Exhibit 10.2

 

ADOBE SYSTEMS INCORPORATED

AMENDED 1994 PERFORMANCE AND RESTRICTED STOCK PLAN

(as amended January 24, 2008)

 

1.             Establishment and Purpose.

 

(a)           Establishment.  The Adobe Systems Incorporated 1989 Restricted
Stock Plan was initially adopted on February 9, 1989 (the “Initial Plan”).  The
Initial Plan was amended and restated in its entirety as the “1994 Performance
and Restricted Stock Plan” effective as of August 31, 1994, the date it was
approved by the stockholders of Adobe Systems Incorporated.  This amendment is
effective as of the date it is approved by the Board of Directors of Adobe
Systems Incorporated (the “Board”). The Initial Plan, as amended from time to
time, is referred to as the “Plan.”

 

(b)           Purpose.  The purpose of the Plan is to attract, retain and reward
key employees of Adobe Systems Incorporated and any successor corporation
thereto (collectively referred to as the “Company”), and any present or future
parent and/or subsidiary corporations of the Company (all of whom along with the
Company being individually referred to as a “Participating Company” and
collectively referred to as the “Participating Company Group”), and to motivate
such persons to contribute to the financial success and progress of the
Participating Company Group.  For purposes of the Plan, a parent corporation and
a subsidiary corporation shall be as defined in sections 424(e) and 424(f) of
the Internal Revenue Code of 1986, as amended (the “Code”).  The Plan provides
for the granting of Performance Awards, Restricted Stock and Restricted Stock
Units (each, an “Award”).  All Awards shall be subject to the terms of a written
agreement in the form determined by the Committee (the “Award Agreement”).

 

2.             Administration.

 

(a)           Administration by Committee.  The Plan shall be administered by
one or more committees (individually, a “Committee”) duly appointed by the
Board; provided, however, that with respect to the participation of individuals
who are subject to the provisions of Section 16 of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), or who are divisional officers of the
Participating Company Group, the Plan shall be administered by a Committee
consisting of not less than two directors each of whom is both (i) a
“Non-Employee Director” within the meaning of Rule 16b-3 under the Exchange Act
or any successor rule (“Rule 16b-3”) and (ii) an “outside director” for purposes
of Section 162(m) of the Code and the regulations promulgated thereunder.  The
Committee shall have all of the powers vested in it by the terms of the Plan,
subject to the limitations described herein, including the full and final
authority in its sole discretion to:

 

(i)            select the eligible persons to whom (a “Participant”), and the
time at which, Awards shall be granted under the Plan;

 

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(ii)           determine type of Award granted and the number of shares of
stock, units or other consideration subject to Awards (which need not be
identical);

 

(iii)         determine the terms and conditions of each Award granted,
including, without limitation, the terms of vesting, if any, the effect of a
Participant’s termination of employment with the Participating Company Group,
the method for satisfaction of any tax withholding obligation arising in
connection with any Award, and all other terms and conditions of the Award not
inconsistent with the terms of the Plan;

 

(iv)          determine the performance goals and other conditions, if any, for
the settlement of any Award and whether such goals and conditions have been
satisfied;

 

(v)            determine whether an Award shall be paid in cash, in shares of
stock or in any combination thereof;

 

(vi)          determine whether payment of an Award should be reduced or
eliminated;

 

(vii)         modify or amend any Award, or waive any restrictions or conditions
applicable to any Award;

 

(viii)        accelerate, continue, extend or defer the payment or vesting of
any Award, including with respect to the period following a Participant’s
termination of employment with the Participating Company Group;

 

(ix)          determine the fair market value of the common stock of the
Company;

 

(x)           authorize any person to execute on behalf of the Company any
instrument required to effectuate the grant of an Award;

 

(xi)          prescribe, amend or rescind rules, regulations and policies
relating to the Plan;

 

(xii)         approve one or more forms of agreement for use under the Plan;

 

(xiii)       construe and interpret the Plan and any agreement used under the
Plan and define the terms employed herein and therein;

 

(xiv)        make all other determinations and take such other action with
respect to the Plan and any Award granted hereunder as the Committee may deem
advisable, to the extent permitted by applicable law.

 

All decisions, determinations and interpretations of the Committee shall be
final and binding upon all persons having an interest in the Plan or any Award
granted under the Plan.

 

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(b)           Authority of Officers.  Any officer of a Participating Company
shall have the authority to act on behalf of the Company with respect to any
matter, right, obligation, or election which is the responsibility of or which
is allocated to the Company herein, provided the officer has apparent authority
with respect to such matter, right, obligation, or election.

 

3.             Eligibility.  Key employees of the Participating Company Group
are eligible to participate in the Plan.  The Committee shall, in the
Committee’s sole discretion, determine which individuals shall be granted Awards
under the Plan.

 

4.             Shares Subject to Plan.  Shares issued pursuant to the Plan shall
be authorized but unissued shares of the common stock of the Company (the
“Stock”).  Subject to adjustment as provided in Section 5, the maximum number of
shares of Stock that may be issued under the Plan is 16,000,000 (reflecting
Stock splits on October 26, 1999, October 24, 2000 and May 23, 2005).  In the
event that any Award granted under the Plan denominated in shares for any reason
expires or is canceled, terminated or paid in cash, or shares of Stock subject
to forfeiture are forfeited to the Company, the shares allocable to such Award
or such forfeited shares shall again be available for issuance under the Plan. 
Notwithstanding the foregoing, any such shares shall be made subject to a new
Award only if the grant of such new Award and the issuance of such shares
pursuant to such new Award would not cause the Plan or any Award granted under
the Plan to contravene Rule 16b-3.

 

5.             Adjustments for Changes in Capital Structure.  Appropriate
adjustments shall be made in the number and class of shares of Stock subject to
the Plan, in the maximum number of shares set forth in Section 7(f), and to any
Awards outstanding under the Plan (including appropriate adjustments to the
Performance Goals), in the event of a stock dividend, stock split, reverse stock
split, recapitalization, combination, reclassification or like change in the
capital structure of the Company.  In the event a majority of the shares which
are of the same class as the shares that are subject to outstanding Awards under
the Plan are exchanged for, converted into, or otherwise become shares of
another corporation (the “New Shares”), the Company may unilaterally amend
outstanding Awards to provide that such Awards may be settled in New Shares.  In
the event of any such amendment, the number of shares shall be adjusted in a
fair and equitable manner.  Any and all new, substituted or additional shares or
Performance Shares (as defined below) received by a Participant pursuant to this
Section 5 will be subject to the applicable restrictions set forth in the
agreement evidencing an Award as if such shares or Performance Shares were part
of the original Award.

 

6.             Term of Plan.  The Plan shall continue in effect until terminated
by the Board or Committee or until all of the shares of Stock available for
issuance under the Plan have been issued and all restrictions on such shares
under the terms of the Plan and the agreements evidencing such Awards have
lapsed.

 

7.             Performance Awards.

 

(a)           Types of Performance Awards.  The Committee may from time to time
grant Awards under this Section 7 (“Performance Awards”) which are
Performance-Based Restricted Stock, Performance Shares, or Performance Units. 
Performance Awards shall be

 

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evidenced by written Award Agreements, in such form as the Committee shall from
time to time establish, specifying the number of shares of Stock or the dollar
amount covered thereby, the performance goals established by the Committee, the
period in which such goals are to be met and the other terms, conditions and
restrictions of the Award, which Award Agreements may incorporate all or any of
the terms of the Plan by reference.  Except to the extent required by applicable
law, the Committee shall not require a Participant to make any monetary payment
(other than applicable tax withholding) as a condition of receiving a
Performance Award.

 

(i)            “Performance-Based Restricted Stock” shall mean shares of Stock
awarded to a Participant which, in accordance with rules established by the
Committee prior to the grant of such Award, are subject to forfeiture in full or
in part or with respect to which additional shares of Stock may be granted on
the basis of the degree of attainment of Performance Goals (as defined below)
within a Performance Period (as defined below).  Shares of Performance-Based
Restricted Stock shall be evidenced in such manner as the Committee may deem
appropriate, including by book-entry registration or issuance of one or more
stock certificates.  Any certificate issued in respect of shares of
Performance-Based Restricted Stock shall be registered in the name of the
Participant and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Award.  The Committee may
require that such certificates be held in the custody of the Company or other
escrow agent until the restrictions thereon lapse.

 

(ii)           “Performance Shares” shall mean bookkeeping units, denominated in
shares of Stock, awarded to a Participant which, in accordance with
rules established by the Committee prior to the grant of such Award, are subject
to forfeiture in full or in part or with respect to which additional shares of
Stock, or additional bookkeeping units, denominated in shares of Stock, may be
granted on the basis of the degree of attainment of Performance Goals (as
defined below) within a Performance Period (as defined below).

 

(iii)         “Performance Units” shall mean bookkeeping units, denominated in
dollar amounts, awarded to a Participant which, in accordance with
rules established by the Committee prior to the grant of such Award, are subject
to forfeiture in full or in part or with respect to which additional such units
may be granted on the basis of the degree of attainment of Performance Goals (as
defined below) within a Performance Period (as defined below).

 

(b)           Performance Goals and Performance Period.  Unless otherwise
permitted in compliance with the requirements of Section 162(m) of the Code with
respect to “performance-based compensation,” the Committee shall establish with
respect to one or more of the Performance Factors set forth below the target
levels of attainment of such Performance Factors (collectively, “Performance
Goals”) which, when measured at the end of the Performance Period (as defined
below), in accordance with the Performance Award Formula (as defined below),
shall determine the number of shares of Stock, if any, which shall become
nonforfeitable and/or issuable with respect to such Performance Award or the
dollar amount, if any, payable with respect to such Performance Award, and such
Committee actions shall occur no later than the earlier of (i) the date ninety
(90) days after the commencement of the applicable Performance Period or
(ii) the date on which 25% of the Performance Period has elapsed, and, in any
event, at a time when the outcome of the Performance Goals remains substantially
uncertain. 

 

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Once established, the Performance Goals and the Performance Award Formula (as
defined below) shall not be changed during the Performance Period.  The Award
Agreement shall set forth the applicable Performance Goals, Performance Award
Formula, Performance Period, and the number of shares of Stock or dollar amount,
as the case may be, which may be earned by the Participant upon the attainment
of the Performance Goals at the end of the Performance Period.

 

(i)            “Performance Factors” shall have the same meanings as used in the
Company’s financial statements, or, if such terms are not used in the Company’s
financial statements, they shall have the meanings applied pursuant to generally
accepted accounting principles, or as used generally in the Company’s industry. 
Performance Factors shall be calculated with respect to the Company and each
subsidiary corporation consolidated therewith for financial reporting purposes
or such division or other business unit as may be selected by the Committee. 
For purposes of the Plan, the Performance Factors applicable to a Performance
Award shall be calculated in accordance with generally accepted accounting
principles, but prior to the accrual or payment of any Performance Award for the
same Performance Period and excluding the effect (whether positive or negative)
of any change in accounting standards or any extraordinary, unusual or
nonrecurring item, as determined by the Committee, occurring after the
establishment of the Performance Goals applicable to the Performance Award. 
Performance Factors may be one or more of the following, as determined by the
Committee:

 

(A)          growth in revenue;

 

(B)          growth in the market price of the Stock;

 

(C)          operating margin;

 

(D)          gross margin;

 

(E)           operating income;

 

(F)           pre-tax profit;

 

(G)          earnings before interest, taxes and depreciation;

 

(H)          net income;

 

(I)            total return on shares of Stock relative to the increase in an
appropriate index as may be selected by the Committee;

 

(J)           earnings per share;

 

(K)          return on stockholder equity;

 

(L)           return on net assets;

 

(M)          expenses;

 

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(N)          return on capital;

 

(O)          economic value added;

 

(P)           market share; and

 

(Q)          cash flow, as indicated by book earnings before interest, taxes,
depreciation and amortization.

 

(ii)           “Performance Period” shall mean a period established by the
Committee, at the end of which the degree of attainment of the Performance Goals
is measured.  Performance Periods for different Performance Awards, including
Performance Awards made to the same Participant, need not be consecutive.

 

(iii)         “Performance Award Formula” shall mean, for any Performance Award,
a formula or table established by the Committee which provides the basis for
computing the value of a Performance Award at one or more threshold levels of
attainment of the applicable Performance Goal(s) measured at the end of the
applicable Performance Period.

 

(c)           Settlement of Performance Awards.

 

(i)            Determination of Final Value.  As soon as practicable following
the completion of the Performance Period applicable to a Performance Award, the
Committee shall certify in writing the extent to which the applicable
Performance Goals have been attained and the resulting final value of the
Performance Award earned by the Participant and to be paid upon its settlement
in accordance with the applicable Performance Award Formula.

 

(ii)           Discretionary Adjustment of Performance Award Formula.  In its
discretion, the Committee may, either at the time it grants a Performance Award
or at any time thereafter, provide for the positive or negative adjustment of
the Performance Award Formula applicable to a Performance Award granted to any
Participant who is not a “covered employee” within the meaning of
Section 162(m) (a “Covered Employee”) to reflect such Participant’s individual
performance in his or her position with the Company or such other factors as the
Committee may determine.  If permitted under a Covered Employee’s Award
Agreement, the Committee shall have the discretion, on the basis of such
criteria as may be established by the Committee, to reduce some or all of the
value of the Performance Award that would otherwise be paid to the Covered
Employee upon its settlement notwithstanding the attainment of any Performance
Goal and the resulting value of the Performance Award determined in accordance
with the Performance Award Formula.  No such reduction may result in an increase
in the amount payable upon settlement of another Participant’s Performance
Award.

 

(iii)         Effect of Leaves of Absence.  Unless otherwise required by law,
payment of the final value, if any, of a Performance Award held by a Participant
who has taken in excess of thirty (30) days of leaves of absence during a
Performance Period shall be prorated on the basis of the number of days of the
Participant’s service during the Performance Period during which the Participant
was not on a leave of absence.

 

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(iv)          Notice to Participants.  As soon as practicable following the
Committee’s determination and certification in accordance with Section 7(c)(i),
the Company shall notify each Participant of the determination of the Committee.

 

(v)            Payment in Settlement of Performance Awards.  As soon as
practicable following the Committee’s determination and certification in
accordance with Section 7(c)(i), payment shall be made to each eligible
Participant (or such Participant’s legal representative or other person who
acquired the right to receive such payment by reason of the Participant’s death)
of the final value of the Participant’s Performance Award.  Payment of such
amount shall be made in cash, shares of Stock, or a combination thereof as
determined by the Committee.  Unless otherwise provided in the Award Agreement,
payment shall be made in a lump sum.  An Award Agreement may provide for
deferred payment in a lump sum or in installments.

 

(vi)          Provisions Applicable to Payment in Shares.  If payment is to be
made in shares of Stock, the number of such shares shall be determined by
dividing the final value of the Performance Award by the value of a share of
Stock determined by the method specified in the Award Agreement.  Such methods
may include, without limitation, the closing market price on a specified date
(such as the settlement date) or an average of market prices over a series of
trading days.  Shares of Stock issued in payment of any Performance Award may be
fully vested and freely transferable shares or may be shares of Stock subject to
further vesting conditions as provided in Section 8.  Any shares subject to
further vesting conditions shall be evidenced by an appropriate agreement
setting forth the terms of a Performance Award and shall be subject to the
provisions of Section 8.

 

(d)           Effect of Termination of Service.  The effect of a Participant’s
termination of service to the Company on the Participant’s Performance Award
shall be as determined by the Committee, in its discretion, and set forth in the
Award Agreement or other written agreement between the Company and the
Participant.

 

(e)           Nontransferability of Performance Awards.  Prior to settlement in
accordance with the provisions of the Plan, no Performance Award may be subject
in any manner to anticipation, alienation, sale, exchange, transfer, assignment,
pledge, encumbrance, or garnishment by creditors of the Participant or the
Participant’s beneficiary, except by will or by the laws of descent and
distribution.  All rights with respect to a Performance Award granted to a
Participant hereunder shall be exercisable during his or her lifetime only by
such Participant or the Participant’s guardian or legal representative.

 

(f)            Maximum Performance Award.  Subject to adjustment as provided in
Section 5, no Participant may be granted a Performance Award in the form of
Performance-Based Restricted Stock or Performance Shares which could result in
such Participant receiving more than 1,600,000 shares (reflecting Stock splits
on October 26, 1999, October 24, 2000 and May 23, 2005) of Stock free of the
restrictions imposed by this Section 7 with respect to any Performance Period or
a Performance Award in the form of Performance Units which could result in such
Participant receiving more than $10,000,000 with respect to any Performance
Period.  No Participant may be granted more than one (1) Performance Award for
the same Performance Period.

 

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8.             Restricted Stock and Restricted Stock Unit Awards.

 

(a)           Restricted Stock.  The Committee may from time to time grant
shares of Stock under this Section 8(a) (“Restricted Stock”).  Restricted Stock
Awards shall be evidenced by written agreements, in such form as the Committee
shall from time to time establish, specifying the number of shares of Stock
covered thereby and the terms, conditions and restrictions of the Award, and
which agreements may incorporate all or any of the terms of the Plan by
reference.  The number of shares of Restricted Stock which a Participant may
receive under the Plan shall be determined by the Committee in its sole
discretion.  Shares of Restricted Stock shall be evidenced in such manner as the
Committee may deem appropriate, including by book-entry registration or issuance
of one or more stock certificates.  Any certificate issued in respect of shares
of Restricted Stock shall be registered in the name of the Participant and shall
bear an appropriate legend referring to the terms, conditions, and restrictions
applicable to such Award.  The Committee may require that such certificates be
held in the custody of the Company or other escrow agent until the restrictions
thereon lapse.  The Committee shall not require a Participant to make any
monetary payment (other than applicable tax withholding) as a condition of
receiving Restricted Stock.

 

(b)           Restricted Stock Units.  The Committee may from time to time grant
“Restricted Stock Units” under this Section 8(b) Restricted Stock Units shall
represent a contractual right to receive one share of Stock (or cash, as
determined in the sole discretion of the Committee) in respect of each
Restricted Stock Unit.  Restricted Stock Units shall be subject to vesting based
on service to the Company or a Participating Company or other criteria, and to
such other restrictions or conditions that may delay the delivery of the shares
of Stock (or their cash equivalent) subject to a Restricted Stock Unit Award
after the vesting of such Award.  Each Restricted Stock Unit Award shall be
evidenced by a written Award Agreement, in such form as the Committee shall from
time to time establish, specifying the number of shares of Stock covered thereby
and the terms, conditions and restrictions of the Award, which agreements may
incorporate all or any of the terms of the Plan by reference.

 

(i)            Consideration.  At the time of grant of a Restricted Stock Unit
Award, the Committee will determine the consideration, if any, to be paid by the
Participant upon delivery of each share of Stock subject to the Award. The
consideration to be paid (if any) by the Participant for each share of Stock
acquired pursuant to the Award Agreement shall be paid either: (i) in cash upon
delivery of each share of Stock subject to the Award; or (ii) in any other form
of legal consideration that may be acceptable to the Committee, in its
discretion, subject to any restrictions under applicable law regarding payment
in respect of the “par value” of the Stock.

 

(ii)           Settlement.  A Restricted Stock Unit Award may be settled by the
delivery of shares of Stock, their cash equivalent, any combination thereof or
in any other form of consideration, as determined by the Committee.

 

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(iii)         Termination of Participant’s Service.  Except as otherwise
provided in the applicable Award Agreement or other written agreement between
the Company and the Participant, the portion of the Restricted Stock Unit Award
that has not vested will be forfeited upon the Participant’s termination of
service to the Company.

 

9.             Voting Rights.  A Participant issued shares of Stock pursuant to
an Award of Performance-Based Restricted Stock or Restricted Stock shall be
entitled to vote such shares.  A Participant awarded Performance Shares or
Restricted Stock Units shall not be entitled to vote any shares of Stock
represented by such Performance Shares or Restricted Stock Units prior to the
date of issuance of shares of Stock upon settlement of such Award.

 

10.          Dividends and Other Distributions.  Except as provided in this
Section 10 or in Section 5, no Participant shall be entitled to dividends or
other distributions (collectively, “Dividends”) with respect to shares of Stock
subject to an Award under the Plan for which the record date is prior to the
later of the date such shares are issued to the Participant or the date on which
such shares become nonforfeitable under the terms of the agreement evidencing
such Award.

 

(a)            Performance-Based Restricted Stock and Restricted Stock.  With
respect to shares of Stock issued pursuant to a Performance-Based Restricted
Stock Award or Restricted Stock Award, the Committee may, in its sole
discretion, provide either for the current payment of Dividends or the
accumulation and payment of Dividends to the extent that such shares become
nonforfeitable.

 

(b)            Performance Shares and Restricted Stock Units.  With respect to
Performance Shares and Restricted Stock Units, the Committee may, in its sole
discretion, provide that dividend equivalents shall not be paid or provide
either for the current payment of dividend equivalents or for the accumulation
and payment of dividend equivalents to the extent that the Performance Shares or
Restricted Stock Units become nonforfeitable.

 

(c)            Performance Units.  Dividend equivalents shall not be paid with
respect to Performance Units.

 

11.          Change of Control.

 

(a)            Awards Granted Prior to January 24, 2008.  The following
provisions shall control for Awards granted prior to January 24, 2008:

 

(i)            Except as otherwise provided in a Participant’s Award Agreement,
a “Change of Control” shall be deemed to have occurred in the event any of the
following occurs with respect to the Company:

 

(1)           the direct or indirect sale or exchange by the stockholders of the
Company of all or substantially all of the stock of the Company where the
stockholders of the Company before such sale or exchange do not retain, directly
or indirectly, at least a majority of the beneficial interest in the voting
stock of the Company after such sale or exchange;

 

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(2)           a merger or consolidation in which the Company is not the
surviving corporation;

 

(3)           a merger or consolidation in which the Company is the surviving
corporation where the stockholders of the Company before such merger or
consolidation do not retain, directly or indirectly, at least a majority of the
beneficial interest in the voting stock of the Company after such merger or
consolidation;

 

(4)           the sale, exchange, or transfer of all or substantially all of the
assets of the Company (other than a sale, exchange, or transfer to one (1) or
more subsidiary corporations of the Company); or

 

(5)           A liquidation or dissolution of the Company.

 

(ii)           Effect on Performance Awards.  Except as otherwise expressly
provided in a Participant’s Award Agreement or in another written agreement
between the Company and the Participant, each Participant granted a Performance
Award for a Performance Period that will not be completed as of the effective
date of a Change of Control shall be deemed to have earned pursuant to
Section 7(c), and shall receive immediately prior to the Change of Control, free
of the performance-based restrictions imposed by Section 7, the number of shares
under his or her Award equal to the product of (i) the target amount that could
have been earned, based on 100% (but not more than 100%) achievement of
performance goals, under the Performance Award in accordance with the terms of
the Award Agreement and (ii) a fraction, the numerator of which is the number of
full and partial months that have elapsed since the beginning of such
Performance Period to the effective date of the Change of Control, and the
denominator of which is the total number of months in such Performance Period.

 

(iii)         Effect on Restricted Stock and Restricted Stock Units. 
Notwithstanding any other provision of the Plan to the contrary, all forfeiture
conditions and restrictions imposed under outstanding Award Agreements
evidencing Restricted Stock and Restricted Stock Units shall automatically lapse
immediately prior to a Change of Control.

 

(b)           Awards Granted On or After January 24, 2008.  The following
provisions shall control for Awards granted on or after January 24, 2008:

 

(i)            Except as otherwise provided in a Participant’s Award Agreement,
“Change of Control” shall mean a change of control of the Company of a nature
that would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A promulgated under the Exchange Act, whether or not the Company
is then subject to such reporting requirement; provided, however, that anything
in this Plan to the contrary notwithstanding, a Change of Control shall be
deemed to have occurred if:

 

(1)           any individual, partnership, firm, corporation, association,
trust, unincorporated organization or other entity or person, or any syndicate
or group deemed to be a person under Section 14(d)(2) of the Exchange Act, is or
becomes the “beneficial owner” (as defined in Rule 13d-3 of the General
Rules and Regulations under the Exchange Act), directly or indirectly, of
securities of the Company representing 30% or more of the combined voting power
of the Company’s then outstanding securities entitled to vote in the election of
directors of the Company;

 

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(2)           during any period of two (2) consecutive years, individuals who at
the beginning of such period constituted the Board and any new directors, whose
election by the Board or nomination for election by the Company’s stockholders
was approved by a vote of at least three-fourths (3/4ths) of the directors then
still in office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved (the
“Incumbent Directors”), cease for any reason to constitute a majority thereof;

 

(3)           there occurs a reorganization, merger, consolidation or other
corporate transaction involving the Company (a “Transaction”), in each case with
respect to which the stockholders of the Company immediately prior to such
Transaction do not, immediately after the Transaction, own securities
representing more than 50% of the combined voting power of the Company, a parent
of the Company or other corporation resulting from such Transaction (counting,
for this purpose, only those securities held by the Company’s stockholders
immediately after the Transaction that were received in exchange for, or
represent their continuing ownership of, securities of the Company held by them
immediately prior to the Transaction);

 

(4)           all or substantially all of the assets of the Company are sold,
liquidated or distributed; or

 

(5)           there is a “Change of Control” or a “change in the effective
control” of the Company within the meaning of Section 280G of the Code and the
regulations promulgated thereunder.

 

(ii)           The Committee or the Board may, in its discretion, provide in any
Award Agreement, severance plan or other individual agreement, that, in the
event of a Change of Control of the Company, the Award held by a Participant
shall become vested, exercisable and/or payable to such extent as specified in
such document.

 

(iii)         In the event of a Change of Control, the surviving, continuing,
successor, or purchasing entity or parent thereof, as the case may be (the
“Acquiror”), may, without the consent of any Participant, either assume the
Company’s rights and obligations under outstanding Awards or substitute for
outstanding Awards substantially equivalent equity awards for the Acquiror’s
stock.  In the event the Acquiror elects not to assume or substitute for
outstanding Awards in connection with a Change of Control, any unexercised
and/or unvested portions of such outstanding Awards shall become immediately
exercisable and vested in full as of immediately prior to the effective date of
the Change of Control.  The exercise and/or vesting of any Award that was
permissible solely by reason of this paragraph 11.2 shall be conditioned upon
the consummation of the Change in Control.  Any Awards which are not assumed or
replaced by the Acquiror in connection with the Change of Control nor exercised
as of the time of consummation of the Change of Control shall terminate and
cease to be outstanding effective as of the time of consummation of the Change
of Control.

 

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12.          Tax Withholding.  The Company shall have the right to deduct from
the payment of any Award hereunder any federal, state, local or foreign taxes
required by law to be withheld with respect to such payment.  Alternatively, in
its sole discretion, the Company shall have the right to require the
Participant, through payroll withholding or otherwise, to make adequate
provision for any such tax withholding obligations of the Company arising in
connection with such Award.  The Company shall have no obligation to deliver
cash and/or shares of Stock in payment of an Award unless the Company’s tax
withholding obligations have been satisfied.

 

13.          Provision of Information.  Each Participant shall be given access
to information concerning the Company equivalent to that information generally
made available to the Company’s common stockholders.

 

14.          Nontransferability of Awards.  Prior to the payment of, and lapse
of all restrictions with respect to, an Award under the Plan, no Award or any
rights or interests therein may be assigned or transferred in any manner except
by will or by the laws of descent and distribution.

 

15.          Termination or Amendment of Plan and Awards.  The Committee or the
Board may terminate or amend the Plan or any Award under the Plan at any time;
provided, however, that no such termination or amendment may adversely affect
any outstanding Award without the consent of the Participant, unless such
termination or amendment is necessary to comply with any applicable law or
government regulation.  An Award shall be considered as outstanding as of the
effective date of the grant of such Award as determined by the Committee. 
Notwithstanding the foregoing, the approval of the Company’s stockholders shall
be sought for any amendment to the Plan or an Award for which the Committee
deems stockholder approval necessary in order to comply with Rule 16b-3.

 

16.          Continuation of Initial Plan as to Outstanding Awards. 
Notwithstanding any other provision of the Plan to the contrary, the terms of
the Initial Plan shall remain in effect and apply to Awards granted pursuant to
the Initial Plan.

 

17.          Section 409A. To the extent that the Committee determines that any
Award granted under the Plan is, or may reasonably be, subject to Section 409A
of the Code (together, with any state law of similar effect, “Section 409A”),
the Award Agreement evidencing such Award shall incorporate the terms and
conditions necessary to avoid the consequences described in
Section 409A(a)(1) of the Code (or any similar provision).  To the extent
applicable and permitted by law, the Plan and Award Agreements shall be
interpreted in accordance with Section 409A and Department of Treasury
regulations and other interpretive guidance issued thereunder, including without
limitation any such regulations or other guidance that may be issued or amended
after the date of grant of any Award hereunder.

 

Notwithstanding any provision of the Plan to the contrary, in the event that the
Committee determines that any Award is, or may reasonably be, subject to
Section 409A and related Department of Treasury guidance (including such
Department of Treasury guidance issued from time to time), the Committee may
adopt such amendments to the Plan and the applicable Award Agreement or adopt
other policies and procedures (including amendments, policies and procedures
with retroactive effect), or take any other actions, that the Committee

 

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determines are necessary or appropriate to (A) exempt the Award from
Section 409A and/or preserve the intended tax treatment of the benefits provided
with respect to the Award, or (B) comply with the requirements of Section 409A
and related Department of Treasury guidance.

 

In addition, and except as otherwise set forth in the applicable Award
Agreement, if the Company determines that any Award granted under this Plan
constitutes, or may reasonably constitute, “deferred compensation” under
Section 409A and the Participant is a “specified employee” of the Company at the
relevant date, as such term is defined in Section 409A(a)(2)(B)(i), then any
payment or benefit resulting from such Award will be delayed until the earliest
date following the Participant’s “separation from service” with the
Participating Company Group within the meaning of Section 409A on which the
Company can provide such payment or benefit to the Participant without the
Participant’s incurrence of any additional tax or interest pursuant to
Section 409A.  In addition, this Plan and the benefits to be provided hereunder
are intended to comply in all respects with the applicable provisions of
Section 409A.

 

Notwithstanding anything to the contrary contained herein, neither the Company
nor any of its Affiliates shall be responsible for, or required to reimburse or
otherwise make any Participant whole for, any tax or penalty imposed on, or
losses incurred by, any Participant that arises in connection with the potential
or actual application of Section 409A to any Award granted hereunder.

 

IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies that the
foregoing Adobe Systems Incorporated Amended 1994 Performance and Restricted
Stock Plan, as amended, was duly adopted by the Executive Compensation Committee
of the Board of Directors of the Company on January 24, 2008.

 

 

 

/s/ Karen Cottle

 

 

 

Karen Cottle, Secretary

 

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