Adobe 2008 Annual Report Download - page 99

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99
Information regarding performance awards achieved and outstanding at November 28, 2008 is as follows:
Number of
Shares
Weighted
Average
Remaining
Contractual
Life
Aggregate
Intrinsic
Value*
(millions)
2008
Shares outstanding................... 383 1.20 years 8.9
Shares vested and expected to vest...... 323 1.10 years 7.4
* The intrinsic value is calculated as the market value as of end of the fiscal year. As reported by
the NASDAQ Global Select Market, the market value as of November 28, 2008 was $23.16.
Compensation Costs
With the exception of performance shares, stock-based compensation expense is recognized on a straight-line basis over
the requisite service period of the entire award, which is generally the vesting period. For performance shares, expense is
recognized on a straight-line basis over the requisite service period for each vesting portion of the award.
As of November 28, 2008, there was $259.5 million of unrecognized compensation cost, adjusted for estimated
forfeitures, related to non-vested stock-based awards which will be recognized over a weighted average period of 2.5 years.
Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures.
Total stock-based compensation costs that have been included in our consolidated statements of income are as follows:
Income Statement Classifications
Cost of
Revenue –
Services
and
Support
Research and
Development
Sales and
Marketing
General and
Administrative
Total
Option Grants and Stock
Purchase Rights
Fiscal 2008*............. $ 3,728 $ 55,653 $ 41,326 $ 24,521 $ 125,228
Fiscal 2007 .............. $ 5,152 $58,579 $41,801 $24,467 $ 129,999
Fiscal 2006 .............. $ 8,180 $ 63,950 $ 66,792 $ 27,121 $ 166,043
Restricted Stock
Fiscal 2008*............. $ 570 $ 20,835 $ 17,928 $ 10,810 $ 50,143
Fiscal 2007 .............. $ 346 $ 9,518 $ 6,084 $ 4,040 $ 19,988
Fiscal 2006 .............. $ — $ 1,678 $ 1,500 $ 1,313 $ 4,491
_________________________________________
* During fiscal 2008, we recorded $2.9 million associated with cash recoveries of fringe benefit tax from
employees in India.
Note 12. Stockholders’ Equity
In the second quarter of fiscal 2006, we concluded a voluntary review of our executive officer grants from 1997 to 2006
and uncovered no improper grants to executive officers. In the fourth quarter of fiscal 2006, we concluded a second
voluntary review, focused principally on grants to non-executive employees from 1997 to 2006. Preliminary results of this
internal review suggested that certain annual grants may have had improper grant dates. The Board of Directors formed a
Special Committee of outside Directors to undertake a broader review of these annual non-executive employee option grants.
The Special Committee enlisted the assistance of independent legal counsel and an independent accounting firm. The Special
Committee uncovered no fraud or intentional wrongdoing. The Special Committee did find certain instances relating to
grants made to employees where the list of employees and/or shares allocated to them was not sufficiently definitive for the