Adobe 2001 Annual Report Download - page 84

ADOBE SYSTEMS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
Note 10. Employee Stock Plans (Continued)
generally vest 25% after the first year and ratably thereafter such that 50% and 100% are vested after the
second and third year, respectively; the remaining 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. Options in the 1984 Restated Stock Option Plan have a five year vest and 20% vest after
the first year and monthly thereafter. Outstanding option terms under the Option Plans range from five to
ten years. The 1999 Plan generally has option terms under existing options of eight years. A limited
number of the options granted in fiscal 2000 under the 1999 Plan had a vesting acceleration feature so that
they would vest in full in November 2000 if certain milestones were met by Adobe; if the milestones were
not met, the options would have vested in full in September 2002 (the milestones were met). Those options
expire in September 2003. As of November 30, 2001, approximately 53.6 million shares are reserved for
issuance upon exercise of outstanding options and approximately 11.6 million shares are available for grant
under the Option Plans. The Company’s 1999 Plan has not been approved by the Company’s stockholders.
As of November 30, 2001, we had reserved 2.9 million shares of common stock for issuance under our
1996 Outside Directors Stock Option Plan, as amended (the ‘‘1996 Plan’’) and the 1987 Restricted Stock
Option Plan (collectively, the ‘‘Outside Directors Plans’’). The Outside Directors Plans provide for the
granting of nonqualified stock options to nonemployee directors. Currently, we grant options only from the
1996 Plan. Option grants are limited to 40,000 shares per person in each fiscal year, except for a new
non-employee director, who is granted 60,000 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 Adobe’s next two annual meetings of stockholders and 50% on the day preceding
Adobe’s third annual meeting of stockholders 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 2001, we granted options for
an aggregate of 200,000 shares with an exercise price of $41.06 to existing directors. In fiscal 2000, we
granted options for an aggregate of 160,000 shares with an exercise price of $61.72 to existing directors and
an option for 60,000 shares to a new director with an exercise price of $78.88. In fiscal 1999, we granted
options for an aggregate of 80,000 shares with an exercise price of $14.86 to existing directors. As of
November 30, 2001, approximately 0.6 million shares are reserved for issuance upon exercise of
outstanding options under the Outside Directors Plans and approximately 0.5 million shares are available
for grant under the 1996 Plan.
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