Adobe 2011 Annual Report Download - page 104

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Deferred Compensation Plan
On September 21, 2006, the Board of Directors approved the Adobe Systems Incorporated Deferred Compensation Plan,
effective December 2, 2006 (the “Deferred Compensation Plan”). The Deferred Compensation Plan is an unfunded, non-qualified,
deferred compensation arrangement under which certain executives and members of the Board of Directors are able to defer a
portion of their annual compensation. Participants may elect to contribute up to 75% of their base salary and 100% of other specified
compensation, including commissions, bonuses, performance-based and time-based restricted stock units, and directors’
fees. Participants are able to elect the payment of benefits to begin on a specified date at least three years after the end of the plan
year in which the election is made in the form of a lump sum or annual installments over five, ten or 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 2, 2011 and December 3, 2010, the invested amounts under the Deferred Compensation Plan
total $12.8 million and $11.1 million, respectively and were recorded as other assets on our Consolidated Balance Sheets. As of
December 2, 2011 and December 3, 2010, $13.2 million and $11.5 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 2, 2011, we had reserved 124.5 million and 5.2 million shares of common stock for issuance under our
2003 Plan and 2005 Assumption Plan, respectively. As of December 2, 2011, we had 33.8 million and 2.7 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 2, 2011, we had reserved 93.0 million shares of our common stock for issuance under the ESPP and
approximately 22.4 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. Performance awards granted after fiscal year 2009 and restricted stock awards
granted under these plans vest annually over three years. Performance awards granted prior to fiscal year 2009 and restricted stock
units granted 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.
In addition to the shares available under our 2003 Plan, as of December 2, 2011, we had reserved 16.0 million shares of
our common stock for issuance under the Restricted Stock Plan and approximately 29.0 thousand shares were available for grant.
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ADOBE SYSTEMS INCORPORATED