Exhibit 10.1


 


March 21, 2006


 


Re:  Employment Transition Agreement


 


Dear Murray:


 


You have decided to resign from your employment with
Adobe (also referred to as “the Company” below).  In order to assist both
you and Adobe in our respective transition planning, we have agreed that our
employment relationship will continue, and then terminate, on the following
terms:


 


•                  you hereby resign voluntarily from your
employment with the Company effective as of December 1, 2006;


 


•                  you will continue to be a full-time employee
of the Company through June 16, 2006; from June 17-December 1,
2006, you will be a part-time employee working up to 20
hours per week, and paid on an as-worked non-exempt basis;


 


•                  you will continue to serve as the Company’s
Chief Financial Officer until June 16, 2006 or such earlier time as the
Company requests that you resign from that position; upon such request, you
will promptly resign from any officer positions that you hold with the Company
or any of its affiliated entities by delivering a written notice of such
resignation(s) and other reasonably requested documentation to the Company
in a form satisfactory to the Company; once you resign from your position as
Chief Financial Officer, your duties for the remainder of your employment will
consist of (a) completing an orderly transition of your duties to the
Company’s new CFO, (b) reviewing the Company’s Q2 2006 Quarterly Report on
Form 10-Q, (c) providing ongoing support and consultation for the new
CFO, (d) performing special projects as requested by the Company’s Chief
Executive Officer, (e) fulfilling your duties as needed for affiliated
entities, and (f) any other reasonable duties that may be assigned to you
from time-to-time by the Company;


 


•                  during the remainder of your full-time employment,
you will continue to receive the base salary and employee fringe benefits that
you currently receive from the Company;


 


•                  during your part-time employment your pay
rate will be $223.55 per hour worked.  As
you will be regularly scheduled to work less than 24 hours per week, you will
be eligible for COBRA insurance coverage and will receive other employee fringe
benefits in accordance with the Company’s applicable plans (including
option vesting, which will continue), except with respect to the
Annual Incentive Plan;


 


•                  if you begin employment for another company
at any time prior to December 2, 2006, your employment with Adobe will
terminate on the day immediately preceding the start of such alternate
employment (or any earlier date that you resign), and all Adobe benefits and
bonus programs will terminate in accordance with the terms of the respective
plans and programs, except with respect to the Annual Incentive Plan;


 


•                  if you remain an employee in good standing of
the Company through at least June 16, 2006, you will receive a
pro-rated portion of your Annual Incentive Plan bonus for FY 2006, which award
will be based on your AIP target percentage (65%) multiplied by your actual
base salary earnings during FY 2006 and actual corporate results.   Any AIP bonus earned will be paid to you in
accordance with the payment terms of the AIP, which is expected to be on or
about January 2007; and


 


•                  nothing in this agreement alters your “at
will” employment status with the Company.


 

















 


Please sign and date this agreement in the spaces
below to confirm your acceptance of its terms.


 


Sincerely,


 


Adobe Systems Incorporated


 


	
  By:

  	
  /s/ Peg Wynn

  	
   

  	
   

  
	
  Its:

  	
  Senior Vice President, Human Resources

  	
   

  
	
   

  	
   

  
	
  I agree to and accept the terms of this Employment
  Transition Agreement.

  
	
   

  	
   

  
	
  /s/ Murray Demo

  	
   

  	
  Dated: March 22, 2006

  	
   

  
	
  Murray Demo