Adobe 2015 Annual Report Download - page 87

Table of Contents
ADOBE SYSTEMS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
87
NOTE 12. STOCK-BASED COMPENSATION
Our stock-based compensation programs are long-term retention programs that are intended to attract, retain and provide
incentives for employees, officers and directors, and to align stockholder and employee interests. We have the following stock-
based compensation plans and programs:
Restricted Stock Unit Plans
We currently grant restricted stock units to eligible employees under our 2003 Equity Incentive Plan, as amended (“2003
Plan”). In February 2015, the Executive Compensation Committee of the Board of Directors retired our remaining share reserves
under the 2005 Equity Incentive Assumption Plan (“2005 Assumption Plan”). Restricted stock units granted under these plans as
part of our annual review process vest annually over three years. Other restricted stock units granted under these plans generally
vest over four years, the majority of which vest 25% annually. Certain grants have other vesting periods approved by our Board
of Directors or an authorized committee of the Board of Directors.
We grant performance awards to officers and key employees under our 2003 Plan. Performance awards granted under this
plan between fiscal 2009 and fiscal 2012 vest annually over three years, and performance awards granted in fiscal 2015, 2014 and
2013 cliff-vest after three years.
As of November 27, 2015, we had reserved 173.2 million shares of common stock for issuance under our 2003 Plan and
had 48.5 million shares available for grant.
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 November 27, 2015, we had reserved 93.0 million shares of our common stock for issuance under the ESPP and
approximately 10.8 million shares remain available for future issuance.
Stock Option Plans
The Executive Compensation Committee of the Board of Directors eliminated the use of stock option grants for all employees
in fiscal 2012. Stock option grants to non-employee directors were minimal in fiscal 2013, and in December 2013 the Board of
Directors eliminated the use of option grants for directors as well.
The 2003 Plan allows us to grant options to all employees, including executive officers, outside consultants and non-
employee directors. This plan 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 and expire seven years from the effective date of grant.
Performance Share Programs
On January 26, 2015, our Executive Compensation Committee approved the 2015 Performance Share Program, including
the award calculation methodology, under the terms of our 2003 Equity Incentive Plan. Under our 2015 Performance Share Program
(“2015 Program”), shares may be earned based on the achievement of an objective relative total stockholder return measured over
a three-year performance period. The purpose of the 2015 Program is to help focus key employees on building stockholder value,
provide significant award potential for achieving outstanding Company performance and enhance the ability of the Company to
attract and retain highly talented and competent individuals. Performance share awards will be awarded and fully vest at the later
of the three-year anniversary of the grant date on January 24, 2018 or the Executive Compensation Committee's certification of
the level of achievement. Participants in the 2015 Program generally have the ability to receive up to 200% of the target number
of shares originally granted.