8-KLeadership ChangesMaterial AgreementsCorporate Changes+2

Autodesk, Inc. 8-K Report, Material Agreement (Mar 11, 2016)

Filed March 11, 2016For Securities:ADSK

Summary

Autodesk, Inc. (ADSK) has entered into settlement agreements with activist investors Sachem Head Capital Management and Eminence Capital to resolve a potential proxy contest. As part of the agreement, three new directors, Scott Ferguson, Rick Hill, and Jeff Clarke, will join the Board effective March 11, 2016, and will be included in the company's slate for the upcoming 2016 annual meeting. The Board's size will temporarily increase to thirteen directors, then be reduced to a maximum of eleven following the annual meeting. These agreements include specific terms regarding committee appointments for the new directors, board composition changes, and ownership maintenance requirements for Sachem Head and Eminence. The settlement also outlines standstill provisions that restrict the activist investors' actions concerning proxy solicitations, group formations, and extraordinary transactions for a defined period, aiming for a period of stability and orderly governance changes.

Key Highlights

  • 1Autodesk reached settlement agreements with activist investors Sachem Head Capital Management and Eminence Capital to avoid a proxy contest.
  • 2Three new directors, Scott Ferguson, Rick Hill, and Jeff Clarke, have been appointed to the Board, effective March 11, 2016.
  • 3The Board's size will temporarily expand from ten to thirteen directors and will be reduced to a maximum of eleven directors after the 2016 annual meeting.
  • 4The new directors will be placed on key committees: Rick Hill on Corporate Governance, Jeff Clarke on Audit, and Scott Ferguson on Compensation & Human Resources.
  • 5Sachem Head and Eminence have agreed to maintain significant beneficial ownership stakes in Autodesk's common stock.
  • 6Standstill provisions are in place, limiting certain actions by Sachem Head and Eminence regarding proxy solicitations, group formations, and significant transactions until a specified period.
  • 7The company amended its bylaws to reflect the change in the authorized number of directors.

Frequently Asked Questions

The primary reason is to resolve a potential proxy contest with activist investors Sachem Head Capital Management and Eminence Capital, and to effect an orderly change in the composition of Autodesk's Board of Directors ahead of the 2016 annual meeting of stockholders.

The new directors are Scott Ferguson, Rick Hill, and Jeff Clarke. They will be appointed to serve on the Board and will be included in the company's slate for election at the 2016 annual meeting. Specific committee assignments include Rick Hill to the Corporate Governance and Nominating Committee, Jeff Clarke to the Audit Committee, and Scott Ferguson to the Compensation and Human Resources Committee.

The standstill provisions are a set of restrictions agreed upon by Sachem Head and Eminence. These include limitations on soliciting proxies (unless recommended by the Board), forming groups with other shareholders, owning more than 7% of voting securities, engaging in certain extraordinary transactions, and instituting litigation against the company. These provisions are designed to ensure a period of stability and cooperation between the company and the investors.

The Board's size will temporarily increase from ten to thirteen directors with the addition of the three new directors. Following the 2016 annual meeting, the Board size will be reduced to a maximum of eleven directors. The settlement also outlines conditions for the tenure of the new directors and potential replacements.