricted stock unit (“PSU”) awards, restricted stock unit (“RSU”) awards and option awards, included in the “Stock Awards” and “Option Awards” columns of the following table represents the grant date fair value of stock and option awards granted during the fiscal year.as determined pursuant to FASB ASC Topic 718. The assumptions used in the valuation of these awards are set forth in Note 1, “Business and Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements in our fiscal year 20112013 Annual Report on Form 10-K filed on March 18, 2011. These amounts do not correspond to the actual value that will be realized by the Named Executive Officers upon the vesting of restricted stock units, the exercise of stock options, or the sale of the Common Stock underlying such awards.2013.
Equity and Non-Equity Incentive Plan Compensation—
Non-equity incentive plan compensation represents (1) amounts earned for services performed during the relevant fiscal year pursuant to our short-term cash incentive plan (EIP) for all executive officers shown except for Mr. Bado, and (2) amounts earned for services performed by Mr. Bado pursuant to Autodesk’s short-term cash incentive plan and for sales commissions earned, as shown below.shown. Amounts earned under our short-term cash incentive plan are paid in cash unless a participant elects to defer a portion of the earned amount as restricted stock; seeRSUs. (See note (e)(f) below and “Compensation Discussion and Analysis—Equity Grant Practices,”Analysis” above for more information on these deferrals. ) The amounts shown in the Non-Equity Incentive Plan Compensation column below reflect the total cash amounts awarded and theawarded. The amounts shown in the Equity Incentive Deferral Plan Compensation column reflect the grant date fair value of restricted stock unitsRSUs granted in lieu of cash due to the participant’s decision to defer into restricted stock unitsRSUs a portion of the total short-term cash incentive plan (EIP) amount awarded. Cash amounts awarded under the short-term cash incentive plan (EIP)EIP are awarded and payable in the first quarter of the following fiscal year.
All Other Compensation—
This column represents all other compensation for the relevant fiscal year not reported in the previous columns, such as payment of relocation and temporary housing expenses, reimbursement of certain tax expenses, Autodesk’s matching contributions to pre-tax savings plans, insurance premiums, personal gifts and related tax gross ups. Generally, unless the items included in this category exceed the greater of $25,000 or 10 percent10% of the total amount of perquisites received by such Named Executive Officer, each individual perquisite is not separately identified and quantified.
Special Meeting Proxy Statement 40
The Summary Compensation Table below presents information concerning the total compensation of our Named Executive Officers for the fiscal years ended January 31, 2011, 20102013, 2012 and 2009. Mr. Hawkins and Mr. Bhatt were2011. Ms. Becker was not a Named Executive Officers prior toOfficer in fiscal 2010; therefore, their2012 and fiscal 2011, so her compensation information is not presented for fiscal 2009.those periods. Mr. Di FronzoBlum was not a Named Executive Officer prior to fiscal 2011; therefore,2012, so his compensation information is not presented for fiscal 2010 or2011. Mr. Hanspal was not a Named Executive Officer prior to fiscal 2009. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Fiscal Year | | | Salary ($) | | | Bonus ($) | | | Stock Awards ($) | | | Option Awards ($) | | | Equity Incentive Plan Compensation ($) (e) | | | Non-Equity Incentive Plan Compensation ($) | | | All Other Compensation ($) | | | Total ($) | | | | | | | | | | | | Carl Bass, Chief Executive Officer and President (a) | | | 2011 2010 2009 | | | $ | 920,769 825,000 883,333 | | | $
| —
— — |
| | $ | — 562,560 1,447,040 | | | $ | 3,704,727 4,028,094 4,466,280 | | | $
| —
— — |
| | $ | 1,429,000 810,000 775,000 | | | $ | 6,184 5,262 4,078 | | | $ | 6,060,680 6,230,916 7,575,731 | | | | | | | | | | | | Mark J. Hawkins, Executive Vice President and Chief Financial Officer (b) | | | 2011 2010 | | | | 531,058 383,553 | | | | 100,000 100,000 | | | | — 627,610 | | | | 712,447 1,222,065 | | | | 333,306 — | | | | 250,000 350,000 | | | | 78,943 107,090 | | | | 2,005,754 2,790,318 | | | | | | | | | | | | George M. Bado, Former Executive Vice President, Sales and Services (c) | | | 2011 2010 2009 | | | | 491,077 440,000 480,000 | | |
| —
— — |
| | | — 152,360 380,800 | | | | 664,951 727,264 691,509 | | | | — 33,306 49,992 | | | | 651,575 592,281 352,939 | | | | 519,832 56,690 230,500 | | | | 2,327,435 2,001,901 2,185,740 | | | | | | | | | | | | Jay Bhatt, Senior Vice President, Architecture, Engineering & Construction | | | 2011 2010 | | | | 448,718 320,833 | | |
| —
— |
| | | — 152,360 | | | | 949,930 778,425 | | | | 266,628 199,951 | | | | 200,000 150,000 | | | | 6,029 46,259 | | | | 1,871,305 1,647,828 | | | | | | | | | | | | Pascal W. Di Fronzo, Senior Vice President, General Counsel and Secretary (d) | | | 2011 | | | | 390,500 | | | | — | | | | — | | | | 569,958 | | | | — | | | | 340,000 | | | | 27,108 | | | | 1,327,566 | |
2013 so his compensation information is not presented for prior periods. | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Fiscal Year | | Salary ($) | | Bonus ($)(d) | | Stock Awards ($) (e) | | Option Awards ($) | | Equity Incentive Deferral Plan Compensation ($) (f) | | Non-Equity Incentive Plan Compensation ($) | | All Other Compensation ($) | | Total ($) | Carl Bass, | | 2013 | | 991,000 |
| | 1,142,213 |
| | 7,269,000 |
| | — |
| | — |
| | — |
| | 4,196 |
| | 9,406,409 |
| President and Chief | 2012 | | 945,192 |
| | 950 |
| | 8,762,000 |
| | 4,386,870 |
| | — |
| | 1,300,000 |
| | 4,202 |
| | 15,399,214 |
| Executive Officer | 2011 | | 920,769 |
| | — |
| | — |
| | 3,704,727 |
| | — |
| | 1,429,000 |
| | 6,184 |
| | 6,060,680 |
| Mark J. Hawkins, | | 2013 | | 571,076 |
| | 394,583 |
| | 1,186,900 |
| | — |
| | — |
| | — |
| | 51,553 |
| | 2,204,112 |
| Executive Vice President and | 2012 | | 547,885 |
| | — |
| | 1,173,588 |
| | 402,130 |
| | 226,889 |
| | 289,800 |
| | 100,582 |
| | 2,740,874 |
| Chief Financial Officer (a) | 2011 | | 531,058 |
| | 100,000 |
| | — |
| | 712,447 |
| | 333,306 |
| | 250,000 |
| | 78,943 |
| | 2,005,754 |
| Jan Becker, | | 2013 | | 395,557 |
| | 275,289 |
| | 913,000 |
| | — |
| | — |
| | — |
| | 4,095 |
| | 1,587,941 |
| Senior Vice President, | | | | | | | | | | | | | | | | | | Human Resources and Corporate Real Estate | | | | | | | | | | | | | | | | | | Steven M. Blum, | | 2013 | | 428,269 |
| | 157,860 |
| | 1,186,900 |
| | — |
| | — |
| | 233,873 |
| | 16,438 |
| | 2,023,340 |
| Senior Vice President, | | 2012 | | 378,080 |
| | — |
| | 1,666,450 |
| | 731,145 |
| | — |
| | 392,754 |
| | 13,467 |
| | 3,181,896 |
| Worldwide Sales and Services (b) | | | | | | | | | | | | | | | | | | | Pascal W. Di Fronzo, | | 2013 | | 424,961 |
| | 294,206 |
| | 913,000 |
| | — |
| | — |
| | — |
| | 4,106 |
| | 1,636,273 |
| Senior Vice President, | 2012 | | 388,096 |
| | — |
| | 1,173,588 |
| | 402,130 |
| | — |
| | 350,000 |
| | 11,956 |
| | 2,325,770 |
| General Counsel and Secretary | 2011 | | 390,500 |
| | — |
| | — |
| | 569,958 |
| | — |
| | 340,000 |
| | 27,108 |
| | 1,327,566 |
| Amar Hanspal, | | 2013 | | 407,173 |
| | 280,361 |
| | 1,168,640 |
| | — |
| | — |
| | — |
| | 7,268 |
| | 1,863,442 |
| Senior Vice President, | | | | | | | | | | | | | | | | | | | Information Modeling and Platform | | | | | | | | | | | | | | | | | | | Robert Kross, | | 2013 | | 395,557 |
| | 273,439 |
| | 913,000 |
| | — |
| | — |
| | — |
| | 11,920 |
| | 1,593,916 |
| Senior Vice President, | | 2012 | | 378,077 |
| | — |
| | 1,173,588 |
| | 402,130 |
| | — |
| | 325,000 |
| | 16,010 |
| | 2,294,805 |
| Design, Lifecycle and Simulation (c) | | 2011 | | 369,692 |
| | — |
| | — |
| | 569,958 |
| | — |
| | 350,000 |
| | 4,686 |
| | 1,294,336 |
|
_____________ | | (a) | Mr. Bass was Interim Chief Financial Officer from August 14, 2008 through April 26, 2009. |
(b) | Mr. Hawkins became Executive Vice President and Chief Financial Officer on April 27, 2009. Mr. Hawkins received a sign-on bonus paid in two equal $100,000 installments in each of fiscal years 2010 and 2011. Mr. Hawkins’ fiscal 20112013 other compensation includes a reimbursement of relocation expenses of $73,176.$20,882 with an associated tax gross up of $18,333. In addition, Mr. Hawkins’ fiscal 20112013 other compensation includes authorized spouse travel and gifts in connection with a business trip, tax gross-ups for certain perquisites, the company 401(k) plan match, and standard health benefits, a mobile computing device, and tax gross ups for certain perquisites.benefits. |
(c) | On December 14, 2010, | (b) | Mr. Bado announced his intention to resign as our Executive Vice President, Sales and Services. In connection with Mr. Bado’s resignation, we entered into a Separation Agreement (the “Separation Agreement”) with Mr. Bado on January 28, 2011. Mr. Bado’sBlum’s Non-Equity Incentive Plan Compensation consists of amounts earned pursuant to our short-term cash incentive plan (EIP) andas sales commissions and sales bonus earned during fiscal 2011, 20102013 and 2009, respectively, as shown below. Commissions and sales bonusbonuses are paid quarterly for the previous quarter’s commissions and bonus earned. |
| | | | | | | | | | | | | | | Fiscal 2011 | | | Fiscal 2010 | | | Fiscal 2009 | | Sales commissions | | $ | 611,575 | | | $ | 567,281 | | | $ | 275,439 | | Sales commissions-operating margin | | | 40,000 | | | | — | | | | 40,000 | | Short-term cash incentive plan (EIP) | | | — | | | | 25,000 | | | | 37,500 | | | | | | | | | | | | | | | Total | | $ | 651,575 | | | $ | 592,281 | | | $ | 352,939 | | | | | | | | | | | | | | |
During
| | | | | | Fiscal 2013 | Sales commissions | $ | 195,623 |
| Sales commissions—non-GAAP operating margin | 38,250 |
| Total | $ | 233,873 |
|
Mr. Blum’s fiscal 2011, Mr. Bado’s other compensation includes the accrual of two special payments each of $181,000 in connection with continued compliance with the terms of the Separation Agreement, $75,000 salary compensation for his employment through March 28, 2011, and a $55,000 severance payment. In addition, Mr. Bado’s fiscal 20112013 other compensation includes authorized spouse travel and gifts in connection with a business trip, the Company 401(k) plan match, health benefits and tax gross upsgross-ups for certain perquisites.perquisites, and standard health benefits. (d) | | (c) | Mr. Di Fronzo’sKross' fiscal 20112013 other compensation includes authorized spouse travel and gifts in connection with a business trip, the Company 401(k) plan match, health benefits, entertainment, and tax gross ups for certain perquisites.perquisites, the 401(k) plan match, and standard health benefits. |
| | (d) | Fiscal 2013 bonuses primarily relate to amounts paid under the Autodesk, Inc. Incentive Performance Plan, in recognition of Autodesk's performance under the metrics approved for that Plan. In addition, Ms. Becker and Mr. Blum received anniversary bonuses in recognition of their years of service. |
Special Meeting Proxy Statement 41
| | (e) | BeginningAmounts consist of the aggregate grant date value for PSU and RSU awards computed in accordance with FASB ASC Topic 718, based on target levels of achievement (the probable outcome at grant) in the case of PSUs. The assumptions used in the valuation of these awards are set forth in Note 1, “Business and Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K filed on March 18, 2013. The maximum value of PSU awards is capped at 150% of target. The maximum values for PSU awards granted in fiscal 2009, under2013 are as follows: Mr. Bass: $4,519,350; Mr. Hawkins: $890,175; Ms. Becker: $684,750; Mr. Blum: $890,175; Mr. Di Fronzo: $684,750; Mr. Hanspal: $876,480; and Mr. Kross: $684,750. In addition, Mr. Bass received a PSU grant relating to certain specified strategic corporate and talent management performance objectives, with a maximum value of $1,243,200. Actual PSU awards earned in fiscal 2013 by the terms of our EquityNamed Executive Officers are shown in “Long-Term Incentive Compensation" in the “Compensation Discussion and Analysis.” |
| | (f) | Prior to April 2013, we maintained the Deferral Plan. Under the Deferral Plan, participants were permitted to elect to defer up to 50 percent50% of their short-term cash incentive plan (EIP)EIP award in a given plan year. The deferred amount of such award willwas to be settled with restricted stock unitsRSUs granted to the participant. For detailed information on the Equity Incentive Deferral Plan, see “Compensation Discussion and Analysis—Equity Grant Policies,Analysis,” above. For detailed information on fiscal 2011 deferrals, see note (b) to “Grants of Plan-Based Awards in Fiscal 2011” below. |
Grants of Plan-Based Awards in Fiscal 20112013
Grants of plan-based awards reflect grants made to our Named Executive Officers under our non-equity incentive plans and equity compensation plans during fiscal 2011.2013. The following table includes potential threshold, target and maximum amounts payable under our short-term cash incentive plan (EIP) for performance during fiscal 2011. The actual2013. However, these amounts awardeddo not reflect amounts actually earned under our short-term cash incentive plan (EIP)EIP for fiscal 2011 were determined by the Compensation Committee in March 20112013. The following table also includes amounts relating to PSUs and are reflected in the “Equity Incentive Plan Compensation” column of the “Summary Compensation Table and Narrative Disclosure” above for the amount awarded in restricted stock units and “Non-Equity Incentive Plan Compensation” column of the “Summary Compensation Table and Narrative Disclosure” above for the amount awarded in cash. As described in “Compensation Discussion and Analysis—Equity Grant Policies,” above,RSUs issued under our Equity Incentive Deferral Plan permits participants to elect to defer up to 50 percent of their short-term cash incentive plan (EIP) award in a given plan year. Any such deferrals are reflected in footnote (b) following the table below, and the resulting restricted stock units granted under such deferrals are not reflected in the table below as such grants were made in fiscal 2012.Amounts included for options granted under the 20082012 Employee Stock Plan during fiscal 2011 are not tied to performance against a specific plan, but have values that are tied to the price of our stock. Options granted under the 2008 Employee Stock Plan shown in the column entitled “All Other Option Awards” vest over a four year period at a rate of 25 percent per year.Plan. See “Change in Control Arrangements and Employment Agreements” below for a further description of certain terms relating to these awards. Awards made under our short-term cash incentive plan (EIP) and the grant-date fair value of awards from our 2008 Employee Stock Plan are included in the Summary Compensation Table above, andfollowing table do not constitute additional compensation fromto the amounts included in the Summary Compensation Table.
See “Annual Incentive Award Decisions" and “Long-Term Incentive Compensation" in the “Compensation Discussion and Analysis” abovebeginning on page 23 for actual amounts earned in fiscal 2013 by the Named Executive Officers and further discussion of the role of plan basedplan-based and other awards in our overall executive compensation program.
Special Meeting Proxy Statement 42
The following table presents information concerning grants of plan-based awards to each of the Named Executive Officers during the fiscal year ended January 31, 2011:2013: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (a) | | Estimated Future Payouts Under Equity Incentive Plan Awards (b) | | All Other Stock Awards: Number of Shares of Stock (#)(c) | | Grant Date Fair Value of Stock Awards and Option Awards ($) (d) | Name | | Grant Date | | | | Threshold ($) | | Target ($) | | Maximum ($) | | Threshold ($) | | Target ($) | | Maximum ($) | | Carl Bass | | 3/8/2012 | | | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 82,500 |
| | 3,012,900 |
| | | 3/8/2012 | | | | — |
| | — |
| | — |
| | — |
| | 82,500 |
| | 123,750 |
| | — |
| | 3,012,900 |
| | | 12/5/2012 | | (e) | | — |
| | — |
| | — |
| | — |
| | 37,000 |
| | 37,000 |
| | — |
| | 1,243,200 |
| | | | | | | — |
| | 1,237,500 |
| | 2,351,250 |
| | — |
| | — |
| | — |
| | — |
| | — |
| Mark J. | | 3/8/2012 | | | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 16,250 |
| | 593,450 |
| Hawkins | | 3/8/2012 | | | | — |
| | — |
| | — |
| | — |
| | 16,250 |
| | 24,375 |
| | — |
| | 593,450 |
| | | | | | | — |
| | 427,500 |
| | 812,250 |
| | — |
| | — |
| | — |
| | — |
| | — |
| Jan Becker | | 3/8/2012 | | | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 12,500 |
| | 456,500 |
| | | 3/8/2012 | | | | — |
| | — |
| | — |
| | — |
| | 12,500 |
| | 18,750 |
| | — |
| | 456,500 |
| | | | | | | — |
| | 296,250 |
| | 562,875 |
| | — |
| | — |
| | — |
| | — |
| | — |
| Steve M. | | 3/8/2012 | | | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 16,250 |
| | 593,450 |
| Blum | | 3/8/2012 | | | | — |
| | — |
| | — |
| | — |
| | 16,250 |
| | 24,375 |
| | — |
| | 593,450 |
| | | | | | | — |
| | 425,000 |
| | N/A |
| | — |
| | — |
| | — |
| | — |
| | — |
| Pascal W. | | 3/8/2012 | | | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 12,500 |
| | 456,500 |
| Di Fronzo | | 3/8/2012 | | | | — |
| | — |
| | — |
| | — |
| | 12,500 |
| | 18,750 |
| | — |
| | 456,500 |
| | | | | | | — |
| | 318,750 |
| | 605,625 |
| | — |
| | — |
| | — |
| | — |
| | — |
| Amar | | 3/8/2012 | | | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 16,000 |
| | 584,320 |
| Hanspal | | 3/8/2012 | | | | — |
| | — |
| | — |
| | — |
| | 16,000 |
| | 24,000 |
| | — |
| | 584,320 |
| | | | | | | — |
| | 303,750 |
| | 577,125 |
| | — |
| | — |
| | — |
| | — |
| | — |
| Robert | | 3/8/2012 | | | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 12,500 |
| | 456,500 |
| Kross | | 3/8/2012 | | | | — |
| | — |
| | — |
| | — |
| | 12,500 |
| | 18,750 |
| | — |
| | 456,500 |
| | | | | | | — |
| | 296,250 |
| | 562,875 |
| | — |
| | — |
| | — |
| | — |
| | — |
|
________________ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimated Future Payouts Under
Non-Equity Incentive Plan Awards (a), (b)
| | | All Other
Option
Awards:
Number of
Securities
Underlying
Options (#) | | | Exercise or
Base Price
of Option
Awards
($/Sh) | | | Grant Date
Fair Value
of Stock
Awards and
Option
Awards ($)
(c) | | Name
| | Grant Date | | Threshold ($) | | | Target ($) | | | Maximum ($) | | | | | Carl Bass
| | 3/26/2010 | | $
| —
— |
| | $
| —
1,125,000 |
| | $
| —
2,137,500 |
| |
| 390,000
— |
| | $
| 29.50
— |
| | $
| 3,704,727
— |
| Mark J. Hawkins
| | 3/26/2010 | |
| —
— |
| |
| —
393,750 |
| |
| —
748,125 |
| |
| 75,000
— |
| |
| 29.50
— |
| |
| 712,447
—
|
| George M. Bado
| | 3/26/2010 | |
| —
— |
| |
| —
460,000 |
| |
| —
N/A
|
| |
| 70,000
— |
| |
| 29.50
— |
| |
| 664,951
—
|
| Jay Bhatt
| | 3/26/2010 | |
| —
— |
| |
| —
315,000 |
| |
| —
598,500 |
| |
| 100,000
— |
| |
| 29.50
— |
| |
| 949,930
—
|
| Pascal W. Di Fronzo
| | 3/26/2010 | |
| —
— |
| |
| —
266,250 |
| |
| —
505,875 |
| |
| 60,000
— |
| |
| 29.50
— |
| |
| 569,958
—
|
|
(a) | Reflects target and maximum dollar amounts payable under the short-term cash incentive plan (EIP)EIP for performance during fiscal 2011,2013, as described in “Compensation Discussion and Analysis—Elements of Executive Compensation Programs.” “Threshold” refers to the minimum amount payable for a certain level of performance; “Target” refers to the amount payable if specified performance targets are reached; and “Maximum” refers to the maximum payout possible. Mr. Bado’sBlum’s amount in the “Target”“target” column includes a fiscal 20112013 target short-term cash incentive plan (EIP) award of $80,000$170,000 and target sales commissions of $340,000.$255,000. Mr. Bado’sBlum’s maximum short-term cash incentive plan (EIP) award is $152,000,$323,000, or 190 percent190% of his target award. CommissionsSales commissions do not have a preset maximum limit. |
| | (b) | Under the termsRepresents shares of our Equity Incentive Deferral Plan, participants haveCommon Stock subject to each of the abilityPSU awards granted to deferthe Named Executive Officers in fiscal 2013 under our 2012 Employee Stock Plan. These columns show the awards that were possible at the threshold, target and maximum levels of performance. Shares were to be earned based upon our revenue growth and non-GAAP operating margin performance for fiscal 2013, calculated under a portion (up to 50 percent) of their EIP award as restricted stock units.pre-established performance matrix. The Committee established the target levels for the revenue performance measure at $2.5 billion and the target level for the non-GAAP operating margin performance measure at 26%. After the Committee determined the number of shares of stock underlying restricted stock units granted forCommon Stock earned pursuant to the deferred portionPSU awards, if any, such shares were to vest in three equal installments at the time of issuance and on the first and second anniversaries of the participant’s short-term cash incentivedate of issuance. For Mr. Bass, amounts include an additional PSU award covering 37,000 shares of Common Stock, subject to being earned based upon achievement of (a) specific corporate performance objectives, involving specific outcomes and deliverables related to Autodesk's strategic plan (EIP) award (“Base RSUs”) is determined by dividing the amountand (b) management of short-term cash incentive deferredexecutive talent. Actual PSU awards earned in fiscal 2013 by the closing price of our common shares onNamed Executive Officers under this program are shown in “Long-Term Incentive Compensation” in the grant date. These Base “Compensation Discussion and Analysis.” |
| | (c) | RSUs are fully vested upon grant. In addition, participants who have electedvest as to defer a portion of their short-term cash incentive plan (EIP) award as restricted stock units receive an additional grant of restricted stock units (“Premium RSUs”) at a rate of one share of Premium RSUs for each three shares of Base RSUs granted. These Premium RSUs fully vest on the third anniversaryone-third of the grant date. The actual amounts awarded under our short-term cash incentive plan (EIP) for fiscal 2011 were determined by the Compensation Committee and approved by Autodesk’s Board of Directorsunits on March 24, 2011, and are reflected in the “Equity Incentive Plan Compensation” column of the “Summary Compensation Table and Narrative Disclosure” above for the amount awarded in restricted stock units and “Non-Equity Incentive Plan Compensation” column of the “Summary Compensation Table and Narrative Disclosure” above for the amount awarded in cash. The table below reflects each Named Executive Officer’s decision to defer a portion of their short-term cash incentive plan (EIP) award under our Equity Incentive Deferral Plan and the resulting grants of restricted stock units. The stock awards shown below reflect a closing Common Stock price of $43.81 on March 24, 2011,an annual basis over three years from the date of grant. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | Cash ($) | | | Base RSUs (#) | | | Grant Date Fair Value of Base RSUs ($) | | | Premium RSUs (#) | | | Grant Date Fair Value of Premium RSUs ($) | | | Percent Deferred | | Carl Bass | | $ | 1,429,000 | | | | — | | | $ | — | | | | — | | | $ | — | | | | 0 | % | Mark J. Hawkins | | | 250,000 | | | | 5,706 | | | | 249,980 | | | | 1,902 | | | | 83,327 | | | | 50 | % | George M. Bado | | | — | | | | — | | | | — | | | | — | | | | — | | | | 0 | % | Jay Bhatt | | | 200,000 | | | | 4,565 | | | | 199,993 | | | | 1,521 | | | | 66,635 | | | | 50 | % | Pascal W. Di Fronzo | | | 340,000 | | | | — | | | | — | | | | — | | | | — | | | | 0 | % |
(c) | | (d) | Reflects the grant date fair value of each equity award. The assumptions used in the valuation of these awards are set forth in Note 1, “Business and Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K filed on March 18, 2011.2013. These amounts do not correspond to the actual value that will be realized by the Named Executive Officers upon the vesting of restricted stock units, the exercise of stock options,RSUs or the sale of the Common Stock underlying such awards. |
| | (e) | The Compensation and Human Resources Committee approved the PSU award on March 8, 2012, but due to the accounting standards the award was not recognized as granted until December 5, 2012. |
Special Meeting Proxy Statement 43
Outstanding Equity Awards at Fiscal 20112013 Year End
The following table presents information concerning unexercised options and unvested restricted stock unitRSU awards for each Named Executive Officer outstanding as of January 31, 2011.2013. This table includes options and restricted stock unitsRSUs granted under the 2012 Employee Stock Plan, the 2008 Employee Stock Plan, the 2006 Employee Stock Plan and the 1996 Stock Plan. Unless otherwise indicated, all options granted to Named Executive Officers vest at the rate of 25 percent25% per year over the first four years of the option term and all restricted stock unitRSU awards fully vest on the third anniversary of the grant date. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | | Stock Awards | | Name | | Grant Date | | | Number of Securities Underlying Unexercised Options (#) Exercisable | | | Number of securities Underlying Unexercised Options (#) Unexercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares of Stock That Have Not Vested (#) | | | Market Value of Shares of Stock That Have Not Vested ($) (f) | | | Equity Incentive Plan Awards: Number of Unearned Shares That Have Not Vested (#) | | | Plan Awards: Market or Payout Value of Unearned Shares That Have Not Vested | | Carl Bass | | | 3/18/2004 | | | | 125,000 | | | | — | | | $ | 14.40 | | | | 3/18/2014 | | | | — | | | $ | — | | | | — | | | $ | — | | | | | 6/28/2004 | | | | 150,000 | | | | — | | | | 20.69 | | | | 6/28/2014 | | | | — | | | | — | | | | — | | | | — | | | | | 3/10/2005 | | | | 218,750 | | | | — | | | | 30.15 | | | | 3/10/2012 | | | | — | | | | — | | | | — | | | | — | | | | | 3/9/2006 | | | | 750,000 | | | | — | | | | 38.00 | | | | 3/9/2012 | | | | — | | | | — | | | | — | | | | — | | | | | 6/14/2007 | | | | 281,250 | | | | 93,750 | | | | 45.29 | | | | 6/14/2013 | | | | — | | | | — | | | | — | | | | — | | | | | 3/13/2008 | | | | 200,000 | | | | 200,000 | | | | 34.53 | | | | 3/13/2014 | | | | — | | | | — | | | | — | | | | — | | | | | 6/12/2008 | | | | — | | | | — | | | | — | | | | — | | | | 38,000 | (b) | | | 1,545,840 | | | | — | | | | — | | | | | 2/2/2009 | | | | 131,250 | | | | 393,750 | | | | 16.53 | | | | 2/2/2016 | | | | — | | | | — | | | | — | | | | — | | | | | 12/10/2009 | | | | — | | | | — | | | | — | | | | — | | | | 24,000 | (d) | | | 976,320 | | | | — | | | | — | | | | | 3/26/2010 | | | | — | | | | 3,389 | | | | 29.50 | | | | 3/26/2017 | | | | — | | | | — | | | | — | | | | — | | | | | 3/26/2010 | | | | — | | | | 386,611 | | | | 29.50 | | | | 3/26/2017 | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | Mark J. Hawkins | | | 4/27/2009 | | | | — | | | | 112,500 | | | | 19.01 | | | | 4/27/2016 | | | | 25,000 | (e) | | | 1,017,000 | | | | — | | | | — | | | | | 12/10/2009 | | | | — | | | | — | | | | — | | | | — | | | | 6,500 | (d) | | | 264,420 | | | | — | | | | — | | | | | 3/26/2010 | | | | — | | | | 3,389 | | | | 29.50 | | | | 3/26/2017 | | | | — | | | | — | | | | — | | | | — | | | | | 3/26/2010 | | | | — | | | | 71,611 | | | | 29.50 | | | | 3/26/2017 | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | George M. Bado | | | 3/9/2006 | | | | 45,000 | | | | — | | | | 38.00 | | | | 3/9/2012 | | | | — | | | | — | | | | — | | | | — | | | | | 6/14/2007 | | | | 63,750 | | | | 19,043 | | | | 45.29 | | | | 6/14/2013 | | | | — | | | | — | | | | — | | | | — | | | | | 3/12/2008 | | | | 32,500 | | | | — | | | | 32.90 | | | | 3/12/2014 | | | | — | | | | — | | | | — | | | | — | | | | | 6/12/2008 | | | | — | | | | — | | | | — | | | | — | | | | 10,000 | (b) | | | 406,800 | | | | — | | | | — | | | | | 2/2/2009 | | | | 25,000 | | | | 74,999 | | | | 16.53 | | | | 2/2/2016 | | | | — | | | | — | | | | — | | | | — | | | | | 3/12/2009 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 981 | (c) | | | 39,907 | | | | | 12/10/2009 | | | | — | | | | — | | | | — | | | | — | | | | 6,500 | (d) | | | 264,420 | | | | — | | | | — | | | | | 3/26/2010 | | | | — | | | | 3,389 | | | | 29.50 | | | | 3/26/2017 | | | | — | | | | — | | | | — | | | | — | | | | | 3/26/2010 | | | | — | | | | 66,611 | | | | 29.50 | | | | 3/26/2017 | | | | — | | | | — | | | | — | | | | — | | | | | 3/26/2010 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 282 | (g) | | | 11,472 | | | | | | | | | | | | Jay Bhatt | | | 2/10/2005 | | | | 35,000 | | | | — | | | | 29.37 | | | | 2/10/2012 | | | | — | | | | — | | | | — | | | | — | | | | | 3/9/2006 | | | | 25,000 | | | | — | | | | 38.00 | | | | 3/9/2012 | | | | — | | | | — | | | | — | | | | — | | | | | 6/14/2007 | | | | 48,750 | | | | 30,293 | | | | 45.29 | | | | 6/14/2013 | | | | — | | | | — | | | | — | | | | — | | | | | 8/6/2007 | | | | 2,992 | (a) | | | — | | | | 17.53 | | | | 4/5/2014 | | | | — | | | | — | | | | — | | | | — | | | | | 8/6/2007 | | | | 10,000 | (a) | | | — | | | | 21.89 | | | | 8/13/2014 | | | | — | | | | — | | | | | | | | | | | | | 3/12/2008 | | | | 32,500 | | | | 32,500 | | | | 32.90 | | | �� | 3/12/2014 | | | | — | | | | — | | | | — | | | | — | | | | | 6/12/2008 | | | | — | | | | — | | | | — | | | | — | | | | 7,500 | (b) | | | 305,100 | | | | — | | | | — | | | | | 2/2/2009 | | | | 18,750 | | | | 56,250 | | | | 16.53 | | | | 2/2/2016 | | | | — | | | | — | | | | — | | | | — | | | | | 3/12/2009 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 2,289 | (c) | | | 93,117 | | | | | 6/11/2009 | | | | 6,250 | | | | 18,750 | | | | 22.40 | | | | 6/11/2016 | | | | — | | | | — | | | | — | | | | — | | | | | 12/10/2009 | | | | — | | | | — | | | | — | | | | — | | | | 6,500 | (d) | | | 264,420 | | | | — | | | | — | | | | | 3/26/2010 | | | | — | | | | 3,389 | | | | 29.50 | | | | 3/26/2017 | | | | — | | | | — | | | | — | | | | — | | | | | 3/26/2010 | | | | | | | | 96,611 | | | | 29.50 | | | | 3/26/2017 | | | | — | | | | — | | | | — | | | | — | | | | | 3/26/2010 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1,694 | (g) | | | 68,912 | | | | | | | | | | | | Pascal W. Di Fronzo | | | 3/9/2006 | | | | 30,000 | | | | — | | | | 38.00 | | | | 3/9/2012 | | | | — | | | | — | | | | — | | | | — | | | | | 12/13/2006 | | | | 22,500 | | | | — | | | | 41.06 | | | | 12/13/2012 | | | | — | | | | — | | | | — | | | | — | | | | | 6/14/2007 | | | | 56,250 | | | | 18,750 | | | | 45.29 | | | | 6/14/2013 | | | | — | | | | — | | | | — | | | | — | | | | | 3/12/2008 | | | | 22,500 | | | | 22,500 | | | | 32.90 | | | | 3/12/2014 | | | | — | | | | — | | | | — | | | | — | | | | | 6/12/2008 | | | | — | | | | — | | | | — | | | | — | | | | 7,500 | (b) | | | 305,100 | | | | — | | | | — | | | | | 2/2/2009 | | | | 18,750 | | | | 56,250 | | | | 16.53 | | | | 2/2/2016 | | | | — | | | | — | | | | — | | | | — | | | | | 3/12/2009 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 2,289 | (c) | | | 93,117 | | | | | 12/10/2009 | | | | — | | | | — | | | | — | | | | — | | | | 6,500 | (d) | | | 264,420 | | | | — | | | | — | | | | | 3/26/2010 | | | | — | | | | 3,389 | | | | 29.50 | | | | 3/26/2017 | | | | — | | | | — | | | | — | | | | — | | | | | 3/26/2010 | | | | — | | | | 56,611 | | | | 29.50 | | | | 3/26/2017 | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | Name | | Grant Date | | Number of Securities Underlying Unexercised Options (#) Exercisable | | | | Number of securities Underlying Unexercised Options (#) Unexercisable | | Option Exercise Price ($) | | Option Expiration Date | | Number of Shares of Stock That Have Not Vested (#) | | | | Market Value of Shares of Stock That Have Not Vested ($) (f) | | Equity Incentive Plan Awards: Number of Unearned Shares That Have Not Vested (#) | | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares That Have Not Vested ($) | Carl Bass | | 3/18/2004 | | 125,000 |
| |
| | — |
| | 14.40 |
| | 3/18/2014 |
| | — |
| |
| | $ | — |
| | — |
| |
| | $ | — |
| | | 6/28/2004 | | 150,000 |
| |
| | — |
| | 20.69 |
| | 6/28/2014 |
| | — |
| |
| | — |
| | — |
| |
| | — |
| | | 6/14/2007 | | 375,000 |
| |
| | — |
| | 45.29 |
| | 6/14/2013 |
| | — |
| |
| | — |
| | — |
| |
| | — |
| | | 3/13/2008 | | 400,000 |
| |
| | — |
| | 34.53 |
| | 3/13/2014 |
| | — |
| |
| | — |
| | — |
| |
| | — |
| | | 2/2/2009 | | 393,750 |
| |
| | 131,250 |
| | 16.53 |
| | 2/2/2016 |
| | — |
| |
| | — |
| | — |
| |
| | — |
| | | 3/26/2010 | | 195,000 |
| |
| | 195,000 |
| | 29.50 |
| | 3/26/2017 |
| | — |
| |
| | — |
| | — |
| |
| | — |
| | | 3/24/2011 | | 75,000 |
| |
| | 225,000 |
| | 43.81 |
| | 3/24/2021 |
| | — |
| |
| | — |
| | — |
| |
| | — |
| | | 3/8/2012 | | — |
| |
| | — |
| | — |
| | — |
| | 34,225 |
| | (a) | | 1,330,668 |
| | — |
| |
| | — |
| | | 3/8/2012 | | — |
| |
| | — |
| | — |
| | — |
| | 76,147 |
| | (b) | | 2,960,595 |
| | — |
| |
| | — |
| | | 3/24/2011 | | — |
| |
| | — |
| | — |
| | — |
| | 132,000 |
| | (c) | | 5,132,160 |
| | — |
| |
| | — |
| | | 3/8/2012 | | — |
| |
| | — |
| | — |
| | — |
| | 82,500 |
| | (d) | | 3,207,600 |
| | — |
| |
| | — |
| Mark J. Hawkins | | 4/27/2009 | | — |
| |
| | 37,500 |
| | 19.01 |
| | 4/27/2016 |
| | — |
| |
| | — |
| | — |
| |
| | — |
| | | 3/26/2010 | | — |
| |
| | 37,500 |
| | 29.50 |
| | 3/26/2017 |
| | — |
| |
| | — |
| | — |
| |
| | — |
| | | 3/24/2011 | | — |
| |
| | 20,625 |
| | 43.81 |
| | 3/24/2021 |
| | — |
| |
| | — |
| | — |
| |
| | — |
| | | 3/24/2011 | | — |
| |
| | — |
| | — |
| | — |
| | 9,075 |
| | (c) | | 352,836 |
| | — |
| |
| | — |
| | | 3/24/2011 | | — |
| |
| | — |
| | — |
| | — |
| | — |
| |
| | — |
| | 1,902 |
| | (h) | | 73,950 |
| | | 9/21/2011 | | — |
| |
| | — |
| | — |
| | — |
| | 20,000 |
| | (e) | | 777,600 |
| | — |
| |
| | — |
| | | 3/8/2012 | | — |
| |
| | — |
| | — |
| | — |
| | — |
| |
| | — |
| | 1,553 |
| | (g) | | 60,381 |
| | | 3/8/2012 | | — |
| |
| | — |
| | — |
| | — |
| | 16,250 |
| | (d) | | 631,800 |
| | — |
| |
| | — |
| | | 3/8/2012 | | — |
| |
| | — |
| | — |
| | — |
| | 14,998 |
| | (b) | | 583,122 |
| | — |
| |
| | — |
| Jan Becker | | 6/14/2007 | | 50,000 |
| | | | — |
| | 45.29 |
| | 6/14/2013 |
| | — |
| | | | — |
| | — |
| | | | — |
| | | 3/12/2008 | | 45,000 |
| | | | — |
| | 32.90 |
| | 3/12/2014 |
| | — |
| | | | — |
| | — |
| | | | — |
| | | 2/2/2009 | | 2 |
| | | | 18,750 |
| | 16.53 |
| | 2/2/2016 |
| | — |
| | | | — |
| | — |
| | | | — |
| | | 3/26/2010 | | 15,000 |
| | | | 30,000 |
| | 29.50 |
| | 3/26/2017 |
| | — |
| | | | — |
| | — |
| | | | — |
| | | 3/24/2011 | | 6,875 |
| | | | 20,625 |
| | 43.81 |
| | 3/24/2021 |
| | — |
| | | | — |
| | — |
| | | | — |
| | | 3/8/2012 | | — |
| | | | — |
| | — |
| | — |
| | 11,537 |
| | (b) | | 448,559 |
| | — |
| | | | — |
| | | 3/24/2011 | | — |
| | | | — |
| | — |
| | — |
| | 9,075 |
| | (c) | | 352,836 |
| | — |
| | | | — |
| | | 9/21/2011 | | — |
| | | | — |
| | — |
| | — |
| | 20,000 |
| | (e) | | 777,600 |
| | — |
| | | | — |
| | | 3/8/2012 | | — |
| | | | — |
| | — |
| | — |
| | 12,500 |
| | (d) | | 486,000 |
| | — |
| | | | — |
| Steve M. Blum | | 6/14/2007 | | 65,000 |
| |
| | — |
| | 45.29 |
| | 6/14/2013 |
| | — |
| |
| | — |
| | — |
| |
| | — |
| | | 6/29/2007 | | 22,500 |
| | (i) | | — |
| | 17.53 |
| | 4/5/2014 |
| | — |
| |
| | — |
| | — |
| |
| | — |
| | | 3/12/2008 | | 20,706 |
| |
| | — |
| | 32.90 |
| | 3/12/2014 |
| | — |
| |
| | — |
| | — |
| |
| | — |
| | | 2/2/2009 | | 41,250 |
| |
| | 13,750 |
| | 16.53 |
| | 2/2/2016 |
| | — |
| |
| | — |
| | — |
| |
| | — |
| | | 3/25/2010 | | 30,000 |
| |
| | 30,000 |
| | 29.49 |
| | 3/25/2017 |
| | — |
| |
| | — |
| | — |
| |
| | — |
| | | 3/24/2011 | | 12,500 |
| | | | 37,500 |
| | 43.81 |
| | 3/24/2021 |
| | — |
| | | | — |
| | — |
| | | | — |
| | | 3/24/2011 | | — |
| |
| | — |
| | — |
| | — |
| | 16,500 |
| | (c) | | 641,520 |
| | — |
| |
| | — |
| | | 9/21/2011 | | — |
| |
| | — |
| | — |
| | — |
| | 20,000 |
| | (e) | | 777,600 |
| | — |
| |
| | — |
| | | 3/8/2012 | | — |
| |
| | — |
| | — |
| | — |
| | 14,998 |
| | (b) | | 583,122 |
| | — |
| |
| | — |
|
Special Meeting Proxy Statement 44
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3/8/2012 | | — |
| |
| | — |
| | — |
| | — |
| | 16,250 |
| | (d) | | 631,800 |
| | — |
| |
| | — |
| Pascal W. Di Fronzo | | 6/14/2007 | | 75,000 |
| |
| | — |
| | 45.29 |
| | 6/14/2013 |
| | — |
| |
| | — |
| | — |
| |
| | — |
| | | 3/12/2008 | | 22,502 |
| |
| | — |
| | 32.90 |
| | 3/12/2014 |
| | — |
| |
| | — |
| | — |
| |
| | — |
| | | 2/2/2009 | | 56,250 |
| |
| | 18,750 |
| | 16.53 |
| | 2/2/2016 |
| | — |
| |
| | — |
| | — |
| |
| | — |
| | | 3/26/2010 | | 30,000 |
| |
| | 30,000 |
| | 29.50 |
| | 3/26/2017 |
| | — |
| |
| | — |
| | — |
| |
| | — |
| | | 3/24/2011 | | 6,875 |
| |
| | 20,625 |
| | 43.81 |
| | 3/24/2021 |
| | — |
| |
| | — |
| | — |
| |
| | — |
| | | 3/8/2012 | | — |
| |
| | — |
| | — |
| | — |
| | 11,537 |
| | (b) | | 448,559 |
| | — |
| |
| | — |
| | | 3/24/2011 | | — |
| |
| | — |
| | — |
| | — |
| | 9,075 |
| | (c) | | 352,836 |
| | — |
| |
| | — |
| | | 9/21/2011 | | — |
| |
| | — |
| | — |
| | — |
| | 20,000 |
| | (e) | | 777,600 |
| | — |
| |
| | — |
| | | 3/8/2012 | | — |
| |
| | — |
| | — |
| | — |
| | 12,500 |
| | (d) | | 486,000 |
| | — |
| |
| | — |
| Amar Hanspal | | 6/14/2007 | | 75,000 |
| | | | — |
| | 45.29 |
| | 6/14/2013 |
| | — |
| | | | — |
| | — |
| | | | — |
| | | 3/12/2008 | | 45,000 |
| | | | — |
| | 32.90 |
| | 3/12/2014 |
| | — |
| | | | — |
| | — |
| | | | — |
| | | 2/2/2009 | | 56,250 |
| | | | 18,750 |
| | 16.53 |
| | 2/2/2016 |
| | — |
| | | | — |
| | — |
| | | | — |
| | | 3/26/2010 | | 30,000 |
| | | | 30,000 |
| | 29.50 |
| | 3/26/2017 |
| | — |
| | | | — |
| | — |
| | | | — |
| | | 3/24/2011 | | 6,875 |
| | | | 20,625 |
| | 43.81 |
| | 3/24/2021 |
| | — |
| | | | — |
| | — |
| | | | — |
| | | 8/6/2007 | | 40,000 |
| | (i) | | — |
| | 24.97 |
| | 9/15/2014 |
| | — |
| | | | — |
| | — |
| | | | — |
| | | 3/8/2012 | | — |
| | | | — |
| | — |
| | — |
| | 14,768 |
| | (b) | | 574,180 |
| | — |
| | | | — |
| | | 3/26/2010 | | — |
| | | | — |
| | — |
| | — |
| | — |
| | | | — |
| | 745 |
| | (j) | | 28,966 |
| | | 3/24/2011 | | — |
| | | | — |
| | — |
| | — |
| | 9,075 |
| | (c) | | 352,836 |
| | — |
| | | | — |
| | | 9/21/2011 | | — |
| | | | — |
| | — |
| | — |
| | 20,000 |
| | (e) | | 777,600 |
| | — |
| | | | — |
| | | 3/8/2012 | | — |
| | | | — |
| | — |
| | — |
| | — |
| | | | — |
| | 963 |
| | (g) | | 37,441 |
| | | 3/8/2012 | | — |
| | | | — |
| | — |
| | — |
| | 16,000 |
| | (d) | | 622,080 |
| | — |
| | | | — |
| Robert Kross | | 6/14/2007 | | 65,000 |
| |
| | — |
| | 45.29 |
| | 6/14/2013 |
| | — |
| |
| | — |
| | — |
| |
| | — |
| | | 3/12/2008 | | 45,000 |
| |
| | — |
| | 32.90 |
| | 3/12/2014 |
| | — |
| |
| | — |
| | — |
| |
| | — |
| | | 2/2/2009 | | 37,500 |
| |
| | 18,750 |
| | 16.53 |
| | 2/2/2016 |
| | — |
| |
| | — |
| | — |
| |
| | — |
| | | 3/26/2010 | | 30,000 |
| |
| | 30,000 |
| | 29.50 |
| | 3/26/2017 |
| | — |
| |
| | — |
| | — |
| |
| | — |
| | | 3/24/2011 | | 6,875 |
| |
| | 20,625 |
| | 43.81 |
| | 3/24/2021 |
| | — |
| |
| | — |
| | — |
| |
| | — |
| | | 3/8/2012 | | — |
| |
| | — |
| | — |
| | — |
| | 11,537 |
| | (b) | | 448,559 |
| | — |
| |
| | — |
| | | 3/24/2011 | | — |
| |
| | — |
| | — |
| | — |
| | 9,075 |
| | (c) | | 352,836 |
| | — |
| |
| | — |
| | | 9/21/2011 | | — |
| |
| | — |
| | — |
| | — |
| | 20,000 |
| | (e) | | 777,600 |
| | — |
| |
| | — |
| | | 3/8/2012 | | — |
| |
| | — |
| | — |
| | — |
| | 12,500 |
| | (d) | | 486,000 |
| | — |
| |
| | — |
|
________________ | | (a) | Award relates to earned amount of PSU award based on certain specified strategic corporate, and talent management performance objectives. The Compensation and Human Resources Committee approved the PSU award on March 8, 2012, but due to the accounting standards the award was not recognized as granted until December 5, 2012. The award was granted under the2012 Employee Plan and vests on March 25, 2013. |
| | (b) | Awards granted on March 8, 2012, relate to a PSU award granted under the 2012 Employee Plan. The PSU award is to vest based on achievement of the performance goals for fiscal 2013 (such that achievement of a particular level of performance could result in no portion of the award vesting, the full award vesting, or some portion of the award vesting) in thirds for a period of three years from the grant date. |
| | (c) | Awards granted on March 24, 2011, relate to RSU awards and vest in thirds for a period of three years from the grant date. |
| | (d) | Awards granted on March 8, 2012, relate to RSU awards granted under the 2012 Employee Plan and vest in thirds for a period of three years from the grant date. |
| | (e) | Awards granted on September 21, 2011, relate to RSU awards and fully vest within three years of the grant date. |
| | (f) | Market value of RSUs that have not vested is computed by multiplying (i) $38.88, the closing price on the NASDAQ of Autodesk Common Stock on January 31, 2013, the last trading day of fiscal 2013, by (ii) the number of shares of stock underlying RSU awards. |
| | (g) | Awards granted on March 8, 2012, to Mr. Hawkins and Mr. Hanspal relate to the Premium RSU awards granted under the Equity Incentive Deferral Plan for fiscal year 2012. These awards vest on the third anniversary of the grant date. |
| | (h) | Awards granted on March 24, 2011, to Mr. Hawkins relate to the Premium RSU awards granted under the Equity Incentive Deferral Plan for fiscal year 2011. These awards vest on the third anniversary of the grant date. |
| | (i) | Options granted on June 29, 2007, and August 6, 2007, to Mr. BhattBlum and Mr. Hanspal relate to the re-grant of options that were amended and re-priced as a result of our 2007 voluntary review of historical stock option granting practices. These options have varied vesting |
| schedules because the original option was split between an incentive stock option and a non-qualified stock option due to IRS regulations regarding the number of incentive stock options that can vest in any one calendar year, and because only the unexercised portion of the option was cancelled and regranted.re-granted. |
(b) | Awards granted on June 12, 2008 fully vest on the third anniversary of the grant date. |
(c) | Awards granted on March 12, 2009 relate to the Premium RSU awards granted under the Equity Incentive Deferral Plan for fiscal year 2009. These awards vest on the third anniversary of the grant date. |
(d) | Awards granted on December 10, 2009 fully vest on the second anniversary of the grant date. |
(e) | Awards granted to Mr. Hawkins on April 27, 2009 relate to his new hire grants, which fully vest on the third anniversary of the grant date. |
(f) | Market value of restricted stock units that have not vested is computed by multiplying (i) $40.68, the closing price on the NASDAQ Global Select Market of Autodesk common stock on January 31, 2011, the last business day of fiscal 2011, by (ii) the number of shares of stock underlying restricted stock unit awards. |
(g)(j) | Awards granted on March 26, 2010, to Mr. Hanspal relate to the Premium RSU awards granted under the Equity Incentive Deferral Plan for fiscal year 2010. These awards vest on the third anniversary of the grant date. |
Special Meeting Proxy Statement 45
Option Exercises and Stock Vested at Fiscal 20112013 Year End
The following table presents certain information concerning the vesting of stock awards by each of the Named Executive Officers during the fiscal year ended January 31, 2011. | | | | | | | | | | | | | | | | | | | Option Awards | | | Stock Awards | | Name | | Number of Shares Acquired on Exercise (#) | | | Value Realized on Exercise ($) (a) | | | Number of Shares Acquired on Vesting (#) | | | Value Realized on Vesting ($) (a) | | Carl Bass | | | — | | | $ | — | | | | — | | | $ | — | | Mark J. Hawkins | | | 37,500 | | | | 1,087,875 | | | | — | | | | — | | George M. Bado | | | 45,000 | | | | 1,773,100 | | | | 847 | | | | 24,987 | | Jay Bhatt | | | — | | | | — | | | | 5,084 | | | | 149,978 | | Pascal W. Di Fronzo | | | 12,805 | | | | 527,133 | | | | — | | | | — | |
2013. | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | Named Executive Officer | | Number of Shares Acquired on Exercise (#) | | Value Realized on Exercise ($) (a) | | Number of Shares Acquired on Vesting (#) | | Value Realized on Vesting ($) (a) | Carl Bass | | 218,750 |
| | 1,518,125 |
| | 68,000 |
| | 2,428,960 |
| Mark J. Hawkins | | 56,250 |
| | 824,063 |
| | 29,675 |
| | 1,210,741 |
| Jan Becker | | 121,428 |
| | 1,820,275 |
| | 8,958 |
| | 319,980 |
| Steve M. Blum | | 108,294 |
| | 521,410 |
| | 18,500 |
| | 641,220 |
| Pascal W. Di Fronzo | | — |
| | — |
| | 13,453 |
| | 480,541 |
| Amar Hanspal | | �� |
| | — |
| | 10,348 |
| | 369,630 |
| Robert Kross | | 50,000 |
| | 451,500 |
| | 10,772 |
| | 384,775 |
|
______________ | | (a) | ReflectsFor options exercised, reflects the number of shares acquired upon exercise multiplied by the difference between the closing market price of our Common Stock as reported on the NASDAQ on the date of exercise and the exercise price of the underlying stock option. For RSUs vested, reflects the number of shares acquired on vesting multiplied by the closing market price of our common stockCommon Stock as reported on the NASDAQ Global Select Market on the vesting date. |
Nonqualified Deferred Compensation for Fiscal 20112013
Under our Nonqualified Deferred Compensation Plan, certain United States-based officers (including Named Executive Officers) may defer compensation earned as salary, commissions or awards under the short-term cash incentive plan (EIP). Deferral elections are made by eligible executive officers each year during an “open enrollment” period for amounts to be earned in the following year. The CompanyAutodesk does not make any contribution for executive officers under the Nonqualified Deferred Compensation Plan. In fiscal 2011,Prior to April 2013, we adoptedmaintained our Autodesk, Inc. Equity Incentive Deferral Plan, which permitspermitted certain executive officers to defer up to 50 percent50% of their short-term cash incentive plan (EIP)EIP award. The Equity Incentive Deferral Plan is available for deferral of awards paid during or after fiscal 2011.
Special Meeting Proxy Statement 46
The following table presents information regarding non-qualified deferred compensation activity for each listed officer during the fiscal year ended January 31, 2011. | | | | | | | | | | | | | Name | | Executive Contributions in Last Fiscal Year ($) (a) | | | Aggregate Earnings/ (Losses) in Last Fiscal Year ($) (b) | | | Aggregate Balance at Last Fiscal Year End ($) | | Carl Bass | | $ | — | | | $ | — | | | $ | — | | Mark J. Hawkins | | | — | | | | 4,799 | | | | 37,208 | | George M. Bado | | | 67,837 | | | | 176,953 | | | | 904,527 | | Jay Bhatt | | | 147,825 | | | | 261,383 | | | | 750,667 | | Pascal W. Di Fronzo | | | — | | | | 20,459 | | | | 107,996 | |
2013: | | | | | | | | | | | Named Executive Officer | | Executive Contributions in Fiscal Year ($) (a) | | Aggregate Earnings/ (Losses) in Fiscal Year ($) (b) | | Aggregate Balance at Fiscal Year End ($) | Carl Bass | | — |
| | — |
| | — |
| Mark J. Hawkins | | 59,800 |
| | 10,084 |
| | 107,912 |
| Jan Becker | | — |
| | 18,778 |
| | 1,145,326 |
| Steve M. Blum | | 88,260 |
| | 57,930 |
| | 444,928 |
| Pascal W. Di Fronzo | | — |
| | 18,180 |
| | 128,836 |
| Amar Hanspal | | — |
| | 3,048 |
| | 21,396 |
| Robert Kross | | — |
| | — |
| | — |
|
_____________ | | (a) | Contributions in this column for Mr. BadoHawkins and Mr. Blum include $43,200, which is$59,800 and $88,260, respectively, are reported as fiscal year 2010 non-equity incentive plan compensation in the Summary Compensation Table, and $24,638, which is reported as fiscal year 20102012 salary in the Summary Compensation Table. Contributions in this column for Mr. Bhatt include $147,825 which is reported as fiscal year 2010 non-equity incentive plan compensation in the Summary Compensation Table. |
| | (b) | None of the earnings or losses in this column are reflected in the Summary Compensation Table because they are not considered preferential or above market. |
Change in Control Arrangements and Employment Agreements
In an effort to ensure the continued service of our key executive officers in the event of a change in control, each of our current executive officers other than our CEO, among other employees, participate in an amended and restated Executive Change in Control Program (the “Program”) that was approved by the Board of Directors in March 2006 and amended most recently in December 2010, effective as of February 1, 2011.2010. Mr. Bass does not participate in the Program and has a change in control provision in his employment agreement, as noted below.
Executive Change in Control Program (effective during the fiscal year ended January 31, 2011)
Under the terms of the Executive Change in Control Program, effective during the 2011 fiscal year, if, within twelve months of a change"change in control,control", an executive officer who participates in the Program is terminated without cause,"cause", or voluntarily terminates theirhis or her employment for good reason, as cause and good reason"good reason" (as those terms are defined in the Program effective during the 2011 fiscal year, the executive officer will receive, following execution of a release and one-year non competition agreement:An amount equal to the executive officer’s annual base compensation and average annual bonus, payable over a 12 month period;
The acceleration of the executive officer’s stock options that would have vested within the 12 months following the date of the executive officer’s termination; and
Continued coverage of medical and dental insurance for the executive and eligible spouse and dependents until the earlier of 12 months from the date of termination or when the executive officer becomes covered under another employer’s employee benefit plans.
If the executive officer is terminated for any other reason, they will receive severance or other benefits only to the extent that they would be entitled to receive under our then-existing benefit plans and policies. If the benefits provided under the Program effective during the 2011 fiscal year constitute parachute payments under Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) and are subject to the excise tax imposed by Section 4999 of the Code, then such benefits will be (1) delivered in full, or (2) delivered to such lesser extent that would result in no portion of the benefits being subject to the excise tax, whichever amount results in the receipt of the greatest amount of benefits by the executive officer.
As defined in the Program effective during the 2011 fiscal year, a “Change in Control” occurs if the Company is sold or merges with another corporation, if an individual acquires 50 percent or more of the total voting power represented by voting securities, or if the composition of the Board of Directors changes substantially.
For purposes of the tables set forth below in “Potential Payments Upon Termination or Change in Control,” the amounts payable to each of our Named Executive Officers, other than to Mr. Bass who does not participate in the Program and to Mr. Bado, are based upon the terms of the Program effective during the 2011 fiscal year. In the event of the future termination of any executive officer who participates in the Program which results in payment pursuant to the terms of the Program, any such payment would be made pursuant to the terms of the Program effective as of February 1, 2011, as described below, and would result in greater benefits paid to such executive officer than pursuant to the terms of the Program effective during the 2011 fiscal year.
Executive Change in Control Program (effective as of February 1, 2011)
Under the terms of the Program effective as of February 1, 2011, if, within twelve months of a change in control, an executive officer who participates in the Program is terminated without cause, or voluntarily terminates their employment for good reason, as cause and good reason are defined in the Program,Program), the executive officer will receive (among other benefits), following execution of a release and non-solicit agreement:
An amount equal to one and one-half times the sum of the executive officer’s annual base compensation and average annual bonus, payable in a lump sum; The acceleration of all of the executive officer’s outstanding incentive equity awards, including stock options and restricted stock units;RSUs; and
Reimbursement of the total applicable premium cost for medical and dental coverage for the executive officer and his or her eligible spouse and dependents until the earlier of 18 months from the date of termination or when the executive officer becomes covered under another employer’s employee benefit plans.
If the executive officer is terminated for any other reason, they will receive severance or other benefits only to the extent that they would be entitled to receive under our then-existing benefit plans and policies. If the benefits provided under the Program constitute parachute payments under Section 280G of the Code and are subject to the excise tax imposed by Section 4999 of the Code, then such benefits will be (1) delivered in full, or (2) delivered to such lesser extent that would result in no portion of the benefits being subject to the excise tax, whichever amount results in the receipt of the greatest amount of benefits by the executive officer.
As defined in the Program, a “Change“change in Control”control” occurs if any person acquires 50 percent50% or more of the total voting power represented by voting securities, if the CompanyAutodesk sells all or substantially all its assets, if the Company mergersAutodesk merges or consolidates with another corporation, or if the composition of the Board of Directors changes substantially.
Employment Agreement with Carl Bass (effective during the fiscal year ended January 31, 2013)
In December 2008,March 2012, Autodesk entered into an amended and restated employment agreement with Carl Bass. This agreement was effective during the Companyfiscal year ended January 31, 2013, and provided for, among other things, certain payments and benefits to be provided to Mr. Bass in the event his employment was terminated without “cause” or he resigned for “good reason,” including in connection with a “change of control” or following the completion of a Board requested executive “transition period”, as each such term was defined in Mr. Bass's employment agreement.
In the event Mr. Bass's employment was terminated by Autodesk without cause or if Mr. Bass resigned for good reason, and such termination was not in connection with a change of control, Mr. Bass would have received (i) payment of 200% of his then current base salary for 12 months; (ii) payout of his pro-rata bonus for the fiscal year in which termination occurred provided Autodesk bonus targets were satisfied, to be paid in one lump sum on or before March 15th of the succeeding fiscal year; (iii) accelerated vesting for 24 months of his then-outstanding, unvested equity awards (other than any awards that vest in whole or in part based on performance); (iv) a period of not less than 12 months to exercise any vested stock options that were granted to Mr. Bass on or after February 2, 2009 (provided that such options shall expire, if earlier, on the date when they would have expired if his employment had not terminated); and (v) reimbursement for premiums paid for continued health benefits for Mr. Bass and his eligible dependents until the earlier of 12 months following termination or the date Mr. Bass became covered under similar health plans. In addition, Mr. Bass was subject to non-solicitation and non-competition covenants for 12 months following a termination that gave rise to the severance benefits discussed above.
If, in connection with a change of control, Mr. Bass's employment was terminated by Autodesk without cause or if Mr. Bass resigned for good reason, Mr. Bass would have received (i) a lump sum payment in an amount equal to 200% of his then current annual base salary; (ii) payout of his pro-rata bonus for the fiscal year in which termination occurred provided Autodesk bonus targets were satisfied, to be paid in one lump sum on or before March 15th of the succeeding fiscal year; (iii) fully accelerated vesting of all of his then outstanding unvested equity awards, including awards that would otherwise vest only upon satisfaction of performance criteria; (iv) a period of not less than twelve (12) months to exercise any vested stock options that were granted to Mr. Bass on or after February 2, 2009 (provided that such options shall expire, if earlier, on the date when they would have expired if his employment had not terminated); and (v) reimbursement for premiums paid for continued health benefits for Mr. Bass and his eligible dependents until the earlier of 18 months following termination or the date Mr. Bass became covered under similar health plans.
Employment Agreement with Carl Bass (effective March 2013)
In March 2013, Autodesk entered into an amended and restated employment agreement with Carl Bass that increases his salary in fiscal 2014 and provides for, among other things, certain payments and benefits to be provided to Mr. Bass in the event his employment is terminated without “cause” or he resigns for “good reason,” including in connection with a “change of control” or following the completion of the Company,a Board requested executive “transition period”, as each such term is defined in Mr. Bass’sBass's employment agreement.
In the event Mr. Bass’sBass's employment is terminated by the CompanyAutodesk without cause or if Mr. Bass resigns for good reason, and such termination is not in connection with a change of control, Mr. Bass will receive (i) payment of 200 percent200% of his then current base salary for 12 months,months; (ii) payout of his pro-rata bonus for the fiscal year in which termination occurs provided Autodesk bonus targets are satisfied, to be paid in one lump sum on or before March 15th of the succeeding fiscal year; (iii) fully accelerated vesting for 12 months of all of his then-outstanding, unvested equity awards (other than any awards that vest in whole or in part based on performance); (iv) with respect to his then outstanding unvested equity awards (other than awards that vest in whole or in part based on performance), (iii)performance, those awards will vest, as if he had remained continuously employed by Autodesk through the end of the 12-month performance period in which his employment is terminated, based on the extent, if any, that the underlying performance criteria for those awards are satisfied for that performance period; (v) a period of not less than 612 months to exercise any vested stock options that were granted to Mr. Bass on or after February 2, 2009 (provided that such options shall expire, if earlier, on the date he entered intowhen they would have expired if his amendedemployment had not terminated); and restated employment agreement, and (iv)(vi) reimbursement for premiums paid for continued health benefits for Mr. Bass and his eligible dependents until the earlier of 12 months following termination or the date Mr. Bass becomes covered under similar health plans. In addition, Mr. Bass is subject to non-solicitation and non-competition covenants for 12 months following a termination that gives rise to the severance benefits discussed above.
If, in connection with a change of control, Mr. Bass’sBass's employment is terminated by the CompanyAutodesk without cause or if Mr. Bass resigns for good reason, Mr. Bass will receive (i) a lump sum payment in an amount equal to 200 percent200% of his then current annual base salary,salary; (ii) payout of his pro-rata bonus for the fiscal year of Autodesk in which termination occurs provided Autodesk bonus targets are satisfied, to be
Special Meeting Proxy Statement 48
paid in one lump sum on or before March 15th of the succeeding fiscal year; (iii) fully accelerated vesting for 24 monthsof all of his then outstanding unvested equity awards, (other thanincluding awards that would otherwise vest based on performance), (iii)only upon satisfaction of performance criteria; (iv) a period of not less than 6twelve (12) months to exercise any vested stock options that were granted to Mr. Bass by Autodesk on or after February 2, 2009 (provided that such options shall expire, if earlier, on the date ofwhen they would have expired if his amendedemployment had not terminated); and restated employment agreement, and (iv)(v) reimbursement for premiums paid for continued health benefits for Mr. Bass and his eligible dependents until the earlier of 1218 months following termination or the date Mr. Bass becomes covered under similar health plans. Separation Agreement with Ken Bado
In January 2011, the Company entered into a separation agreement with Ken Bado (the “Separation Agreement”). Pursuant to the terms and conditions of the Separation Agreement, effective as of January 31, 2011, Mr. Bado’s service as the Executive Vice President, Sales and Services of the Company terminated. Mr. Bado will continue as an employee providing transitional services through March 28, 2011. Mr. Bado will receive (a) a lump-sum severance payment of $55,385, equal to six weeks of Mr. Bado’s base salary effective as of January 31, 2011, in connection with Mr. Bado’s release of claims against the Company; (b) continued salary, vesting and employee health care benefits through March 28, 2011, in connection with Mr. Bado’s transitional services to the Company; and (c) a special payment of $362,692, equal to twenty-three weeks of Mr. Bado’s base salary as of January 31, 2011 plus target variables, payable in two equal payments of $181,346 on each of September 1, 2011 and January 31, 2012, in connection with continued compliance with the terms of the Separation Agreement, including certain non-competition and non-solicitation obligations undertaken by Mr. Bado.
Potential Payments Upon Termination or Change in Control
The tables below list the estimated amount of compensation payable to each of the Named Executive Officers in the event of voluntary termination, involuntary not-for-cause termination, for cause termination, termination following a change in control, and termination in the event of disability or death of the executive. The amounts shown for all Named Executive Officers other than Mr. Bado assume that such termination was effective as of January 31, 2011,2013, and include amounts earned through such timethat date for all components of compensation, benefits and perquisites payable under the Executive Change in Control Program effective during the 20112013 fiscal year. Mr. Bass does not participate in the Executive Change in Control Program. Amounts for Mr. Bass also include certain items specified in his employment agreement, discussed above. Amounts for Mr. Bado reflect his resignation as Executive Vice President, Sales and Services as of January 31, 2011, and include amounts earned through such time for all components of compensation, benefits and perquisites payable under the Executive Change in Control Program effective during the 2011 fiscal year. Estimated amounts for share-based compensation are based on the closing price of our common stockCommon Stock on the NASDAQ Global Select Market on Monday, Thursday, January 31, 2011,2013, which was $40.68$38.88 per share. The actual amounts for all Named Executive Officers other than Mr. Bado to be paid out can only be determined at the time of such executive’s separation from the Company.separation.
Special Meeting Proxy Statement 49
Carl Bass: | | | | | | | | | | | | | | | | | | | | | | | | | Executive Benefits and Payments | | Voluntary Termination on 1/31/2011 ($) | | | Involuntary Not For Cause or Voluntary for Good Reason (Except Change in Control) Termination on 1/31/2011 ($) | | | For Cause Termination on 1/31/2011 ($) | | | Involuntary Not for Cause or Voluntary For Good Reason (Change in Control) Termination on 1/31/2011 ($) | | | Disability on 1/31/2011 ($) | | | Death on 1/31/2011 ($) | | Compensation: | | | | | | | | | | | | | | | | | | | | | | | | | Base Salary (1) | | $ | — | | | $ | 1,800,000 | | | $ | — | | | $ | 1,800,000 | | | $ | — | | | $ | — | | Short-Term Cash Incentive Plan (EIP) (2) | | | 1,429,000 | | | | 1,429,000 | | | | 1,429,000 | | | | 1,429,000 | | | | 1,429,000 | | | | 1,429,000 | | Stock Awards (3) | | | — | | | | 7,396,898 | | | | — | | | | 12,274,635 | | | | — | | | | — | | | | | | | | | Benefits and perquisites: | | | | | | | | | | | | | | | | | | | | | | | | | Health Insurance (4) | | | — | | | | 19,840 | | | | — | | | | 19,840 | | | | — | | | | — | | Disability Income (5) | | | — | | | | — | | | | — | | | | — | | | | 2,190,314 | | | | — | | Accidental Death or Dismemberment (6) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Life Insurance (7) | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1,800,000 | | Accrued Vacation Pay (8) | | | 3,462 | | | | 3,462 | | | | 3,462 | | | | 3,462 | | | | 3,462 | | | | 3,462 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total Executive Benefits and Payments Upon Separation | | $ | 1,432,462 | | | $ | 10,649,200 | | | $ | 1,432,462 | | | $ | 15,526,937 | | | $ | 3,622,776 | | | $ | 3,232,462 | | | | | | | | | | | | | | | | | | | | | | | | | | |
Bass
| | | | | | | | | | | | | | | | | | | | Executive Benefits and Payments | | Voluntary Termination on 1/31/2013 ($) | | Involuntary Not For Cause or Voluntary for Good Reason (Except Change in Control) Termination on 1/31/2013 ($) | | For Cause Termination on 1/31/2013 ($) | | Involuntary Not for Cause or Voluntary For Good Reason (Change in Control) Termination on 1/31/2013 ($) | | Disability on 1/31/2013 ($) | | Death on 1/31/2013 ($) | Compensation: | | | | | | | | | | | | | Base Salary (1) | | — |
| | 1,980,000 |
| | — |
| | 1,980,000 |
| | — |
| | — |
| Short-Term Cash Incentive Plan (EIP) (2) | | — |
| | — |
| | — |
| | 1,179,667 |
| | — |
| | — |
| Equity Awards (3) | | — |
| | 12,336,102 |
| | — |
| | 17,379,097 |
| | — |
| | — |
| Benefits and perquisites: | | | | | | | | | | | | | Health Insurance (4) | | — |
| | 25,127 |
| | — |
| | 37,690 |
| | 25,127 |
| | — |
| Disability Income (5) | | — |
| | — |
| | — |
| | — |
| | 2,318,937 |
| | — |
| Accidental Death or Dismemberment (6) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Life Insurance (7) | | — |
| | — |
| | — |
| | — |
| | — |
| | 1,980,000 |
| Accrued Vacation Pay (8) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Total Executive Benefits and Payments Upon Separation | | — |
| | 14,341,229 |
| | — |
| | 20,576,454 |
| | 2,344,064 |
| | 1,980,000 |
|
Mark J. Hawkins: | | | | | | | | | | | | | | | | | | | | | | | | | Executive Benefits and Payments | | Voluntary Termination on 1/31/2011 ($) | | | Involuntary Not For Cause or Voluntary for Good Reason (Except Change in Control) Termination on 1/31/2011 ($) | | | For Cause Termination on 1/31/2011 ($) | | | Involuntary Not for Cause or Voluntary For Good Reason (Change in Control) Termination on 1/31/2011 ($) | | | Disability on 1/31/2011 ($) | | | Death on 1/31/2011 ($) | | Compensation: | | | | | | | | | | | | | | | | | | | | | | | | | Base Salary (1) | | $ | — | | | $ | — | | | $ | — | | | $ | 525,000 | | | $ | — | | | $ | — | | Short-Term Cash Incentive Plan (EIP) (2) | | | 500,000 | | | | 500,000 | | | | 500,000 | | | | 925,000 | | | | 500,000 | | | | 500,000 | | Stock Options (3) | | | — | | | | — | | | | — | | | | 1,286,670 | | | | — | | | | — | | | | | | | | | Benefits and perquisites: | | | | | | | | | | | | | | | | | | | | | | | | | Health Insurance (4) | | | — | | | | — | | | | — | | | | 20,561 | | | | — | | | | — | | Disability Income (5) | | | — | | | | — | | | | — | | | | — | | | | 2,289,005 | | | | — | | Accidental Death or Dismemberment (6) | | | — | | | | — | | | | — | | | | — | | | | 1,050,000 | | | | 1,050,000 | | Life Insurance (7) | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1,050,000 | | Accrued Vacation Pay (8) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total Executive Benefits and Payments Upon Separation | | $ | 500,000 | | | $ | 500,000 | | | $ | 500,000 | | | $ | 2,757,231 | | | $ | 3,839,005 | | | $ | 2,600,000 | | | | | | | | | | | | | | | | | | | | | | | | | | |
GeorgeHawkins
| | | | | | | | | | | | | | | | | | | | Executive Benefits and Payments | | Voluntary Termination on 1/31/2013 ($) | | Involuntary Not For Cause or Voluntary for Good Reason (Except Change in Control) Termination on 1/31/2013 ($) | | For Cause Termination on 1/31/2013 ($) | | Involuntary Not for Cause or Voluntary For Good Reason (Change in Control) Termination on 1/31/2013 ($) | | Disability on 1/31/2013 ($) | | Death on 1/31/2013 ($) | Compensation: | | | | | | | | | | | | | Base Salary (1) | | — |
| | — |
| | — |
| | 855,000 |
| | — |
| | — |
| Short-Term Cash Incentive Plan (EIP) (2) | | — |
| | — |
| | — |
| | 655,001 |
| | — |
| | — |
| Equity Awards (3) | | — |
| | — |
| | — |
| | 3,174,622 |
| | — |
| | — |
| Benefits and perquisites: | | | | | | | | | | | | | Health Insurance (4) | | — |
| | — |
| | — |
| | 31,271 |
| | 20,847 |
| | — |
| Disability Income (5) | | — |
| | — |
| | — |
| | — |
| | 2,801,939 |
| | — |
| Accidental Death or Dismemberment (6) | | — |
| | — |
| | — |
| | — |
| | 1,140,000 |
| | 1,140,000 |
| Life Insurance (7) | | — |
| | — |
| | — |
| | — |
| | — |
| | 1,140,000 |
| Total Executive Benefits and Payments Upon Separation | | — |
| | — |
| | — |
| | 4,715,894 |
| | 3,962,786 |
| | 2,280,000 |
|
Special Meeting Proxy Statement 50
Jan Becker
| | | | | | | | | | | | | | | | | | | | Executive Benefits and Payments | | Voluntary Termination on 1/31/2013 ($) | | Involuntary Not For Cause or Voluntary for Good Reason (Except Change in Control) Termination on 1/31/2013 ($) | | For Cause Termination on 1/31/2013 ($) | | Involuntary Not for Cause or Voluntary For Good Reason (Change in Control) Termination on 1/31/2013 ($) | | Disability on 1/31/2013 ($) | | Death on 1/31/2013 ($) | Compensation: | | | | | | | | | | | | | Base Salary (1) | | — |
| | — |
| | — |
| | 592,500 |
| | — |
| | — |
| Short-Term Cash Incentive Plan (EIP) (2) | | — |
| | — |
| | — |
| | 455,000 |
| | — |
| | — |
| Equity Awards (3) | | — |
| | — |
| | — |
| | 2,316,899 |
| | — |
| | — |
| Benefits and perquisites: | | | | | | | | | | | | | Health Insurance (4) | | — |
| | — |
| | — |
| | 31,896 |
| | 21,264 |
| | — |
| Disability Income (5) | | — |
| | — |
| | — |
| | — |
| | 1,563,850 |
| | — |
| Accidental Death or Dismemberment (6) | | — |
| | — |
| | — |
| | — |
| | 395,000 |
| | 395,000 |
| Life Insurance (7) | | — |
| | — |
| | — |
| | — |
| | — |
| | 790,000 |
| Total Executive Benefits and Payments Upon Separation | | — |
| | — |
| | — |
| | 3,396,295 |
| | 1,980,114 |
| | 1,185,000 |
|
Steven M. Bado (9): | | | | | Executive Benefits and Payments | | Voluntary Termination on 1/31/2011 ($) | | Compensation: | | | | | Base Salary (1) | | $ | — | | Short-Term Cash Incentive Plan (EIP) (2) | | | — | | Sales Commissions and Bonus (10) | | | 385,185 | | Stock Options (3) | | | — | | | | Benefits and perquisites: | | | | | Health Insurance (4) | | | — | | Disability Income (5) | | | — | | Accidental Death or Dismemberment (6) | | | — | | Life Insurance (7) | | | — | | Accrued Vacation Pay (8) | | | — | | | | | | | Total Executive Benefits and Payments Upon Separation | | $ | 385,185 | | | | | | |
Jay Bhatt:
| | | | | | | | | | | | | | | | | | | | | | | | | Executive Benefits and Payments | | Voluntary Termination on 1/31/2011 ($) | | | Involuntary Not For Cause or Voluntary for Good Reason (Except Change in Control) Termination on 1/31/2011 ($) | | | For Cause Termination on 1/31/2011 ($) | | | Involuntary Not for Cause or Voluntary For Good Reason (Change in Control) Termination on 1/31/2011 ($) | | | Disability on 1/31/2011 ($) | | | Death on 1/31/2011 ($) | | Compensation: | | | | | | | | | | | | | | | | | | | | | | | | | Base Salary (1) | | $ | — | | | $ | — | | | $ | — | | | $ | 420,000 | | | $ | — | | | $ | — | | Short-Term Cash Incentive Plan (EIP) (2) | | | 400,000 | | | | 400,000 | | | | 400,000 | | | | 691,667 | | | | 400,000 | | | | 400,000 | | Stock Options (3) | | | — | | | | — | | | | — | | | | 1,542,508 | | | | — | | | | — | | | | | | | | | Benefits and perquisites: | | | | | | | | | | | | | | | | | | | | | | | | | Health Insurance (4) | | | — | | | | — | | | | — | | | | 19,215 | | | | — | | | | — | | Disability Income (5) | | | — | | | | — | | | | — | | | | — | | | | 2,718,941 | | | | — | | Accidental Death or Dismemberment (6) | | | — | | | | — | | | | — | | | | — | | | | 2,000,000 | | | | 2,000,000 | | Life Insurance (7) | | | — | | | | — | | | | — | | | | — | | | | — | | | | 2,000,000 | | Accrued Vacation Pay (8) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | Total Executive Benefits and Payments Upon Separation | | $ | 400,000 | | | $ | 400,000 | | | $ | 400,000 | | | $ | 2,673,390 | | | $ | 5,118,941 | | | $ | 4,400,000 | | | | | | | | | | | | | | | | | | | | | | | | | | |
Blum
| | | | | | | | | | | | | | | | | | | | Executive Benefits and Payments | | Voluntary Termination on 1/31/2013 ($) | | Involuntary Not For Cause or Voluntary for Good Reason (Except Change in Control) Termination on 1/31/2013 ($) | | For Cause Termination on 1/31/2013 ($) | | Involuntary Not for Cause or Voluntary For Good Reason (Change in Control) Termination on 1/31/2013 ($) | | Disability on 1/31/2013 ($) | | Death on 1/31/2013 ($) | Compensation: | | | | | | | | | | | | | Base Salary (1) | | — |
| | — |
| | — |
| | 637,500 |
| | — |
| | — |
| Short-Term Cash Incentive Plan (EIP) (2) | | — |
| | — |
| | — |
| | 93,824 |
| | — |
| | — |
| Sales Commissions and Bonus (9) | | — |
| | — |
| | — |
| | 233,873 |
| | — |
| | — |
| Equity Awards (3) | | — |
| | — |
| | — |
| | 2,639,933 |
| | — |
| | — |
| Benefits and perquisites: | | | | | | | | | | | | | Health Insurance (4) | | — |
| | — |
| | — |
| | 37,690 |
| | 25,127 |
| | — |
| Disability Income (5) | | — |
| | — |
| | — |
| | — |
| | 2,955,358 |
| | — |
| Accidental Death or Dismemberment (6) | | — |
| | — |
| | — |
| | — |
| | 2,000,000 |
| | 2,000,000 |
| Life Insurance (7) | | — |
| | — |
| | — |
| | — |
| | — |
| | 2,000,000 |
| Total Executive Benefits and Payments Upon Separation | | — |
| | — |
| | — |
| | 3,642,820 |
| | 4,980,485 |
| | 4,000,000 |
|
Special Meeting Proxy Statement 51
Pascal W. Di Fronzo:Fronzo
| | | | | | | | | | | | | | | | | | | | Executive Benefits and Payments | | Voluntary Termination on 1/31/2013 ($) | | Involuntary Not For Cause or Voluntary for Good Reason (Except Change in Control) Termination on 1/31/2013 ($) | | For Cause Termination on 1/31/2013 ($) | | Involuntary Not for Cause or Voluntary For Good Reason (Change in Control) Termination on 1/31/2013 ($) | | Disability on 1/31/2013 ($) | | Death on 1/31/2013 ($) | Compensation: | | | | | | | | | | | | | Base Salary (1) | | — |
| | — |
| | — |
| | 637,500 |
| | — |
| | — |
| Short-Term Cash Incentive Plan (EIP) (2) | | — |
| | — |
| | — |
| | 478,125 |
| | — |
| | — |
| Equity Awards (3) | | — |
| | — |
| | — |
| | 2,316,899 |
| | — |
| | — |
| Benefits and perquisites: | | | | | | | | | | | | | Health Insurance (4) | | — |
| | — |
| | — |
| | 35,701 |
| | 23,800 |
| | — |
| Disability Income (5) | | — |
| | — |
| | — |
| | — |
| | 2,962,536 |
| | — |
| Accidental Death or Dismemberment (6) | | — |
| | — |
| | — |
| | — |
| | 2,000,000 |
| | 2,000,000 |
| Life Insurance (7) | | — |
| | — |
| | — |
| | — |
| | — |
| | 2,000,000 |
| Total Executive Benefits and Payments Upon Separation | | — |
| | — |
| | — |
| | 3,468,225 |
| | 4,986,336 |
| | 4,000,000 |
|
Amar Hanspal
| | | | | | | | | | | | | | | | | | | | Executive Benefits and Payments | | Voluntary Termination on 1/31/2013 ($) | | Involuntary Not For Cause or Voluntary for Good Reason (Except Change in Control) Termination on 1/31/2013 ($) | | For Cause Termination on 1/31/2013 ($) | | Involuntary Not for Cause or Voluntary For Good Reason (Change in Control) Termination on 1/31/2013 ($) | | Disability on 1/31/2013 ($) | | Death on 1/31/2013 ($) | Compensation: | | | | | | | | | | | | | Base Salary (1) | | — |
| | — |
| | — |
| | 607,500 |
| | — |
| | — |
| Short-Term Cash Incentive Plan (EIP) (2) | | — |
| | — |
| | — |
| | 449,375 |
| | — |
| | — |
| Equity Awards (3) | | — |
| | — |
| | — |
| | 2,631,787 |
| | — |
| | — |
| Benefits and perquisites: | | | | | | | | | | | | | Health Insurance (4) | | — |
| | — |
| | — |
| | 37,690 |
| | 25,127 |
| | — |
| Disability Income (5) | | — |
| | — |
| | — |
| | — |
| | 2,845,114 |
| | — |
| Accidental Death or Dismemberment (6) | | — |
| | — |
| | — |
| | — |
| | 2,000,000 |
| | 2,000,000 |
| Life Insurance (7) | | — |
| | — |
| | — |
| | — |
| | — |
| | 2,000,000 |
| Total Executive Benefits and Payments Upon Separation | | — |
| | — |
| | — |
| | 3,726,352 |
| | 4,870,241 |
| | 4,000,000 |
|
Special Meeting Proxy Statement 52
Robert Kross
| | | | | | | | | | | | | | | | | | | | Executive Benefits and Payments | | Voluntary Termination on 1/31/2013 ($) | | Involuntary Not For Cause or Voluntary for Good Reason (Except Change in Control) Termination on 1/31/2013 ($) | | For Cause Termination on 1/31/2013 ($) | | Involuntary Not for Cause or Voluntary For Good Reason (Change in Control) Termination on 1/31/2013 ($) | | Disability on 1/31/2013 ($) | | Death on 1/31/2013 ($) | Compensation: | | | | | | | | | | | | | Base Salary (1) | | — |
| | — |
| | — |
| | 592,500 |
| | — |
| | — |
| Short-Term Cash Incentive Plan (EIP) (2) | | — |
| | — |
| | — |
| | 472,500 |
| | — |
| | — |
| Equity Awards (3) | | — |
| | — |
| | — |
| | 2,316,898 |
| | — |
| | — |
| Benefits and perquisites: | | | | | | | | | | | | | Health Insurance (4) | | — |
| | — |
| | — |
| | 26,735 |
| | 17,824 |
| | — |
| Disability Income (5) | | — |
| | — |
| | — |
| | — |
| | 1,670,500 |
| | — |
| Accidental Death or Dismemberment (6) | | — |
| | — |
| | — |
| | — |
| | 790,000 |
| | 790,000 |
| Life Insurance (7) | | — |
| | — |
| | — |
| | — |
| | — |
| | 395,000 |
| Total Executive Benefits and Payments Upon Separation | | — |
|
| — |
|
| — |
|
| 3,408,633 |
|
| 2,478,324 |
|
| 1,185,000 |
|
_____________ | | | | | | | | | | | | | | | | | | | | | | | | | Executive Benefits and Payments | | Voluntary Termination on 1/31/2011 ($) | | | Involuntary Not For Cause or Voluntary for Good Reason (Except Change in Control) Termination on 1/31/2011 ($) | | | For Cause Termination on 1/31/2011 ($) | | | Involuntary Not for Cause or Voluntary For Good Reason (Change in Control) Termination on 1/31/2011 ($) | | | Disability on 1/31/2011 ($) | | | Death on 1/31/2011 ($) | | Compensation: | | | | | | | | | | | | | | | | | | | | | | | | | Base Salary (1) | | $ | — | | | $ | — | | | $ | — | | | $ | 355,000 | | | $ | — | | | $ | — | | Short-Term Cash Incentive Plan (EIP) (2) | | | 340,000 | | | | 340,000 | | | | 340,000 | | | | 600,417 | | | | 340,000 | | | | 340,000 | | Stock options (3) | | | — | | | | — | | | | — | | | | 1,277,558 | | | | — | | | | — | | Benefits and perquisites: | | | | | | | | | | | | | | | | | | | | | | | | | Health Insurance (4) | | | — | | | | — | | | | — | | | | 17,666 | | | | — | | | | — | | Disability Income (5) | | | — | | | | — | | | | — | | | | — | | | | 2,538,805 | | | | — | | Accidental Death or Dismemberment (6) | | | — | | | | — | | | | — | | | | — | | | | 2,000,000 | | | | 2,000,000 | | Life Insurance (7) | | | — | | | | — | | | | — | | | | — | | | | — | | | | 2,000,000 | | Accrued Vacation Pay (8) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | Total Executive Benefits and Payments Upon Separation | | $ | 340,000 | | | $ | 340,000 | | | $ | 340,000 | | | $ | 2,250,641 | | | $ | 4,878,805 | | | $ | 4,340,000 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (1) | Base Salary: For Mr. Bass, the amounts shown would be paid in accordance with his employment agreement.agreement that was in effect as of January 31, 2013. For Mr. Hawkins, Mr. Bhatt and Mr. Di Fronzo,the other Named Executive Officers, the amounts shown would be paid in accordance with the Executive Change in Control Program effective during the 20112013 fiscal year. |
| | (2) | Short-Term Cash Incentive Plan (EIP): For Mr. Bass, amounts reflect the sum of the fiscal 2011 short-term cash incentive already earned under the short-term cash incentive plan. For Mr. Hawkins, Mr. Bhatt and Mr. Di Fronzo, amounts in the Voluntary Termination, Involuntary Not for Cause or Voluntary for Good Reason (Except in Change in Control) Termination, For Cause Termination, Disability and Death columns reflect the fiscal 2011 short-term cash incentive already earned under the short-term cash incentive plan. For Mr. Bhatt and Mr. Di Fronzo, the amounts shown would be paid in accordance with his employment agreement that was in effect as of January 31, 2013. For the Involuntary Not for Cause or Voluntary for Good Reason (Changeother Named Executive Officers, the amounts shown would be paid in Control) Termination column are the sum of the fiscal 2011 short-term cash incentive already earned under the short-term cash incentive plan and a severance bonus equal to the average of the last three years’ short-term cash incentives underaccordance with the Executive Change in Control Program effective during the 20112013 fiscal year. For Mr. Hawkins, the amount in the Involuntary Not for Cause or Voluntary for Good Reason (Change in Control) Termination column is the sum of the fiscal 2011 short-term cash incentive already earned under the short-term cash incentive plan and a severance bonus equal to the average of the last two years’ bonuses under the Executive Change in Control Program effective during the 2011 fiscal year as Mr. Hawkins did not participate in the short-term cash incentive plan prior to fiscal 2010. These amounts are based on the cash value of the short-term cash incentive plan, regardless of the executive officers’ election to defer part of their short-term cash incentive as restricted stock unitsRSUs under the Equity Incentive Deferral Plan. |
| | (3) | Stock Options:Equity Awards: For Mr. Hawkins, Mr. Bhatt and Mr. Di FronzoBass, the amounts shown in the Involuntary Not for Cause or Voluntary For Good Reason (Change in Control) Termination columns reflect the value of their outstanding stock optionsunvested equity awards accelerated in accordance with his employment agreement that would normally have vestedwas in effect as of January 31, 2013. For the twelve months following their separation but areother Named Executive Officers, the amounts shown reflect the value of unvested equity awards accelerated (i.e., vest immediately on the date of separation) in accordance with the Executive Change in Control Program agreement effective during the 20112013 fiscal year. For purposes of this tableReported values are based on (i) the valueexcess of the outstandingclosing price of our Common Stock on January 31, 2013 ($38.88 per share), over the exercise price with respect to unvested stock options, that vest is determined based uponand (ii) the pro rata grant date fair valueclosing price of our Common Stock on January 31, 2013 ($38.88 per share) in the case of RSUs and PSUs.
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| these options. | (4) | Health Insurance: For Mr. Bass, in accordance with his employment agreement that was in effect as of January 31, 2013, these amounts represent the cost of continuing coverage for Mr. Bass and his dependents. The amount shown in the Involuntary Not for Cause or Voluntary for Good Reason (Except Change in Control) Termination column reflects the value realized upon immediate vesting of his stock awards normally vesting in the twelve months following his separation, and theof coverage after separation. The amounts in the Involuntary Not for Cause or Voluntary for Good Reason (Change in Control) Termination column reflects eighteen months of coverage after separation. For the value realized upon immediate vesting of his stock awards normally vesting in the twenty-four months following his separation. |
(4) | Health Insurance: For Mr. Bass, in accordance with his employment agreement, these amounts represent the cost of continuing coverage for Mr. Bass and his dependents for twelve months. For Mr. Hawkins, Mr. Bhatt and Mr. Di Fronzo,other Named Executive Officers, these amounts represent the cost of continuing coverage for medical and dental benefits for each executive and theirhis or her dependents (i) in the case of the Disability column, for twelve months in accordance with Autodesk's benefits program, and (ii) in the case of the Involuntary Not for Cause or Voluntary for Good Reason (Change in Control) Termination column, for eighteen months after separation in accordance with the Executive Change in Control Program effective during the 20112013 fiscal year. |
| | (5) | Disability Income: Reflects the estimated present value of all future payments to each executive under theirhis or her elected disability program, which represent 100 percent100% of base salary for the first 90 days, and then 66- 2/3 percent 2/3% of salary thereafter, with a maximum of $20,000 per month, until the age of 65. These payments would be made by the insurance provider, not by Autodesk. |
| | (6) | Accidental Death or Dismemberment: Reflects the lump-sum amount payable to each executive or his or her beneficiaries by Autodesk’s insurance provider in the event of eachthe executive’s accidental death. There is also a prorated lump sum payment for dismemberment. The amount shown as payable upon dismemberment is based upon the payout for the most severe dismemberment under the plan. |
| | (7) | Life Insurance: Reflects the lump-sum amount payable to beneficiaries by Autodesk’s insurance provider in the event of eachthe executive’s death. |
| | (8) | Accrued Vacation Pay:As of At January 31, 2011, all U.S. executives, excluding2013, Mr. Bass no longer accrue vacation. Therefore, Mr. Hawkins, Mr. Bhatt and Mr. Di Fronzo had no accrued vacation at January 31, 2011. The balance for Mr. Bass reflects the lump-sum amount payable for accrued but unused vacation time.vacation. |
| | (9) | For Mr. Bado, the amounts shown are the amounts he actually received following his resignation on January 31, 2011. |
(10) | Sales Commissions and Bonus: Reflects For Mr. Blum, amounts earned inreflect the fourth quarter of fiscal 2011 by Mr. Bado, which were paid in the first quarter of fiscal 2012.2013 sales commissions and bonuses earned. |
Special Meeting Proxy Statement 53
Compensation of Directors
During fiscal 2011,2013, our non-employee directors, Crawford W. Beveridge, J. Hallam Dawson, Per-Kristian Halvorsen, Mary T. McDowell, Lorrie M. Norrington, Charles J. Robel, Stacy J. Smith and Steven M. West, were eligible to receive the annual compensation set forth below: | | | Member of the Board of Directors
| | $75,000 | Non-executive Chairman of the Company
| | an additional $65,000 | Chair of the Audit Committee
| | an additional $25,000 | Chair of the Compensation and Human Resources Committee
| | an additional $20,000 | Chair of the Corporate Governance and Nominating Committee
| | an additional $10,000 |
| | | | | | Member of the Board of Directors | $75,000 and 8,300 RSUs | | Non-executive Chairman of the Board | an additional | $ | 65,000 |
| Chair of the Audit Committee | an additional | $ | 25,000 |
| Chair of the Compensation and Human Resources Committee | an additional | $ | 20,000 |
| Chair of the Corporate Governance and Nominating Committee | an additional | $ | 10,000 |
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The annual compensation cycle for non-employee directors begins on the date of the annual stockholders’stockholders' meeting and ends on the date of the next annual stockholders meeting (“Directors’Directors' Compensation Cycle”). Director compensation in the tables below represents the portion of annual compensation with respect to service during Autodesk’sAutodesk's fiscal year 2011. No later than December 31 of2013.
For the year prior to a director’s re-election to the Board of Directors,June 16, 2011 through June 7, 2012 Directors' Compensation Cycle, each director maycould elect to receive up to 50 percent50% of theirhis or her annual fee in cash, with the balance paid in the form of restricted stock issued at a rate of $1.20 worth of stock for each $1.00 of cash compensation foregone. The restricted stock iswas issued at the beginning of the Directors’Directors' Compensation Cycle on the date of the annual meeting of stockholders and vestsvested on the date of the annual meeting of stockholders in the following year, provided that the recipient was a director on such date. For the period from June 16, 2011 through June 7, 2012, all of our non-employee directors, except Mr. Beveridge, Ms. McDowell, Mr. Robel, and Mr. West, elected to convert 100% of the cash portion of their annual fees to restricted stock; Mr. Beveridge, Ms. McDowell, and Mr. West elected to receive 50% of their annual fees in the form of restricted stock; Mr. Robel elected to receive 60% of his annual fees in the form of restricted stock.
Starting with the annual meeting on June 7, 2012, each director can elect to receive up to 100% of his or her annual fees in the form of RSUs issued at a rate of $1.20 worth of stock for each $1.00 of cash compensation foregone. The RSUs are issued at the beginning of the Directors' Compensation Cycle on the date of the annual meeting of stockholders and will vest on the date of the annual meeting of stockholders in the following year, provided that the recipient is a director on such date. For the period from June 11, 20097, 2012 through June 10, 2010,13, 2013, all of our non-employee directors, except Ms. McDowell, Ms. NelsonMr. Beveridge, Mr. Robel, and Mr. West, elected to convert 100 percent100% of the cash portion of their annual fees to restricted stock; Ms. McDowell, Ms. NelsonRSUs. Mr. Beveridge did not elect to receive any portion of his annual fees in the form of RSUs and instead received 100% cash. Mr. Robel elected to receive 80% of his annual fees in the form of RSUs. Mr. West elected to receive 50 percent of their annual fees in cash. For the period from June 11, 2010 throughJune 10, 2011, all of our non-employee directors, except Mr. Robel, Ms. McDowell and Mr. West, elected to convert 100 percent of the cash portion of their annual fees to restricted stock; Ms. McDowell and Mr. West elected to receive 50 percent of their annual fees in cash; Mr. Robel elected to receive 40 percent20% of his annual fees in cash. Accordingly, the amounts above reflect actual fees earned in cash by Mr. Robel, Ms. Dowell and Mr. West during fiscal 2011. form of RSUs.
If elected, cash compensation is accrued monthly and paid quarterly, in arrears. Additionally, the Company’s 2010
Autodesk's 2012 Outside Directors’Directors' Stock Plan provides for the automatic grant of nonstatutory stock optionsRSUs to our non-employee directors. Upon being elected or appointed to our Board, of Directors, each non-employee director is grantedprovided an option to purchase 50,000 sharesinitial grant of our Common Stock,12,400 RSUs, with subsequent annual equity grants of 20,000 shares of our Common Stock.8,300 RSUs (“Subsequent Annual RSUs”). The exercise price of optionsRSUs granted under the 20102012 Outside Directors’ Stock Plan is equal to the fair value of our Common Stock on the date of grant. Options granted under the 2010 Outside Directors’Directors' Stock Plan upon election or appointment vest over a three-year period; subsequent annual equity grantsSubsequent Annual RSUs vest over a one-year period. Please note that if Proposal Two with respect to the adoption of the 2012 Directors’ Plan is approved, the compensation of the Company’s outside directors will be changed such that instead of stock option awards, the initial equity awards will be granted in the form of 12,400 restricted stock units, annual equity awards will be granted in the form of 8,300 restricted stock units, and each director may elect to receive all, a portion or none of their annual cash retainer in the form of restricted stock units (rather than restricted stock), paid at the rate of 120 percent of the cash dollar amount.
Special Meeting Proxy Statement 54
The table below presents information concerning the compensation paid by us to each of our non-employee directors for the fiscal year ended January 31, 2011.2013. Mr. Bass, who was our employee during the fiscal year ended January 31, 2011,2013, did not receive additional compensation for his service as a director. | | | | | | | | | | | Director (a) | | Fees Earned or Paid in Cash ($) (b) | | Stock Awards ($) (c) | | Total ($) | Crawford W. Beveridge | | 140,000 |
| | 275,893 |
| | 415,893 |
| J. Hallam Dawson | | 75,000 |
| | 285,978 |
| | 360,978 |
| Per-Kristian Halvorsen | | 85,000 |
| | 287,974 |
| | 372,974 |
| Mary T. McDowell | | 75,000 |
| | 283,351 |
| | 358,351 |
| Lorrie M. Norrington | | 75,000 |
| | 283,351 |
| | 358,351 |
| Charles J. Robel | | 100,000 |
| | 285,590 |
| | 385,590 |
| Stacy J. Smith | | 75,000 |
| | 280,736 |
| | 355,736 |
| Steven M. West | | 95,000 |
| | 276,773 |
| | 371,773 |
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________________ | | (a) | Mr. Robel did not seek re-election to the Board at the 2013 Annual Meeting of Stockholders. |
(b)Fees Earned or Paid in Cash reflects the dollar amounts of fees earned. As Ms. Norrington and Mr. Smith did not serve on our Boardnoted above, duringthe 2013 Directors' Compensation Cycle, directors could elect to receive up to 100% of Directors during the fiscal year ended January 31, 2011, they did not receive compensation during that fiscal year and are, therefore, not included in the following tables. Ms. Nelson did not seek re-election to the Board of Directors at the 2010 Annual Meeting held on June 10, 2010, and ceased to be a director on that date. Thetheir compensation in the form of RSUs in lieu of cash. The following tables relates to Ms. Nelson’s services between February 1, 2010 and June 10, 2010. | | | | | | | | | | | | | | | | | Name | | Fees Earned or Paid in Cash ($) (b) | | | Stock Awards ($) (c) | | | Option Awards ($) (c) | | | Total ($) | | Crawford W. Beveridge | | $ | — | | | $ | 167,966 | | | $ | 170,088 | | | $ | 338,054 | | J. Hallam Dawson | | | — | | | | 89,975 | | | | 170,088 | | | | 260,063 | | Per-Kristian Halvorsen | | | — | | | | 101,976 | | | | 170,088 | | | | 272,064 | | Sean M. Maloney * | | | — | | | | 89,975 | | | | 170,088 | | | | 260,063 | | Mary T. McDowell | | | 32,130 | | | | 38,549 | | | | 448,760 | | | | 519,439 | | Elizabeth A. Nelson (a) | | | 13,531 | | | | 16,231 | | | | — | | | | 29,762 | | Charles J. Robel | | | 25,567 | | | | 89,287 | | | | 170,088 | | | | 284,942 | | Steven M. West | | | 47,500 | | | | 56,989 | | | | 170,088 | | | | 274,577 | |
table represents actual cash received by the directors in fiscal 2013 based on their elections. See footnote (c) for more information regarding the RSUs granted in lieu of cash. * | | On November 4, 2011, Mr. Maloney resigned as a member | | | Director | | Fees Actually Paid in Cash ($) | Crawford W. Beveridge | | 115,500 |
| J. Hallam Dawson | | — |
| Per-Kristian Halvorsen | | — |
| Mary T. McDowell | | 13,125 |
| Lorrie M. Norrington | | 13,125 |
| Charles J. Robel | | 27,000 |
| Stacy J. Smith | | 26,250 |
| Steven M. West | | 66,025 |
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(c) The Stock Awards column reflects (i) the grant date fair value of the Subsequent Annual RSUs and (ii) the pro-rata grant date fair value of 20% of the stock awards the directors earned during fiscal 2013 in lieu of cash. The 20% represents thepremium of the board of directors.
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