Adobe 2012 Annual Report Download - page 111

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111
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 2012, 2011 and 2010 were as follows (shares in thousands):
2012 2011 2010
Options granted to existing directors ......................................................................... 43 85 18
Exercise price............................................................................................................. $ 33.18 $ 33.23 $ 33.82
Restricted stock units granted to directors for fiscal 2012, 2011 and 2010 were as follows (in thousands):
2012 2011 2010
Restricted stock units granted to existing directors.................................................... 42 28 48
Restricted stock units granted to new directors.......................................................... 41 — —
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.
As of November 30, 2012, there was $456.3 million of unrecognized compensation cost, adjusted for estimated forfeitures,
related to non-vested stock-based awards which will be recognized over a weighted average period of 2.2 years. Total unrecognized
compensation cost will be adjusted for future changes in estimated forfeitures.
Total stock-based compensation costs that have been included in our Consolidated Statements of Income for the fiscal years
ended November 30, 2012, December 2, 2011 and December 3, 2010 were as follows (in thousands):
Income Statement Classifications
Cost of
Revenue–
Subscription
Cost of
Revenue–
Services and
Support Research and
Development Sales and
Marketing General and
Administrative Total(1)
Option Grants and Stock
Purchase Rights
2012................................................... $ 2,840 $ 4,130 $ 24,823 $ 31,379 $ 15,455 $ 78,627
2011................................................... $ 936 $ 4,716 $ 28,132 $ 31,754 $ 20,605 $ 86,143
2010................................................... $ 1,265 $ 1,251 $ 37,221 $ 40,983 $ 21,111 $ 101,831
Restricted Stock and Performance
Share Awards
2012................................................... $ 3,100 $ 9,461 $ 83,349 $ 76,359 $ 47,606 $ 219,875
2011................................................... $ 1,521 $ 8,607 $ 79,427 $ 68,485 $ 41,920 $ 199,960
2010................................................... $ 1,422 $ 1,065 $ 51,387 $ 52,253 $ 23,128 $ 129,255
_________________________________________
(1) During fiscal 2012, 2011 and 2010, we recorded tax benefits of $47.1 million, $58.3 million and $61.5 million, respectively.
Table of Contents
ADOBE SYSTEMS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)