Autodesk (ADSK)

Deductibility of Executive Compensation

Beginning in 1994, the Internal Revenue Code of 1986, as amended, limited the federal income tax deductibility of compensation paid to our chief executive and to each of the other four most highly compensated executive officers. For this purpose, compensation can include, in addition to cash compensation, the difference between the exercise price of stock options and the value of the underlying stock on the date of exercise. We may deduct compensation with respect to any of these individuals only to the extent that during any fiscal year such compensation does not exceed $1.0 million or meets certain other conditions enabling it to be characterized as performance-based. Our existing 1996 Stock Plan and new 2006 Stock Plan, which we are asking the stockholders to approve at this Annual Meeting, have been designed to permit this Committee to grant options and other equity compensation awards that are “performance-based” and thus tax-deductible. We also intend to qualify cash incentive compensation under the Executive Incentive Plan, which we are asking the stockholders to approve at this Annual Meeting, for tax deductibility under the Code. However, we may from time to time pay compensation to our executives that may not be deductible.

COMPENSATION AND HUMAN RESOURCES

COMMITTEE OF THE BOARD OF DIRECTORS

Crawford W. Beveridge, Chairman

Per-Kristian Halvorsen

Larry W. Wangberg

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