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ADOBE SYSTEMS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
115
Information regarding performance shares outstanding at December 3, 2010 and November 27, 2009 is summarized
below:
Number of
Shares
(thousands)
Weighted
Average
Remaining
Contractual
Life
(years)
Aggregate
Intrinsic
Value(*)
(millions)
2010
Performance shares outstanding...............................................
557
0.58
$
16.2
Performance shares vested and expected to vest .......................
514
0.53
$
14.8
2009
Performance shares outstanding................................................
950
1.05
$
33.6
Performance shares vested and expected to vest .......................
818
0.97
$
28.8
2008
Performance shares outstanding................................................
383
1.20
$
8.9
Performance shares vested and expected to vest .......................
323
1.10
$
7.4
_________________________________________
(*) The intrinsic value is calculated as the market value as of end of the fiscal year. As reported by the NASDAQ Global
Select Market, the market values as of December 3, 2010, November 27, 2009 and November 28, 2008 were $29.14,
$35.38 and $23.16, respectively.
Grants to Non-Employee Directors
The Directors Plan (and starting in fiscal 2008, the 2003 Plan) provides for the granting of nonqualified stock options to
non-employee directors. Options granted before November 29, 2008 vest over four years: 25% on the day preceding each of
our next four annual meetings and have a ten-year term. Starting in fiscal 2009, the initial equity grant to a new non-
employee director is a restricted stock unit award having an aggregate value of $0.5 million based on the average stock price
over the 30 calendar days ending on the day before the date of grant. The initial equity award vests over 2 years, 50% on the
day preceding each of our next 2 annual meetings. For the annual equity grant, a non-employee director can elect to receive
100% options, 100% restricted stock units or 50% of each and shall have an aggregate value of $0.2 million as based on the
average stock price over the 30 calendar days ending on the day before the date of grant. The target grant value of restricted
stock units to stock options will be based on a 3:1 conversion ratio. Annual equity awards granted on or after November 29,
2008 vest 100% on the day preceding the next annual meeting. Options granted on or after November 29, 2008 have a seven-
year term. The exercise price of the options that are issued is equal to the fair market value of our common stock on the date
of grant.
Options granted to directors for fiscal 2010, 2009 and 2008 were as follows (shares in thousands):
2010 2009 2008
Options granted to existing directors ..........................................
18
175
250
Exercise price ..............................................................................
$
33.82
$
23.28
$
37.09
Restricted stock units granted to directors for fiscal 2010 and 2009 were as follows (in thousands):
2010 2009
Restricted stock units granted to existing directors ................................................
48
27
Restricted stock units granted to new directors ......................................................
—
20
Compensation Costs
With the exception of performance shares, stock-based compensation expense is recognized on a straight-line basis over
the requisite service period of the entire award, which is generally the vesting period. For performance shares, expense is
recognized on a straight-line basis over the requisite service period for each vesting tranche of the award.