Adobe 1999 Annual Report Download - page 68

Download and view the complete annual report

Please find page 68 of the 1999 Adobe annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 90

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90

ADOBE SYSTEMS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
(Continued)
67
NOTE 10. EMPLOYEE STOCK PLANS
Stock option plans
As of December 3, 1999, the Company had reserved 67.0 million shares of common stock for issuance
under its 1994 and 1999 Stock Option Plans (the ‘‘Option Plans’’) for employees, which provides for the
granting of stock options to employees and officers at the fair market value of the Company’s common
stock at the grant date. Initial options granted under the Option Plans generally vest 25% after the first
year and ratably thereafter such that 50% and 100% are vested after the second and third year,
respectively; subsequent options granted under the Option Plans generally vest ratably over the entire term
such that 50% and 100% are vested after the second and third year, respectively. Outstanding option terms
under all of the Company’s employee stock option plans range from five to ten years.
As of December 3, 1999, the Company had reserved 1.0 million shares of common stock for issuance
under its 1996 Outside Directors Stock Option Plan, which provides for the granting of nonqualified stock
options to nonemployee directors. In December 1999, the Company’s Board of Directors approved an
increase in the number of shares reserved under the 1997 Outside Directors Stock Option Plan of 250,000,
to an aggregate of 1.25 million shares, subject to stockholder approval. Option grants are limited to 20,000
shares per person in each fiscal year, except for a new nonemployee director, who is granted 30,000 shares
upon election as a director. All options are exercisable as vested within a ten-year term. Options generally
vest over three years: 25% on the day preceding each of the next two annual meetings of stockholders of
the Company and 50% on the day preceding the third annual meeting of stockholders of the Company
after the grant of the option. The exercise price of the options that are issued is equal to the fair value on
the date of grant. In fiscal 1999, the Company granted options for 40,000 shares with exercise prices of
$29.72. In fiscal 1998, the Company granted options for 100,000 shares with exercise prices of $22.66 and
an option for 30,000 shares to a new director with an exercise price of $21.03. In fiscal 1997, options for
100,000 shares were granted with exercise prices of $20.97.
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 $16.9063. As a
result, approximately 10.1 million 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.