Exhibit 10.5

 

ADOBE EXECUTIVE OFFICER ANNUAL INCENTIVE PLAN

(FY 2007)

OBJECTIVES:

·                  Drive growth and accountability

·                  Drive execution of operating plan and strategic objectives

·                  Motivate and inspire employees to contribute at peak
performance

ELIGIBILITY: Executive officers of the Company who are employed (full time or
part time) during the full eligibility period (fiscal year) are eligible to
participate in the Plan. If an executive officer is hired after the beginning of
the Plan eligibility period, the executive officer’s bonus will be prorated,
assuming the executive is employed by the Company in an eligible position at the
end of the eligibility period.

INCENTIVE BONUS TARGET: Each participant’s incentive bonus target is calculated
as a percentage of annual base salary.

PAYMENT SCHEDULE: Incentive bonuses are paid on annual basis approximately 45-60
days from fiscal year-end.

INITIAL THRESHOLD ACHIEVEMENT: As a minimum threshold for participants to earn
an incentive bonus under the Plan, the Company must achieve at least 90% of its
revenue target for the fiscal year.

INCENTIVE BONUS COMPONENTS: Once the initial threshold is met, a Funding Level
for a particular year is determined based on the corporate achievement of two
metrics - revenue growth (including shippable backlog) and non-GAPP operating
profit. The Funding Level is a percentage determined based on the combined
results of the metric targets. The Funding Level percentage may range from a
minimum of 36% (if corporate achievement for each metric meets a 95% threshold)
to 200% (if corporate achievement for each metric reaches at least 107%).

If corporate achievement is below 95% of target, no incentive bonus is paid.

If corporate achievement is between 95% and 100% of target, the incentive bonus
is calculated as follows:

Target Bonus x Funding Level % x Individual Results %

Determination of Individual Results - Based on the achievement of goals tied to
the corporate operating plan and strategic objectives. 100% of the incentive
bonus is weighted on Individual Results and tied to corporate achievement.

If corporate achievement is above 100% of target, the incentive bonus is
calculated as follows:

Target Bonus x Unit Multiplier x Individual Results

Step 1: Determine Aggregate Funding - The aggregate Funding Level for the Plan
is calculated by multiplying the Funding Level percentage achieved by the sum of
each participant’s incentive bonus target.

Step 2: Determine Allocation of Funds - These funds are then allocated to the
Company’s business and functional units based on relative contribution to the
Company’s success.

Step 3: Determine Unit Multiplier - For each Company business and functional
unit, allocated funds are divided by the sum of individual participant target
bonuses within each particular business and functional unit.

Step 4: Calculate incentive bonus

MAXIMUM AWARD: 

·                                          Maximum incentive bonus per
participant is 300% of target.

·                                          Incentive bonus per participant
cannot exceed $5 million per year.

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