Adobe 2006 Annual Report Download - page 94

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94
Note 10. Benefit Plans
Pretax Savings Plan
In 1987, we adopted an Employee Investment Plan, qualified under Section 401(k) of the Internal
Revenue Code, which is a pretax savings plan covering substantially all of our United States employees.
Under the plan, eligible employees may contribute up to 65% of their pretax salary, subject to the Internal
Revenue Service annual contribution limits. In fiscal 2006, we matched 50% of the first 6% of the
employee’s contribution. We contributed approximately $11.2 million, $8.9 million and $6.5 million in
fiscal 2006, 2005 and 2004, respectively. We can terminate matching contributions at our discretion.
Profit Sharing Plan
We have a profit sharing plan that provides for profit sharing payments to all eligible employees
following each quarter in which we achieve at least 80% of our budgeted earnings for the quarter. The plan,
as well as the annual operating budget on which the plan is based, is approved by our Board of Directors.
We contributed approximately $51.9 million, $45.7 million and $42.6 million to the plan in fiscal 2006,
2005 and 2004, respectively.
Note 11. Stock-based Compensation
Stock Options
Our stock option program is a long-term retention program that is intended to attract, retain and
provide incentives for talented employees, officers and directors, and to align stockholder and employee
interests. We consider our option programs critical to our operation and productivity. Currently, we grant
options from the 1) 2003 Equity Incentive Plan (“2003 Plan”), under which options could be granted to all
employees, including executive officers, and outside consultants and 2) the 1996 Outside Directors Stock
Option Plan (“Directors Plan”), as amended, under which options are granted automatically under a pre-
determined formula to non-employee directors. In addition, our stock option program includes the 2005
Equity Incentive Assumption Plan (“2005 Assumption Plan”), from which we currently do not grant
options, but may do so in the future. The plans listed above are collectively referred to in the following
discussion as “the Plans.” Option vesting periods are generally three to four years for all of the Plans.
As of December 1, 2006, we had reserved 53.9 million, 5.2 million and 1.3 million shares of common
stock for issuance under our 2003 Plan, Directors Plan and 2005 Assumption Plan, respectively. As of
December 1, 2006, we had 14.2 million, 1.0 million and 1.3 million shares available for grant under our
2003 Plan, Directors Plan and 2005 Assumption Plan, respectively.