Adobe 2002 Annual Report Download - page 49

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information that we request from these privately-held companies. This information is not subject to the same
disclosure regulations as U.S. publicly traded companies, and as such, the basis for these evaluations is subject to the
timing and the accuracy of the data received from these companies. If we believe that the carrying value of a
company is carried at an amount in excess of fair value, it is our policy to record a reserve in addition to our equity
method of accounting.
In March 1997, as part of our venture investing program, we established an internal limited partnership, Adobe
Incentive Partners, L.P. (“AIP”), which allowed certain of Adobe’s executive officers to participate in cash or stock
distributions from Adobe’s venture investments. In November 2002, the partnership was liquidated. Immediately
prior to the liquidation, assets held by AIP included Adobe’s entire interests in Adobe Ventures L.P. and Adobe
Ventures II, L.P. and certain equity securities of privately-held companies. Adobe was both the general partner and a
limited partner of AIP. Other limited partners were executive officers and former executive officers of Adobe who
were involved in Adobe’s venture investing activities and whose participation was deemed critical to the success of
the program. No limited partnership interests were granted in fiscal 2002, 2001, or 2000.
Adobe’s Class A senior limited partnership interest in AIP included both a liquidation preference and a
preference in recovery of the cost basis of each specific investment. The executives’ Class B junior limited
partnership interest qualified for partnership distributions only after (a) Adobe had fully recovered the cost basis of
its investment in the specific investee company for which a distribution was made; and (b) the participating
executive had vested in his or her distribution rights. The distribution rights generally vested on a monthly basis over
three years, and were 25% vested after one year, 50% vested after two years and fully vested at the end of three
years. As of June 30, 2000, all existing partnership interests were fully vested or ceased vesting. The limited
partnership investments were restricted to investments in Adobe Ventures or in companies that were private at the
time of the establishment of AIP, or when the investment was made, whichever was later. In fiscal 2002, the current
and former participating officers received cash distributions with an aggregate fair value of $0.6 million, including a
$0.3 million distribution related to the partnership liquidation. At November 29, 2002, due to the partnership
liquidation, there was no minority interest held by the participating officers.
Our equity investments and Adobe Ventures investments in equity securities at November 29, 2002 consisted
of the following companies:
Private Public
Adobe Equity Investments
AvantGo, Inc. X
Classmates Online, Inc. (formerly eCircles, Inc.) X
Datalogics, Inc. X
Digimarc Corporation X
DigitalThink, Inc. X
Engage, Inc. X
InfoGate, Inc. X
JetNet Internetworking Services Inc. X
Objectivity, Inc. X
Open Plains Technology Inc. X
Salon Media Group, Inc. (formerly Salon.com) X
Tumbleweed Communications Corp. X
Vicom Systems, Inc. X
Viewpoint Corporation X
Virage, Inc. X
Winsoft X
Zequra Technologies, Inc. X