8-KMaterial Agreements

Autodesk, Inc. 8-K Report, Material Agreement (Jun 14, 2006)

Filed June 14, 2006For Securities:ADSK

Summary

Autodesk, Inc. filed an 8-K on June 14, 2006, to report an amendment to the annual cash compensation for its non-employee directors. Effective June 8, 2006, the company's Board of Directors approved new annual cash compensation amounts for its members, including specific increases for the Lead Director and the Chair of the Audit Committee. This change aims to align director compensation with their responsibilities and industry standards. Furthermore, the filing clarifies the compensation structure, allowing directors to elect to receive up to fifty percent of their compensation in cash, with the remainder paid in restricted stock. This stock component is issued at a premium ($1.20 of stock value for every $1.00 of cash foregone) and is subject to a one-year vesting period, aligning director incentives with long-term shareholder value.

Key Highlights

  • 1Autodesk announced changes to the annual cash compensation for its non-employee directors, effective June 8, 2006.
  • 2The new compensation structure includes updated annual fees for board members, the Lead Director, and chairs of key committees (Audit, Compensation, and Corporate Governance).
  • 3Specifically, the Lead Director will receive an additional $25,000, and the Chair of the Audit Committee will receive an additional $25,000 annually.
  • 4Directors have the option to receive up to 50% of their compensation in restricted stock instead of cash.
  • 5For cash foregone, directors receive restricted stock valued at $1.20 for every $1.00 of cash not taken.
  • 6The restricted stock issued as part of the compensation package vests approximately one year after issuance, aligning director interests with long-term company performance.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report the material definitive agreement concerning changes to the annual cash compensation for Autodesk's non-employee directors, which were approved by the Board of Directors on June 8, 2006.

The annual compensation for non-employee directors has been updated. For instance, a regular board member will receive $75,000 annually. Key roles also have specific additional compensation: the Lead Director receives $25,000, the Chair of the Audit Committee receives $25,000, and the Chair of the Compensation and Human Resources Committee receives $20,000. The Chair of the Corporate Governance and Nominating Committee remains at $10,000.

Directors have the flexibility to elect to receive up to 50% of their annual compensation in the form of restricted stock. For every dollar of cash compensation they choose to forgo, they receive $1.20 worth of restricted stock. This stock is subject to a vesting period of approximately one year from the date of issuance.

The premium on the restricted stock serves as an incentive for directors to elect stock compensation. It aims to further align their financial interests with those of long-term shareholders by encouraging them to hold company stock, which vests over time, and potentially benefit from future stock appreciation.