Adobe 1999 Annual Report Download - page 70

ADOBE SYSTEMS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
(Continued)
69
NOTE 10. EMPLOYEE STOCK PLANS (Continued)
Performance and Restricted Stock Plan
The Performance and Restricted Stock Plan (‘‘the Plan’’) provides for the granting of restricted stock
and/or performance awards to officers and key employees. As of December 3, 1999, the Company had
reserved 4.0 million shares of its common stock for issuance under the Plan. Restricted shares issued under
the Plan generally vest annually between two to three years but are considered outstanding at the time of
grant, as the stockholders are entitled to dividends and voting rights. As of December 3, 1999, 565,177
shares were outstanding and not yet vested.
In fiscal 1999, 1998, and 1997, the Company granted 523,960; 37,700; and 259,100, shares of restricted
stock, respectively, and the weighted average fair value of the shares was $45.41, $20.74, and $19.52,
respectively. Additionally, the Company charged $5.3 million, $2.3 million, and $3.5 million to expense
associated with restricted stock in fiscal 1999, 1998, and 1997, respectively.
Performance awards issued under the Plan entitle the recipient to receive, at the discretion of the
Company, shares or cash upon completion of the performance period subject to attaining identified
performance goals. Performance awards are generally measured over a three-year period and cliff vest at
the end of the three-year period. The projected value of these awards is accrued by the Company and
charged to expense over the three-year performance period. As of December 3, 1999; November 27, 1998;
and November 28, 1997, performance awards for 320,360; 403,740; and 341,748 shares were outstanding,
respectively, and $(0.4) million, $(2.2) million, and $1.5 million, was charged (credited) to expense in fiscal
1999, 1998, and 1997, respectively. No performance awards were granted in fiscal 1999. In fiscal 1998 and
1997, performance awards were granted for 243,640 and 313,000 shares, respectively, and the weighted
average fair value of the shares was $17.24 and $19.52, respectively.
Employee Stock Purchase Plan
The Company’s Employee Stock Purchase Plan allows eligible employee participants to purchase
shares of the Company’s common stock at a discount through payroll deductions. For offerings commenc-
ing before September 1998, the plan consists of twenty-four month offering periods with four six-month
purchase periods in each offering period; in September 1998, the plan was amended to reduce the offering
periods for offerings commencing after that date to twelve-month offerings with two six-month purchase
periods in each offering period. As of July 1, 2000, all employees participating in the plan will have twelve-
month offering periods. Employees purchase shares at 85% of the market value at either the beginning of
the offering period or the end of the purchase period, whichever price is lower. As of December 3, 1999,
the Company had reserved 19.0 million shares of its common stock for issuance under this plan, and
approximately 9.2 million shares remain available for future issuance.
The weighted average fair value of the purchase rights granted in fiscal 1999, 1998, and 1997 was
$10.37, $7.93, and $8.18, respectively.