Adobe 2002 Annual Report Download - page 125

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As of November 29, 2002, we had reserved 3.3 million shares of common stock for issuance under our 1996
Outside Directors Stock Option Plan, as amended (the “Directors Plan”). The Directors Plan provides for the
granting of nonqualified stock options to nonemployee directors. 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. Options have a ten-year term and are exercisable and 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
market value of our common stock on the date of grant. In fiscal 2002, we granted options for an aggregate of
240,000 shares with an exercise price of $39.04 to existing directors and an option for 60,000 shares to a new
director with an exercise price of $33.00. 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. As of November 29, 2002, approximately 0.8 million shares were reserved for issuance
upon exercise of outstanding options and approximately 1.0 million shares were available for grant under the
Directors Plan. The Directors Plan will continue until the earlier of (i) termination by the Board or (ii) the date on
which all of the shares available for issuance under the plan have been issued and restrictions on issued shares
have lapsed.
Stock option activity for fiscal 2002, 2001, and 2000 is presented below:
Years Ended
November 29, 2002 November 30, 2001 December 1, 2000
Number of
Options
Outstanding
Weighted
Average
Exercise
Price
Number of
Options
Outstanding
Weighted
Average
Exercise
Price
Number of
Options
Outstanding
Weighted
Average
Exercise Price
Outstanding, beginning of year ... 54,284,317 $ 36.6
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45,017,400 $ 38.2
6
38,149,038 $ 18.56
Granted ........................................ 11,973,680 28.77 19,177,315 28.38 19,669,375 60.90
Exercised ..................................... (3,688,534) 15.99 (4,826,823) 12.55 (8,724,580) 11.17
Canceled ...................................... (4,722,413) 45.20 (5,083,575) 44.89 (4,076,433) 21.15
Outstanding, end of year.............. 57,847,050 35.64 54,284,317 36.66 45,017,400 38.26
Exercisable, end of year............... 26,402,239 35.65 20,844,567 29.27 11,478,693 18.53
Weighted average fair value of
options granted during
the year..................................... $ 13.4
9
$15.2
0
$ 29.89
Information regarding the stock options outstanding at November 29, 2002 is summarized below:
Options Outstanding Options Exercisable
Range of Exercise Prices
Number
Outstanding
Weighted Average
Remaining
Contractual Life
Weighted
Average
Exercise Price
Number
Exercisable
Weighted Average
Exercise Price
$3.38—$4.69 ................... 12,554 0.59 years $ 3.69 12,514 $ 3.69
$5.22—$7.75 ................... 537,681 1.54 years 6.89 521,881 6.89
$7.91—$8.34 ................... 583,241 3.41 years 8.24 579,641 8.24
$8.45 ................................ 4,384,610 3.49 years 8.45 4,345,910 8.45
$9.66—$14.09 ................. 644,558 4.37 years 11.61 642,105 11.61
$14.86—$22.19 ............... 1,019,181 6.40 years 18.31 452,366 18.01
$24.11—$26.47………. 8,948,429 7.87 years 26.40 199,596 24.78
$26.95………………… 6,703,250 6.91 years 26.95 698,196 26.95
$27.00—$27.69 ............... 8,190,232 6.26 years 27.67 2,731,467 27.68
$27.94—$41.78 ............... 11,901,845 5.62 years 36.20 7,912,306 35.58
$44.05—$65.81 ............... 13,722,563 5.56 years 60.22 7,791,807 59.20
$66.63—$83.19 ............... 1,198,906 5.87 years 74.57 514,450 74.53
57,847,050 5.98 years $ 26,402,23
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$35.6
5