Adobe 2010 Annual Report Download - page 110

ADOBE SYSTEMS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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fifteen years. Upon termination of a participant’ s employment with Adobe, such participant will receive a distribution in the
form of a lump sum payment. All distributions will be made in cash, except for deferred performance-based and time-based
restricted stock units which will be settled in stock. As of December 3, 2010 and November 27, 2009, the invested amounts
under the Deferred Compensation Plan total $11.1 million and $9.0 million, respectively and were recorded as other assets on
our Consolidated Balance Sheets. As of December 3, 2010 and November 27, 2009, $11.5 million and $9.0 million,
respectively, was recorded as long-term liabilities to recognize undistributed deferred compensation due to employees.
NOTE 13. STOCK-BASED COMPENSATION
We have the following stock-based compensation plans and programs:
Stock Option Plans
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. Currently, we grant options from
the 2003 Equity Incentive Plan, as amended (“2003 Plan”), and the 2005 Equity Incentive Assumption Plan (“2005
Assumption Plan”). These plans are collectively referred to in the following discussion as “the Plans.” Under the Plans,
options can be granted to all employees, including executive officers, outside consultants and non-employee directors. The
Plans 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. Option vesting periods are generally
four years for all of the Plans. Options granted under the Plans generally expire seven years from the effective date of grant.
As of December 3, 2010, we had reserved 124.5 million and 4.4 million shares of common stock for issuance under our
2003 Plan and 2005 Assumption Plan, respectively. As of December 3, 2010, we had 46.4 million and 3.9 million shares
available for grant under our 2003 Plan and 2005 Assumption Plan, respectively.
Employee Stock Purchase Plan
Our 1997 Employee Stock Purchase Plan (“ESPP”) allows eligible employee participants to purchase shares of our
common stock at a discount through payroll deductions. The ESPP consists of a twenty-four month offering period with four
six-month purchase periods in each offering period. Employees purchase shares in each purchase period at 85% of the market
value of our common stock at either the beginning of the offering period or the end of the purchase period, whichever price is
lower. The ESPP 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.
As of December 3, 2010, we had reserved 76.0 million shares of our common stock for issuance under the ESPP and
approximately 9.0 million shares remain available for future issuance.
Restricted Stock Plan
We grant restricted stock awards and performance awards to officers and key employees under our Amended 1994
Performance and Restricted Stock Plan (“Restricted Stock Plan”). We can also grant restricted stock units to all eligible
employees under the Restricted Stock Plan and the 2003 Plan. Restricted stock awards issued under these plans vest annually
over three years. Performance awards and restricted stock units issued under these plans generally vest over four years, the
majority of which vest 25% annually; certain restricted stock units vest 50% on the second anniversary and 25% on each of
the third and fourth anniversaries.
As of December 3, 2010, we had reserved 16.0 million shares of our common stock for issuance under the Restricted
Stock Plan and approximately 14.7 thousand shares were available for grant.
Performance Share Programs
Effective January 25, 2010, the Executive Compensation Committee adopted the 2010 Performance Share Program (the
“2010 Program”). The purpose of the 2010 Program is to align key management and senior leadership with stockholders’
interests and to retain key employees. The measurement period for the 2010 Program is our fiscal 2010 year. All members of
our executive management and other key senior leaders are participating in the 2010 Program. Awards granted under the
2010 Program were granted in the form of performance shares pursuant to the terms of our 2003 Equity Incentive Plan. If
pre-determined performance goals are met, shares of stock will be granted to the recipient, with one third vesting on the later
of the date of certification of achievement or the first anniversary date of the grant, and the remaining two thirds vesting
evenly on the following two annual anniversary dates of the grant, contingent upon the recipient’ s continued service to