Adobe 1998 Annual Report Download - page 59

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ADOBE SYSTEMS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
(Continued)
NOTE 10. EMPLOYEE STOCK PLANS (CONTINUED)
On September 23, 1998, the Board of Directors approved a stock option repricing program whereby
each eligible stock option was automatically amended to have an exercise price equal to $33.8125. As a
result, approximately 5,052,000 options were amended by eligible employees for an equal number of
repriced options. All other terms of the options, including expiration dates, remain substantially the same.
On March 22, 1996, the Company offered its employees a stock option repricing program that allowed
the employees to exchange on a two-for-three basis any options priced above the March 29, 1996 closing
price of Adobe stock, which was $32.25. As a result, approximately 1,252,000 options were surrendered by
eligible employees for approximately 834,000 repriced options. The repriced options were not exercisable
until November 1, 1996.
Stock option activity for fiscal 1998, 1997, and 1996 is presented below:
Years Ended
November 27 November 28 November 29
1998 1997 1996
Weighted Weighted Weighted
Average Average Average
Number Exercise Number Exercise Number Exercise
of Shares Price of Shares Price of Shares Price
Outstanding, beginning of year ......... 8,146,235 $31.74 9,297,188 $25.68 10,125,792 $26.30
Granted .......................... 10,713,350 35.06 2,452,117 40.85 2,670,673 33.53
Exercised ......................... (1,988,977) 26.17 (3,063,778) 20.29 (1,470,762) 17.37
Canceled ......................... (6,429,788) 39.08 (539,292) 33.75 (2,028,515) 45.15
Outstanding, end of year ............. 10,440,820 31.68 8,146,235 31.74 9,297,188 25.68
Exercisable, end of year .............. 4,368,318 28.57 4,562,954 26.50 6,057,500 21.63
Weighted-average fair value of options
granted during the year ............. $13.84 $15.68 $12.91
59