8-KMaterial AgreementsExhibits & Filings

Autodesk, Inc. 8-K Report, Material Agreement (Sep 22, 2006)

Filed September 22, 2006For Securities:ADSK

Summary

Autodesk, Inc. (ADSK) filed an 8-K report on September 22, 2006, addressing material changes to its stock option and employee stock purchase plans due to its current inability to be current in its SEC reporting obligations. The company's reporting delay has led to a suspension of stock issuances, impacting employees' ability to exercise stock options and participate in the Employee Stock Purchase Plan (ESPP). To mitigate the adverse effects on employees, Autodesk's Board of Directors approved amendments to both programs. These amendments aim to preserve the value and intended benefits for employees. Specifically, the post-termination exercise period for stock options will be extended, and the ESPP will allow for automatic re-enrollment, catch-up contributions for missed deductions, and a one-time cash bonus if the September 30, 2006, ESPP purchase date is missed due to the reporting issue. Investors should note these actions reflect the company's efforts to retain and compensate employees during a period of regulatory compliance challenges.

Key Highlights

  • 1Autodesk is amending stock option agreements to extend the post-termination exercise period for employees whose options would otherwise expire due to the company's delayed SEC reporting.
  • 2The Employee Stock Purchase Plan (ESPP) is being amended to allow for automatic enrollment in the October 1, 2006 offering period.
  • 3Employees participating in the ESPP will have the opportunity to make 'catch-up' payments for payroll deductions missed during the period the company is not current in its reporting.
  • 4A one-time cash bonus is being offered to eligible non-executive employees enrolled in the ESPP, specifically if a purchase cannot be made on the September 30, 2006 exercise date.
  • 5The aggregate estimated cost of this cash bonus is approximately $11 million, based on the stock price as of September 21, 2006.
  • 6These measures are a direct response to Autodesk's inability to be current in its reporting obligations under the Securities Exchange Act of 1934.

Frequently Asked Questions

The primary reason is Autodesk's current inability to be current in its reporting obligations with the Securities and Exchange Commission (SEC). This has temporarily suspended the issuance and sale of its common stock, impacting employees' ability to exercise stock options and participate in the ESPP as usual.

The post-termination exercise period for stock options will be extended. Employees will be able to exercise their options until the later of the original expiration date or thirty days after the company becomes current in its reporting, ensuring they don't lose out due to the reporting delay, up to the original option term limit.

Eligible employees will be automatically enrolled in the October 1, 2006 ESPP offering period unless they opt out. Additionally, employees may be allowed to make 'catch-up' payments for payroll deductions missed during the reporting delay. If the September 30, 2006 purchase date is missed, a one-time cash bonus approximating lost purchase value will be provided.

The company estimates the aggregate amount of the one-time cash bonus for ESPP participants would be approximately $11 million, based on the stock price as of September 21, 2006. This is in addition to the administrative costs associated with managing these plan amendments.