Adobe 2001 Annual Report Download - page 83

ADOBE SYSTEMS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
Note 9. Benefit Plans (Continued)
Directors. We contributed approximately $10.3 million, $21.4 million, and $23.2 million to the plan in fiscal
2001, 2000, and 1999, respectively.
Adobe Incentive Partners
In March 1997, as part of our venture investing program, we established an internal limited
partnership, Adobe Incentive Partners, L.P. (‘‘AIP’’), which allows certain of our executive officers to
participate in cash or stock distributions from Adobe’s venture investments. Adobe is both the general
partner and a limited partner of AIP. Other limited partners are executive officers and former executive
officers of Adobe who are or were involved in Adobe’s venture investing activities and whose participation
was deemed critical to the success of the program. No limited partnership interests were granted in fiscal
2001, 2000, or 1999.
Adobe’s Class A senior limited partnership interest includes both a liquidation preference and a
preference in recovery of the cost basis of each specific investment. The executives’ Class B junior limited
partnership interest qualifies for partnership distributions only after (a) Adobe has fully recovered the cost
basis of our investment in the specific investee company for which a distribution is made, and (b) the
participating executive has vested in his or her distribution rights. The distribution rights generally vested
on a monthly basis over three years, such that the rights were 25% vested after one year, 50% vested after
two years, and fully vested at the end of three years. As of June 30, 2000, all existing partnership interests
had fully vested or ceased vesting. The limited partnership investments are restricted to investments in
companies that are private at the time of the establishment of AIP or when the investment is made,
whichever is later. Class B interests may not exceed a maximum of 20% of the venture investments
included in AIP.
Assets held by AIP include Adobe’s entire interests in Adobe Ventures L.P. and Adobe Ventures II,
L.P., as well as securities of certain privately held companies. At November 30, 2001, the cost basis and
recorded fair value of all investments included in AIP were $24.9 million and $12.7 million, respectively. In
fiscal 2001, AIP recorded net loss of $30.1 million. In fiscal 2001, the participating officers received
aggregate distributions of $0.6 million, consisting primarily of equity securities. The distribution to the
officers represents their share of nonmarketable securities that become marketable as a result of a public
offering, as well as their share of cash resulting from investments that were liquidated by AIP. At
November 30, 2001, the minority interest held by the participating officers was $0.5 million and is included
in accrued expenses on the Consolidated Balance Sheet.
Note 10. Employee Stock Plans
Stock Option Plans
As of November 30, 2001, we had reserved 176.2 million shares of common stock for issuance, under
the 1983 Stock Option Plan, 1984 Stock Option Plan, as amended, 1984 Restated Stock Option Plan, 1994
Stock Option Plan (the ‘‘1994 Plan’’), and the 1999 Nonstatutory Stock Option Plan (the ‘‘1999 Plan’’)
(collectively, the ‘‘Option Plans’’), for employees. The Option Plans provide for the granting of stock
options to employees and officers at the fair market value of our common stock at the grant date.
Currently, we grant options only from the 1994 Plan and the 1999 Plan. Initial options and some
subsequent options granted under the Option Plans, except for the 1984 Restated Stock Option Plan,
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