EXHIBIT 10.11


 


ADOBE
SYSTEMS INCORPORATED


NONSTATUTORY STOCK OPTION AGREEMENT


(STANDARD)


 


                THIS NONSTATUTORY
STOCK OPTION AGREEMENT (the “Option Agreement”) is made and
entered into as of the Date of Option Grant by and between Adobe Systems
Incorporated and


 


                                                                                                (the
“Participant”).  The Company has granted to the Participant
pursuant to the Adobe Systems Incorporated 2003 Equity Incentive Plan (the “Plan”)
an option to purchase certain shares of Stock (the “Option”), upon the terms and conditions set
forth in this Option Agreement, but subject in any event to the Superseding
Agreement, if any, described below.


 


1.             DEFINITIONS
AND CONSTRUCTION.


1.1           Definitions.  Whenever used herein, the following terms shall have their
respective meanings set forth below:


(a)           “Date of Option Grant” means


(b)           “Number of
Option Shares” means                                  shares of Stock, as adjusted from time to
time pursuant to Section 10.


(c)           “Exercise
Price” means $                                 per
share of Stock, as adjusted from time to time pursuant to Section 10.


(d)           “Initial
Vesting Date” means the date occurring one (1) year after
the Date of Option Grant.


(e)           “Vested
Shares” means, on any relevant date, that portion
(disregarding any fractional share) of the Number of Option Shares determined
by multiplying the Number of Option Shares by the “Vested
Percentage” determined as of such date as follows:


 


	
   

  	
   

  	
  Vested Percentage

  
	
   

  	
   

  	
   

  
	
  Prior
  to Initial Vesting Date

  	
   

  	
  0

  
	
   

  	
   

  	
   

  
	
  On
  Initial Vesting Date, provided the Participant’s Service has not terminated
  prior to such date

  	
   

  	
  25%

  
	
   

  	
   

  	
   

  
	
  Plus:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  For
  each of the next 12 full months of the Participant’s continuous Service from
  the Initial Vesting Date

  	
   

  	
  2.08%

  
	
   

  	
   

  	
   

  
	
  Plus:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  For
  each of the next 12 full months of the Participant’s continuous Service from
  the Initial Vesting Date until the Vested Percentage equals 100%

  	
   

  	
  4.17%

  



 


(f)            “Affiliate”
means (i) an entity, other than a Parent Corporation, that directly, or
indirectly through one or more intermediary entities, controls the Company or
(ii) an entity, other than a Subsidiary Corporation, that is controlled by
the Company directly, or indirectly through one or more intermediary
entities.  For this purpose, the term
“control” (including the term “controlled by”) means the possession, direct or
indirect, of the 


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power to direct or cause
the direction of the management and policies of the relevant entity, whether
through the ownership of voting securities, by contract or otherwise; or shall
have such other meaning assigned such term for the purposes of registration in
the United States (“U.S.”) on Form S-8 under the Securities Act.


(g)           “Board”
means the Board of Directors of the Company.


(h)           “Code” means the U.S.
Internal Revenue Code of 1986, as amended, and any applicable regulations promulgated
thereunder.


(i)            “Committee”
means the Executive Compensation Committee or other committee of the Board duly
appointed to administer the Plan and having such powers as shall be specified
by the Board.  If no committee of the
Board has been appointed to administer the Plan, the Board shall exercise all
of the powers of the Committee granted herein, and, in any event, the Board may
in its discretion exercise any or all of such powers.


(j)            “Company”
means Adobe Systems Incorporated, a Delaware corporation, or any successor
corporation thereto.


(k)           “Consultant”
means a person engaged to provide consulting or advisory services (other than
as an Employee or a member of the Board) to a Participating Company, provided
that the identity of such person, the nature of such services or the entity to
which such services are provided would not preclude the Company from offering
or selling securities to such person pursuant to the Plan in reliance on
registration on a Form S-8 Registration Statement under the Securities Act.


(l)            “Disability”
means the permanent and total disability of the Participant within the meaning
of Section 22(e)(3) of the Code.


(m)          “Employee”
means any person treated as an employee (including an Officer or a member of
the Board who is also treated as an employee) in the records of a Participating
Company; provided, however, that neither service as a member of the Board nor
payment of a director’s fee shall be sufficient to constitute employment.


(n)           “Exchange Act”
means the U.S. Securities Exchange Act of 1934, as amended.


(o)           “Fair Market Value”
means, as of any date, the value of a share of Stock or other property as
determined by the Committee, in its discretion, or by the Company, in its
discretion, if such determination is expressly allocated to the Company herein,
subject to the following:


(i)            If, on such date,
the Stock is listed on a national or regional securities exchange or market
system, the Fair Market Value of a share of Stock shall be the closing price of
a share of Stock (or the mean of the closing bid and asked prices of a share of
Stock if the Stock is so quoted instead) as quoted on the Nasdaq National
Market, the Nasdaq SmallCap Market or such other national or regional
securities exchange or market system constituting the primary market for the
Stock, as reported on www.Nasdaq.com
or such other source as the Company deems reliable.  If the relevant date does not fall on a day on which the Stock
has traded on such securities exchange or market system, the date on which the
Fair Market Value shall be established shall be the last day on which the Stock
was so traded prior to the relevant date, or such other appropriate day as
shall be determined by the Committee, in its discretion.


If,
on such date, the Stock is not listed on a national or regional securities
exchange or market system, the Fair Market Value of a share of Stock shall be
as determined by the Committee in good faith without regard to any restriction
other than a restriction which, by its terms, will never lapse.


(p)           “Officer” means any person designated by the Board as an
officer of the Company.


(q)           “Option
Expiration Date” means the date seven (7) years after the
Date of Option Grant.


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(r)            “Parent Corporation”
means any present or future “parent corporation” of the Company, as defined in
Section 424(e) of the Code.


(s)           “Participating Company”
means the Company or any Parent Corporation, Subsidiary Corporation or
Affiliate.


(t)            “Participating Company Group”
means, at any point in time, all corporations collectively which are then
Participating Companies.


(u)           “Securities Act”
means the U.S. Securities Act of 1933, as amended.


(v)           “Service”
means the Participant’s employment or service with the Participating Company
Group as an Employee or a Consultant, whichever such capacity the Participant
held on the Date of Option Grant or, if later, the date on which the
Participant commenced Service.  The
Participant’s Service shall be deemed to have terminated if the Participant ceases
to render Service to the Participating Company Group in such initial
capacity.  However, the Participant’s
Service shall not be deemed to have terminated merely because of a change in
the Participating Company for which the Participant renders Service in such
initial capacity, provided that there is no interruption or termination of the
Participant’s Service.  Furthermore, the
Participant’s Service with the Participating Company Group shall not be deemed
to have terminated if the Participant takes any bona fide leave of absence
approved by the Company of ninety (90) days or less.  In the event of a leave in excess of ninety (90) days, the
Participant’s Service shall be deemed to terminate on the ninety-first (91st)
day of the leave unless the Participant’s right to return to Service with the
Participating Company Group is guaranteed by statute or contract.  Notwithstanding the foregoing, unless
otherwise designated by the Company or required by law, a leave of absence
shall not be treated as Service for purposes of determining vesting under the
Participant’s Option Agreement.  The
Participant’s Service shall be deemed to have terminated either upon an actual
termination of Service or upon the corporation for which the Participant
performs Service ceasing to be a Participating Company.  Subject to the foregoing, the Company, in
its discretion, shall determine whether the Participant’s Service has
terminated and the effective date of such termination.


(w)          “Stock”
means the common stock of the Company, as adjusted from time to time in
accordance with Section 10.


(x)            “Subsidiary Corporation”
means any present or future “subsidiary corporation” of the Company, as defined
in Section 424(f) of the Code.


(y)           “Superseding Agreement” means
the Adobe Systems Incorporated Executive Severance Plan in the Event of a
Change in Control or any successor plan or agreement in which the Participant
is a participant or to which the Participant is a party (in each such instance,
the “Severance Plan”), or any agreement to which the Participant is a party
which, by its existence alone, prevents the Participant from being eligible to
participate in the Severance Plan.  The
terms and conditions of any such Superseding Agreement shall, notwithstanding
any provision of this Option Agreement to the contrary, supersede any
inconsistent term or condition set forth in this Option Agreement to the extent
intended by such Superseding Agreement.


1.2           Construction.  Captions and titles contained herein are for convenience only and
shall not affect the meaning or interpretation of any provision of this Option
Agreement.  Except when otherwise
indicated by the context, the singular shall include the plural and the plural
shall include the singular.  Use of the
term “or” is not intended to be exclusive, unless the context clearly requires
otherwise.


2.             TAX STATUS
OF OPTION.


                                This Option is intended to be a
nonstatutory stock option and shall not be treated as an incentive stock option
within the meaning of Section 422(b) of the Code.


 


3.             ADMINISTRATION.


                                All
questions of interpretation concerning this Option Agreement shall be
determined by the Committee.  All
determinations by the Committee shall be final and binding upon all persons
having an interest in 


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the Option. 
Any Officer 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.


 


4.             EXERCISE OF THE OPTION.


4.1           Right to
Exercise.  Except as otherwise provided herein, the
Option shall be exercisable on and after the Initial Vesting Date and prior to
the termination of the Option (as provided in Section 7) in an amount not
to exceed the number of Vested Shares less the number of shares previously
acquired upon exercise of the Option. 
In no event shall the Option be exercisable for more shares than the
Number of Option Shares.


4.2           Method of Exercise.  Exercise of the Option shall be by means of electronic notice in
a form authorized by the Company, which shall be digitally signed or
authenticated by the Participant in such manner as required by the notice and transmitted
to the Equity Compensation Department of the Company or other authorized
representative of the Company (including a third-party administrator designated
by the Company).  In the event that the
Participant is not authorized or is unable to provide electronic notice of
exercise, the Option shall be exercised by written notice to the Company, which
shall be signed by the Participant and delivered in person, by certified or
registered mail, return receipt requested, by confirmed facsimile transmission,
or by such other means as the Company may permit, to the Equity Compensation
Department of the Company, or other authorized representative of the Company
(including a third-party administrator designated by the Company).  Each such notice, whether electronic or
written, must state the Participant’s election to exercise the Option, the
number of whole shares of Stock for which the Option is being exercised and
such other representations and agreements as to the Participant’s investment
intent with respect to such shares as may be required pursuant to the
provisions of this Option Agreement. 
Further, each such notice must be received by the Company prior to the
termination of the Option as set forth in Section 7 and must be
accompanied by full payment of the aggregate Exercise Price for the number of
shares of Stock being purchased.  The
Option shall be deemed to be exercised upon receipt by the Company of such
electronic or written notice and the aggregate Exercise Price.


4.3           Payment of Exercise Price.


(a)           Forms of
Consideration Authorized. 
Except as otherwise provided below, payment of the aggregate Exercise
Price for the number of shares of Stock for which the Option is being exercised
shall be made (i) in cash, by check or by cash equivalent or (ii) by means of a
Cashless Exercise, as defined in Section 4.3(b).


(b)           Cashless Exercise.  A “Cashless
Exercise” means the delivery of a properly executed
notice of exercise together with irrevocable instructions to a broker in a form
acceptable to the Company providing for the assignment to the Company of the
proceeds of a sale or loan with respect to some or all of the shares being
acquired upon the exercise of the Option pursuant to a program or procedure
approved by the Company (including, without limitation, through an exercise
complying with the provisions of Regulation T as promulgated from time to
time by the Board of Governors of the Federal Reserve System).  The Company reserves, at any and all times,
the right, in the Company’s sole and absolute discretion, to establish, decline
to approve or terminate any such program or procedure, including with respect
to the Participant notwithstanding that such program or procedures may be
available to others.


4.4           Tax Withholding.  Regardless of any action taken by the Participating Company Group
with respect to any or all income tax, social insurance, payroll tax, payment
on account or other tax-related withholding (“Tax-Related Items”), the
Participant acknowledges that the ultimate liability for all Tax-Related Items legally
due by the Participant is and remains the Participant’s responsibility and that
the Participating Company Group (i) makes no representations or
undertakings regarding the treatment of any Tax-Related Items in connection
with any aspect of the Option, including the grant, vesting or exercise of the
Option, the subsequent sale of shares acquired pursuant to such exercise, or
the receipt of any dividends and (ii) does not commit to structure the terms of
the grant or any other aspect of the Option to reduce or eliminate the
Participant’s liability for Tax-Related Items. 
At the time of exercise of the Option, the Participant shall pay or make
adequate arrangements satisfactory to the Participating Company Group to
satisfy all withholding obligations of the Participating Company Group.  In this regard, at the time the Option is
exercised, in whole or in part, or at any time thereafter as requested by the
Company, the Participant hereby authorizes withholding of all applicable
Tax-Related Items from payroll and any 


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other amounts payable to
the Participant, and otherwise agrees to make adequate provision for
withholding of all applicable Tax Related Items by the Participating Company
Group, if any, which arise in connection with the Option.  Alternatively, or in addition, if
permissible under applicable law, the Participating Company Group may (i) sell
or arrange for the sale of shares acquired by the Participant to meet the
withholding obligation of Tax-Related Items and/or (ii) withhold in shares,
provided that only the amount of shares necessary to satisfy the minimum
withholding amount are withheld. 
Finally, the Participant shall pay to the Participating Company Group
any amount of the Tax-Related Items that the Participating Company Group may be
required to withhold as a result of the Participant’s participation in the Plan
that cannot be satisfied by the means previously described.  The Company shall have no obligation to
process the exercise of the Option or to deliver shares of Stock until the
obligations in connection with the Tax-Related Items as described in this
section have been satisfied by the Participant.


4.5           Beneficial Ownership of Shares; Certificate
Registration.  The Participant hereby authorizes the
Company, in its sole discretion, to deposit for the benefit of the Participant
with any broker with which the Participant has an account relationship of which
the Company has notice any or all shares acquired by the Participant pursuant
to the exercise of the Option.  Except
as provided by the preceding sentence, a certificate for the shares as to which
the Option is exercised shall be registered in the name of the Participant, or,
if applicable, in the names of the heirs of the Participant.


4.6           Restrictions on Grant of the Option and Issuance of
Shares.  The grant of the Option and the issuance of
shares of Stock upon exercise of the Option shall be subject to compliance with
all applicable requirements of federal, state or foreign law with respect to
such securities.  The Option may not be
exercised if the issuance of shares of Stock upon exercise would constitute a
violation of any applicable federal, state or foreign securities laws or other
law or regulations or the requirements of any stock exchange or market system
upon which the Stock may then be listed. 
In addition, the Option may not be exercised unless (i) a
registration statement under the Securities Act shall at the time of exercise
of the Option be in effect with respect to the shares issuable upon exercise of
the Option or (ii) in the opinion of legal counsel to the Company, the
shares issuable upon exercise of the Option may be issued in accordance with
the terms of an applicable exemption from the registration requirements of the
Securities Act.  THE PARTICIPANT IS
CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS
ARE SATISFIED.  ACCORDINGLY, THE
PARTICIPANT MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH THE
OPTION IS VESTED.  The inability of the
Company to obtain from any regulatory body having jurisdiction the authority,
if any, deemed by the Company’s legal counsel to be necessary to the lawful
issuance and sale of any shares subject to the Option shall relieve the Company
of any liability in respect of the failure to issue or sell such shares as to
which such requisite authority shall not have been obtained.  As a condition to the exercise of the
Option, the Company may require the Participant to satisfy any qualifications
that may be necessary or appropriate, to evidence compliance with any
applicable law or regulation and to make any representation or warranty with
respect thereto as may be requested by the Company.


4.7           Fractional Shares.  The Company shall not be required to issue fractional shares upon
the exercise of the Option.


5.             NONTRANSFERABILITY OF THE OPTION.


                                The Option may
be exercised during the lifetime of the Participant only by the Participant or
the Participant’s guardian or legal representative and may not be assigned or
transferred in any manner except by will or by the laws of descent and
distribution.  Following the death of
the Participant, the Option, to the extent provided in Section 8, may be
exercised by the Participant’s legal representative or by any person empowered
to do so under the deceased Participant’s will or under the then applicable
laws of descent and distribution.


 


6.             NATURE OF OPTION.


                                In accepting the
Option, the Participant acknowledges that:


 


6.1           the Plan is established voluntarily
by the Company; it is discretionary in nature and it may be modified, amended,
suspended or terminated by the Company at any time, unless otherwise provided
in the Plan and this Option Agreement;


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6.2           the grant of the Option is voluntary
and occasional and does not create any contractual or other right to receive
future grants of Options, or benefits in lieu of Options, even if Options have
been granted repeatedly in the past;


6.3           all decisions with respect to future Option
grants, if any, will be at the sole discretion of the Company;


6.4           the Participant’s participation in
the Plan shall not create a right to further employment with the Participating
Company Group and shall not interfere with any ability of the Participating
Company Group to terminate the Participant’s employment relationship at any
time with or without cause;


6.5           the Participant is voluntarily
participating in the Plan;


6.6           the Option is not part of normal or
expected compensation or salary for any purpose, including, but not limited to,
calculating any severance, resignation, termination, redundancy, end-of-service
payments, bonuses, long-service awards, pension or retirement benefits or
similar payments;


6.7           in the event that the Participant is
not an employee of the Company, the Option grant will not be interpreted to
form an employment contract or relationship with the Company; and furthermore,
the Option grant will not be interpreted to form an employment contract with
the other members of the Participating Company Group;


6.8           the future value of the underlying
shares is unknown and cannot be predicted with certainty;


6.9           if the underlying shares do not
increase in value, the Option will have no value;


6.10         if the Participant exercises the Option
and obtains shares, the value of those shares acquired upon exercise may
increase or decrease in value, even below the Option price; and


6.11         no claim or entitlement to compensation
or damages arises from termination of the Option or diminution in value of the Option
or shares purchased through exercise of the Option resulting from termination
of the Participant’s Service with the Participating Company Group (for any
reason whether or not in breach of applicable labor laws) and the Participant
irrevocably releases the Participating Company Group from any such claim that
may arise.  If, notwithstanding the
foregoing, any such claim is found by a court of competent jurisdiction to have
arisen then, by signing this Option Agreement, you shall be deemed irrevocably
to have waived your entitlement to pursue such a claim.


7.             TERMINATION OF THE OPTION.


                                The
Option shall terminate and may no longer be exercised after the first to occur
of (a) the Option Expiration Date, (b) the last date for exercising
the Option following termination of the Participant’s Service as described in
Section 8, or (c) a Change in Control to the extent provided in
Section 9.


 


8.             EFFECT OF TERMINATION OF SERVICE.


8.1           Option Exercisability.


(a)           Normal Retirement.  If the Participant’s Service terminates at or
after the normal retirement age sixty-five (65) years (“Normal Retirement”), then (i) the Option, to the extent
unexercised and exercisable on the date on which the Participant’s Service
terminated, may be exercised by the Participant at any time prior to the
expiration of twelve (12) months after the date on which the Participant’s
Service terminated, but in any event no later than the Option Expiration Date,
and (ii) solely for the purpose of computing the Vested Percentage, the
Participant will be given credit for an additional twelve (12) months of
continuous Service; provided, however, that in no event shall the Vested
Percentage exceed 100%.


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(b)           Early Retirement.  If the Participant’s Service terminates by reason of the early
retirement of the Participant pursuant to an early retirement program
established by the Participating Company to which the Participant renders
Service (“Early Retirement”),
then (i) the Option, to the extent unexercised and exercisable on the date on
which the Participant’s Service terminated, may be exercised by the Participant
at any time prior to the expiration of three (3) months (or such longer period
as shall be established pursuant to such early retirement program) after the
date on which the Participant’s Service terminated, but in any event no later
than the Option Expiration Date, and (ii) solely for the purpose of
computing the Vested Percentage, the Participant will be given credit for such
additional months of continuous Service, if any, as shall be established
pursuant to the early retirement program; provided, however, that in no event
shall the Vested Percentage exceed 100%.


(c)           Disability.  If the Participant’s Service terminates
because of the Disability of the Participant, then (i) the Option, to the
extent unexercised and exercisable on the date on which the Participant’s
Service terminated, may be exercised by the Participant (or the Participant’s
guardian or legal representative) at any time prior to the expiration of twelve
(12) months after the date on which the Participant’s Service terminated, but
in any event no later than the Option Expiration Date, and (ii) solely for
the purpose of computing the Vested Percentage, the Participant will be given
credit for an additional twelve (12) months of continuous Service; provided,
however, that in no event shall the Vested Percentage exceed 100%.


(d)           Death.  If the Participant’s Service terminates
because of the death of the Participant, then (i) the Option, to the extent
unexercised and exercisable on the date on which the Participant’s Service
terminated, may be exercised by the Participant’s legal representative or other
person who acquired the right to exercise the Option by reason of the
Participant’s death at any time prior to the expiration of twelve (12) months
after the date on which the Participant’s Service terminated, but in any event
no later than the Option Expiration Date, and (ii) solely for the purpose
of computing the Vested Percentage, the Participant will be given credit for an
additional twelve (12) months of continuous Service; provided, however, that in
no event shall the Vested Percentage exceed 100%.  The Participant’s Service shall be deemed to have terminated on
account of death if the Participant dies within three (3) months after the
Participant’s termination of Service.


(e)           Termination
After Change in Control.  If the Participant’s Service ceases as a
result of Termination After Change in Control (as defined below), then (i) the Option,
to the extent unexercised and exercisable on the date on which the
Participant’s Service terminated, may be exercised by the Participant (or the
Participant’s guardian or legal representative) at any time prior to the
expiration of twelve (12) months after the date on which the Participant’s
Service terminated, but in any event no later than the Option Expiration Date,
and (ii) solely for the purpose of computing the Vested Percentage, the
Participant will be given credit for an additional twelve (12) months of
continuous Service; provided, however, that in no event shall the Vested
Percentage exceed 100%.


(f)            Other
Termination of Service.  If
the Participant’s Service terminates for any reason, except Normal Retirement,
Early Retirement, Disability, death or Termination After Change in Control, the
Option, to the extent unexercised and exercisable by the Participant on the
date on which the Participant’s Service terminated, may be exercised by the
Participant at any time prior to the expiration of three (3) months (or such
other longer period of time as determined by the Committee, in its discretion)
after the date on which the Participant’s Service terminated, but in any event
no later than the Option Expiration Date.


8.2           Extension if Exercise Prevented by Law.  Notwithstanding the foregoing, if the
exercise of the Option within the applicable time periods set forth in
Section 8.1 is prevented by the provisions of Section 4.6, the Option
shall remain exercisable until three (3) months after the date the Participant
is notified by the Company that the Option is exercisable, but in any event no
later than the Option Expiration Date.


8.3           Extension if Participant Subject to Section 16(b).  Notwithstanding the foregoing, if a sale
within the applicable time periods set forth in Section 8.1 of shares
acquired upon the exercise of the Option would subject the Participant to suit
under Section 16(b) of the Exchange Act, the Option shall remain
exercisable until the earliest to occur of (i) the tenth (10th) day following
the date on which a sale of such shares by the Participant would no longer be
subject to such suit, (ii) the one hundred and ninetieth (190th) day after
the Participant’s termination of Service, or (iii) the Option Expiration
Date.


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8.4           Termination for Cause.  Notwithstanding any other provision of this
Option Agreement, if the Participant’s Service is terminated for Cause (as
defined below), the Option shall terminate and cease to be exercisable on the
effective date of such termination of Service.


8.5           Certain
Definitions.


(a)           “Termination After Change in Control”
shall mean either of the following events occurring within twelve (12) months
after a Change in Control:


(i)            termination by the
Participating Company Group of the Participant’s Service for any reason other
than for Cause (as defined below); or


(ii)           the Participant’s
resignation for Good Reason (as defined below) from all capacities in which the
Participant is then rendering Service within a reasonable period of time
following the event constituting Good Reason.


(iii)          Notwithstanding any
provision herein to the contrary, Termination After Change in Control shall not
include any termination of the Participant’s Service which (1) is for Cause (as
defined below); (2) is a result of the Participant’s Normal Retirement,
Early Retirement, death or Disability; (3) is a result of the
Participant’s voluntary termination of Service other than for Good Reason; or
(4) occurs prior to the effectiveness of a Change in Control.


(b)           “Cause”
shall mean any of the following: (i) the Participant’s conviction of a
felony; (ii) the Participant’s material act of fraud, dishonesty or other
malfeasance; or (iii) the Participant’s willful, improper disclosure of a Participating
Company’s confidential or proprietary information.


(c)           “Good Reason”
shall mean any one or more of the following:


(i)            without the
Participant’s express written consent, the assignment to the Participant of any
duties, or any limitation of the Participant’s responsibilities, substantially
inconsistent with the Participant’s positions, duties, responsibilities and
status with the Participating Company Group immediately prior to the date of
the Change in Control;


(ii)           without the
Participant’s express written consent, the relocation by more than 35 miles of
the principal place of the Participant’s Service immediately prior to the date
of the Change in Control, or the imposition of travel requirements
substantially more demanding of the Participant than such travel requirements
existing immediately prior to the date of the Change in Control;


(iii)          any failure by the
Participating Company Group to pay, or any material reduction by the
Participating Company Group of, (1) the Participant’s base salary in
effect immediately prior to the date of the Change in Control (unless
reductions comparable in amount, or percentage, and duration are concurrently
made for all other employees of the Participating Company Group with
responsibilities, organizational level and title comparable to the
Participant’s), or (2) the Participant’s bonus compensation, if any, in
effect immediately prior to the date of the Change in Control (subject to
applicable performance requirements with respect to the actual amount of bonus
compensation earned by the Participant); or


(iv)          any failure by the
Participating Company Group to (1) continue to provide the Participant
with the opportunity to participate, on terms no less favorable than those in
effect for the benefit of any employee or service provider group which
customarily includes a person holding the employment or service provider
position or a comparable position with the Participating Company Group then
held by the Participant, in any benefit or compensation plans and programs, including,
but not limited to, the Participating Company Group’s life, disability, health,
dental, medical, savings, profit sharing, stock purchase and retirement plans,
if any, in which the Participant was participating immediately prior to the
date of the Change in Control, or their equivalent, or (2) provide the
Participant with all other fringe benefits (or their equivalent) from time to
time in effect for the benefit of any employee or service provider group which
customarily includes a person holding the employment or service provider
position or a comparable position with the Participating Company Group then
held by the Participant.


8

















 


9.             CHANGE IN CONTROL.


9.1           Definitions.


(a)           An “Ownership
Change Event” shall be deemed to have occurred if any of
the following occurs with respect to the Company: (i) the direct or indirect
sale or exchange by the stockholders of the Company of all or substantially all
of the voting stock of the Company; (ii) a merger or consolidation in which the
Company is a party; (iii) 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 or more subsidiaries of the Company); or (iv) a liquidation or
dissolution of the Company.


(b)           A “Change in Control” shall mean an Ownership Change Event
or series of related Ownership Change Events (collectively, a “Transaction”)
in which the stockholders of the Company immediately before the Transaction do
not retain immediately after the Transaction, direct or indirect beneficial
ownership of more than fifty percent (50%) of the total combined voting power
of the outstanding voting securities of the Company or, in the case of an
Ownership Change Event described in Section 9.1(a)(iii), the entity to
which the assets of the Company were transferred.


9.2           Effect of Change in Control on Option.  In the event of a Change in Control, the
surviving, continuing, successor, or purchasing entity or parent thereof, as
the case may be (the “Acquiror”), may, without the consent of
Participant, either assume the Company’s rights and obligations under
outstanding the Option or substitute for the Option a substantially equivalent
option for the Acquiror’s stock.  In the
event the Acquiror elects not to assume or substitute for the Option in
connection with a Change in Control, the Committee shall provide that any
unexercised and/or unvested portions of the Option shall be immediately
exercisable and vested in full as of the date thirty (30) days prior to the
date of the Change in Control.  Any
exercise of the Option that was permissible solely by reason of this Section
9.2 shall be conditioned upon the consummation of the Change in Control.  The Option shall terminate and cease to be
outstanding effective as of the time of consummation of the Change in Control
to the extent that the Option is neither assumed by the Acquiror in connection
with the Change in Control nor exercised as of the time of consummation of the
Change in Control.


10.           ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.


                                In the event of any change in the
Stock through merger, consolidation, reorganization, reincorporation,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split, split-up, split-off, spin-off, combination of shares, exchange of shares
or similar change in the capital structure of the Company, or in the event of
payment of a dividend or distribution to the stockholders of the Company in a
form other than Stock (excepting normal cash dividends) that has a material
effect on the Fair Market Value of shares of Stock, appropriate adjustments
shall be made in the number, Exercise Price and class of shares subject to the
Option.  If a majority of the shares
which are of the same class as the shares that are subject to the Option are
exchanged for, converted into, or otherwise become (whether or not pursuant to
an Ownership Change Event) shares of another corporation (the “New Shares”),
the Committee may unilaterally amend the Option to provide that the Option is
exercisable for New Shares.  In the
event of any such amendment, the Number of Option Shares and the Exercise Price
shall be adjusted in a fair and equitable manner, as determined by the
Committee, in its discretion. 
Notwithstanding the foregoing, any fractional share resulting from an
adjustment pursuant to this Section 10 shall be rounded down to the
nearest whole number, and in no event may the Exercise Price be decreased to an
amount less than the par value, if any, of the stock subject to the Option. The
adjustments determined by the Committee pursuant to this Section 10 shall
be final, binding and conclusive.


 


11.           RIGHTS AS A STOCKHOLDER, EMPLOYEE OR CONSULTANT.


                                The Participant shall have no rights
as a stockholder with respect to any shares covered by the Option until the
date of the issuance of the shares for which the Option has been exercised (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company). 
No adjustment shall be made for dividends, distributions or other rights
for which the record date is prior to the date such shares are issued, except
as provided in Section 10.  If the
Participant is an Employee, the Participant understands and acknowledges that,
except as otherwise provided in a separate, written employment agreement
between a Participating Company and the Participant, the Participant’s
employment is “at will” and is for no 


 


9

















 


specified term.  Nothing in this Option Agreement shall
confer upon the Participant any right to continue in the Service of a
Participating Company or interfere in any way with any right of the
Participating Company Group to terminate the Participant’s Service as an
Employee or Consultant, as the case may be, at any time.


 


12.           MISCELLANEOUS PROVISIONS.


12.1         Designation
of Beneficiary.  Subject to
local laws and procedures, the Participant may file with the Company a written
designation of a beneficiary who, in the event of the death of the Participant,
shall thereafter be entitled to exercise the Option to the extent that it
remains exercisable in accordance with this Option Agreement.  Each designation will revoke all prior
designations by the Participant, shall be in a form prescribed by the Company,
and shall be effective only when filed by the Participant in writing with the
Company during the Participant’s lifetime. 
If the Participant is married and designates a beneficiary other than
the Participant’s spouse, the effectiveness of such designation may be subject
to the consent of the Participant’s spouse. 
If the Participant dies without an effective designation of a
beneficiary who is living at the time of the Participant’s death, the Option
may be exercised by the Participant’s legal representative to the extent that
it remains exercisable in accordance with this Option Agreement.  If the designated beneficiary survives the
Participant but dies before exercising the Option to the full extent that it
remains exercisable in accordance with this Option Agreement, then the Option
shall be exercisable by the legal representative of such deceased designated
beneficiary to the extent that it remains exercisable in accordance with this
Option Agreement.  The determination of
the Company as to which person, if any, qualifies as a designated beneficiary
shall be final, conclusive and binding on all persons.


12.2         Binding Effect.  This Option Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, executors,
administrators, successors and assigns.


12.3         Termination or Amendment.  The Committee may terminate or amend the
Plan or the Option at any time; provided, however, that except as provided in
Section 9.2 in connection with a Change in Control, no such termination or
amendment may adversely affect the Option or any unexercised portion hereof
without the consent of the Participant unless such termination or amendment is
necessary to comply with any applicable law or government regulation.  No amendment or addition to this Option
Agreement shall be effective unless in writing.


12.4         Delivery of Documents and Notices.  Any document relating to participating in
the Plan and/or notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given (except to the extent that this
Option Agreement provides for effectiveness only upon actual receipt of such
notice) upon personal delivery, electronic delivery, or upon deposit in the
U.S. Post Office or foreign postal service, by registered or certified mail,
with postage and fees prepaid, addressed to the other party at the e-mail
address, if any, provided for the Participant by a Participating Company or at
the address shown below that party’s signature to this Option Agreement or at
such other address as such party may designate in writing from time to time to
the other party.


(a)           Description
of Electronic Delivery.  The Plan
documents, which may include but do not necessarily include: the Plan
Prospectus, this Option Agreement and U.S. financial reports of the Company,
may be delivered to the Participant electronically.  In addition, the Participant may deliver electronically the
notice called for by Section 4.2 (the “Notice of Exercise”) to the Company or
to such third party involved in administering the Plan as the Company may
designate from time to time.  Such means
of delivery may include but do not necessarily include the delivery of a link
to a Company intranet or the internet site of a third party involved in administering
the Plan, the delivery of the document via e-mail or such other delivery
determined at the Committee’s discretion.


(b)           Consent
to Electronic Delivery.  The
Participant acknowledges that the Participant has read Section 12.4 of this
Option Agreement and consents to the electronic delivery of the Plan documents
and the delivery of the Notice of Exercise, as described in
Section 12.4(a) of this Option Agreement. 
The Participant acknowledges that he or she may receive from the Company
a paper copy of any documents delivered electronically at no cost if the
Participant contacts the Company by telephone, through a postal service or
electronic mail at equity@adobe.com. 
The Participant further acknowledges that the Participant will be
provided with a paper copy of any documents delivered electronically if
electronic delivery fails; similarly, the Participant understands that the
Participant must provide the Company or any designated third party with a paper
copy of any documents delivered electronically if electronic delivery
fails.  Also, the Participant
understands that the 


10

















 


Participant’s consent may
be revoked or changed, including any change in the electronic mail address to
which documents are delivered (if Participant has provided an electronic mail
address), at any time by notifying the Company of such revised or revoked
consent by telephone, postal service or electronic mail at
equity@adobe.com.  Finally, the Participant
understands that he or she is not required to consent to electronic delivery.


12.5         Data
Privacy Consent.  The
Participant hereby explicitly and unambiguously consents to the collection, use
and transfer, in electronic or other form, of the Participant’s personal data
as described in this document by and among the members of the Participating
Company Group for the exclusive purpose of implementing, administering and
managing the Participant’s participation in the Plan.


                                The
Participant understands that the Company and the Participating Company Group
hold certain personal information about the Participant, including, but not
limited to, the Participant’s name, home address and telephone number, date of
birth, social insurance number or other identification number, salary,
nationality, job title, any shares of Stock or directorships held in the
Company, details of all Options or any other entitlement to shares of Stock
awarded, canceled, exercised, vested, unvested or outstanding in the
Participant’s favor, for the purpose of implementing, administering and
managing the Plan (“Data”).  The
Participant understands that Data may be transferred to any third parties
assisting in the implementation, administration and management of the Plan,
that these recipients may be located in the Participant’s country or elsewhere,
and that the recipient’s country may have different data privacy laws and
protections than the Participant’s country. 
The Participant understands that he or she may request a list with the
names and addresses of any potential recipients of the Data by contacting the
Participant’s local human resources representative.  The Participant authorizes the recipients to receive, possess,
use, retain and transfer the Data, in electronic or other form, for the
purposes of implementing, administering and managing the Participant’s
participation in the Plan, including any requisite transfer of such Data as may
be required to a broker or other third party with whom the Participant may
elect to deposit any shares of Stock acquired upon exercise of the Option.  The Participant understands that Data will
be held only as long as is necessary to implement, administer and manage the
Participant’s participation in the Plan. 
The Participant understands that he or she may, at any time, view Data,
request additional information about the storage and processing of Data,
require any necessary amendments to Data or refuse or withdraw the consents
herein, in any case without cost, by contacting in writing the Participant’s
local human resources representative. 
The Participant understands, however, that refusing or withdrawing the
Participant’s consent may affect the Participant’s ability to participate in
the Plan.  For more information on the
consequences of the Participant’s refusal to consent or withdrawal of consent,
the Participant understands that he or she may contact the Participant’s local
human resources representative.


 


12.6         Integrated Agreement.  This Option Agreement, together with the
Superseding Agreement, if any, constitutes the entire understanding and
agreement of the Participant and the Participating Company Group with respect
to the subject matter contained herein and supersedes any prior agreements,
understandings, restrictions, representations, or warranties among the
Participant and the Participating Company Group with respect to such subject
matter other than those as set forth or provided for herein.  To the extent contemplated herein, the
provisions of this Option Agreement shall survive any exercise of the Option
and shall remain in full force and effect.


12.7         Applicable Law.  This Option Agreement shall be governed by the laws of the State
of California as such laws are applied to agreements between California
residents entered into and to be performed entirely within the State of California.


11

















 


12.8         Counterparts.  This Option Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.


	
   

  	
  ADOBE
  SYSTEMS INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Murray
  J. Demo

  
	
   

  	
  Title:

  	
  Senior
  Vice President, Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  345
  Park Avenue

  San Jose, CA 95110-2704

  



 


                The Participant represents that
the Participant is familiar with the terms and provisions of this Option
Agreement and hereby accepts the Option subject to all of the terms and
provisions thereof.  The Participant
hereby agrees to accept as binding, conclusive and final all decisions or
interpretations of the Committee upon any questions arising under this Option
Agreement.


 


	
   

  	
   

  	
   

  	
  PARTICIPANT

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature

  



 


 


 


 


12

















 


ADOBE SYSTEMS INCORPORATED


RESTRICTED STOCK AGREEMENT


 


 


                THIS RESTRICTED
STOCK AGREEMENT (the “Agreement”) is made and entered
into as of the Date of Grant by and between Adobe Systems Incorporated and


 


                                                                                                (the
“Participant”).  The Company has granted to the Participant
pursuant to the Adobe Systems Incorporated 2003 Equity Incentive Plan (the “Plan”)
an award of certain shares of Stock (the “Award”), upon the terms and conditions set forth in this
Agreement, but subject in any event to the Superseding Agreement, if any,
described below.


 


13.           Definitions
and Construction.


 


13.1         Definitions.  Whenever used herein, the following terms shall have their
respective meanings set forth below:


 


(a)           “Date of Grant” means


 


(b)           “Total Number
of Shares” means                    shares of Stock, as adjusted from time to
time pursuant to Section 8.


 


(c)           “Vested Shares” means, on any relevant date and provided
that the Participant’s Service has not terminated prior to such date, a number
of shares of Stock determined as follows:


 


	
   

  	
   

  	
  Vesting
  Date

  	
   

  	
  No. Shares
  Vesting

  	
   

  	
  Cumulative

  No. Shares Vested

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


(d)           “Affiliate”
means (i) an entity, other than a Parent Corporation, that directly, or
indirectly through one or more intermediary entities, controls the Company or
(ii) an entity, other than a Subsidiary Corporation, that is controlled by
the Company directly, or indirectly through one or more intermediary
entities.  For this purpose, the term
“control” (including the term “controlled by”) means the possession, direct or
indirect, of the power to direct or cause the direction of the management and policies
of the relevant entity, whether through the ownership of voting securities, by
contract or otherwise; or shall have such other meaning assigned such term for
the purposes of registration in the United States (“U.S.”) on Form S-8 under
the Securities Act.


 


(e)           “Board”
means the Board of Directors of the Company.


 


(f)            “Change in Control” means an Ownership Change Event or
series of related Ownership Change Events (collectively, a “Transaction”) in which the
stockholders of the Company immediately before the Transaction do not retain
immediately after the Transaction, direct or indirect beneficial ownership of
more than fifty percent (50%) of the total combined voting power of the
outstanding voting securities of the Company or, in the case of an Ownership
Change Event described in Section 1.1(p)(iii) below, the entity to which
the assets of the Company were transferred.


 


(g)           “Code” means the U.S.
Internal Revenue Code of 1986, as amended, and any applicable regulations
promulgated thereunder.


 


(h)           “Committee” the
Executive Compensation Committee or other committee of the Board duly appointed
to administer the Plan and having such powers as shall be specified by the
Board.  If no 


 


13

















 


committee of the
Board has been appointed to administer the Plan, the Board shall exercise all
of the powers of the Committee granted herein, and, in any event, the Board may
in its discretion exercise any or all of such powers.


(i)            “Company”
means Adobe Systems Incorporated, a Delaware corporation, or any successor
corporation thereto.


 


(j)            “Consultant”
means a person engaged to provide consulting or advisory services (other than
as an Employee or a member of the Board) to a Participating Company, provided
that the identity of such person, the nature of such services or the entity to
which such services are provided would not preclude the Company from offering
or selling securities to such person pursuant to the Plan in reliance on
registration on a Form S-8 Registration Statement under the Securities Act.


 


(k)           “Disability”
means the permanent and total disability of the Participant within the meaning
of Section 22(e)(3) of the Code.


 


(l)            “Employee”
means any person treated as an employee (including an Officer or a member of
the Board who is also treated as an employee) in the records of a Participating
Company; provided, however, that neither service as a member of the Board nor
payment of a director’s fee shall be sufficient to constitute employment.


 


(m)          “Exchange Act”
means the U.S. Securities Exchange Act of 1934, as amended.


 


(n)           “Officer” means any person
designated by the Board as an officer of the Company.


 


(o)           “Ownership
Change Event” means the occurrence of any of the
following with respect to the Company: (i) the direct or indirect sale or
exchange by the stockholders of the Company of all or substantially all of the
voting stock of the Company; (ii) a merger or consolidation in which the
Company is a party; (iii) 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 or more subsidiaries of the Company); or (iv) a liquidation or
dissolution of the Company.


 


(p)           “Parent Corporation”
means any present or future “parent corporation” of the Company, as defined in
Section 424(e) of the Code.


 


(q)           “Participating Company”
means the Company or any Parent Corporation, Subsidiary Corporation or
Affiliate.


 


(r)            “Participating Company Group”
means, at any point in time, all corporations collectively which are then
Participating Companies.


 


(s)           “Service”
means the Participant’s employment or service with the Participating Company
Group as an Employee or a Consultant, whichever such capacity the Participant
held on the Date of Grant or, if later, the date on which the Participant
commenced Service.  The Participant’s
Service shall be deemed to have terminated if the Participant ceases to render
Service to the Participating Company Group in such initial capacity.  However, the Participant’s Service shall not
be deemed to have terminated merely because of a change in the Participating
Company for which the Participant renders Service in such initial capacity,
provided that there is no interruption or termination of the Participant’s
Service.  Furthermore, the Participant’s
Service with the Participating Company Group shall not be deemed to have
terminated if the Participant takes any bona fide leave of absence approved by
the Company of ninety (90) days or less. 
In the event of a leave in excess of ninety (90) days, the Participant’s
Service shall be deemed to terminate on the ninety-first (91st) day of the
leave unless the Participant’s right to return to Service with the
Participating Company Group is guaranteed by statute or contract.  Notwithstanding the foregoing, unless
otherwise designated by the Company or required by law, a leave of absence
shall not be treated as Service for purposes of determining vesting under the
Agreement.  The Participant’s Service
shall be deemed to have terminated either upon an actual termination of Service
or upon the corporation for which the Participant performs Service ceasing to
be a Participating Company.  Subject to
the foregoing, the Company, in its discretion, shall determine whether the
Participant’s Service has terminated and the effective date of such
termination.


 


14

















 


(t)            “Stock”
means the common stock of the Company, as adjusted from time to time in
accordance with Section 8.


 


(u)           “Subsidiary Corporation”
means any present or future “subsidiary corporation” of the Company, as defined
in Section 424(f) of the Code.


 


(v)           “Superseding Agreement” means the
Adobe Systems Incorporated Executive Severance Plan in the Event of a Change in
Control or any successor plan or agreement in which the Participant is a
participant or to which the Participant is a party (in each such instance, the
“Severance Plan”), or any agreement to which the Participant is a party which,
by its existence alone, prevents the Participant from being eligible to
participate in the Severance Plan.  The
terms and conditions of any such Superseding Agreement shall, notwithstanding
any provision of this Agreement to the contrary, supersede any inconsistent
term or condition set forth in this Agreement to the extent intended by such
Superseding Agreement.


 


13.2         Construction.  Captions and titles contained herein are for convenience only and
shall not affect the meaning or interpretation of any provision of this
Agreement.  Except when otherwise indicated
by the context, the singular shall include the plural and the plural shall
include the singular.  Use of the term
“or” is not intended to be exclusive, unless the context clearly requires
otherwise.


 


14.           The Award.


 


14.1         Grant and Issuance of Shares.  On the Date of Grant, the Participant shall
acquire and the Company shall issue, subject to the provisions of this
Agreement, a number of shares of Stock equal to the Total Number of Shares (the
“Shares”).  As a condition to the issuance of the
Shares, the Participant shall execute and deliver to the Company: (a) the Joint
Escrow Instructions in the form attached hereto as Exhibit A and (b) the
Assignment Separate from Certificate duly endorsed (with date and number of
shares blank) in the form attached hereto as Exhibit B.


 


14.2         No Monetary Payment Required.  The Participant is not required to make any
monetary payment (other than applicable tax withholding, if any) as a condition
to receiving the Shares, the consideration for which shall be past services
actually rendered to a Participating Company or for its benefit.


 


14.3         Certificate Registration.  The certificate for the Shares shall be
registered in the name of the Participant, or, if applicable, in the names of the heirs of the
Participant.


 


14.4         Issuance of Shares in Compliance with Law.  The issuance of the Shares shall be subject
to compliance with all applicable requirements of federal, state or foreign law
with respect to such securities.  No
Shares shall be issued hereunder if their issuance would constitute a violation
of any applicable federal, state or foreign securities laws or other law or
regulations or the requirements of any stock exchange or market system upon
which the Stock may then be listed.  The
inability of the Company to obtain from any regulatory body having jurisdiction
the authority, if any, deemed by the Company’s legal counsel to be necessary to
the lawful issuance of any Shares shall relieve the Company of any liability in
respect of the failure to issue such Shares as to which such requisite
authority shall not have been obtained. 
As a condition to the issuance of the Shares, the Company may require
the Participant
to satisfy any qualifications that may be necessary or appropriate, to evidence
compliance with any applicable law or regulation and to make any representation
or warranty with respect thereto as may be requested by the Company.


 


15.           Vesting of Shares.


 


15.1         Normal Vesting.  Except as provided in Section 3.2, the
Shares shall vest and become Vested Shares as provided in Section 1.1(c)
above.  No additional Shares will become
Vested Shares following the Participant’s termination of Service for any
reason.


 


15.2         Acceleration of Vesting Upon a Change in Control.  In the event of a Change in Control, the
vesting of the Shares shall be accelerated in full and the Total Number of
Shares shall be deemed Vested Shares effective as of the date of the Change in
Control, provided that the Participant’s Service has not terminated prior to
such date.


 


15

















 


15.3         Federal Excise Tax Under Section 4999 of the Code.


 


(a)           Excess Parachute Payment.  In the event that any acceleration of
vesting pursuant to this Agreement and any other payment or benefit received or
to be received by the Participant would subject the Participant to any excise
tax pursuant to Section 4999 of the Code due to the characterization of such
acceleration of vesting, payment or benefit as an excess parachute payment
under Section 280G of the Code, the Participant may elect, in his or her sole
discretion, to reduce the amount of any acceleration of vesting called for
under this Agreement in order to avoid such characterization.


 


(b)           Determination by Independent Accountants.  To aid the Participant in making any
election called for under Section 3.3(a), upon the occurrence of any event that
might reasonably be anticipated to give rise to the application of Section 3.2
(an “Event”), the Company shall
promptly request a determination in writing by independent public accountants
selected by the Company (the “Accountants”).  Unless the Company and the Participant
otherwise agree in writing, the Accountants shall determine and report to the
Company and the Participant within twenty (20) days of the date of the Event
the amount of such acceleration of vesting, payments and benefits which would
produce the greatest after-tax benefit to the Participant.  For the purposes of such determination, the
Accountants may rely on reasonable, good faith interpretations concerning the
application of Sections 280G and 4999 of the Code.  The Company and the Participant shall furnish to the Accountants
such information and documents as the Accountants may reasonably request in
order to make their required determination. 
The Company shall bear all fees and expenses the Accountants may
reasonably charge in connection with their services contemplated by this
Section 3.3(b).


 


16.           Company Reacquisition Right.


 


16.1         Grant of Company Reacquisition Right.  Except as otherwise provided by a
Superseding Agreement, if any, in the event that (a) the Participant’s Service terminates for
any reason or no reason, with or without cause, or (b) the Participant, the
Participant’s legal
representative, or other holder of the Shares, attempts to sell, exchange,
transfer, pledge, or otherwise dispose of (other than pursuant to an Ownership
Change Event), including, without limitation, any transfer to a nominee or
agent of the Participant, any Shares which are not then Vested Shares (the “Unvested Shares”),
the Company shall automatically reacquire the Unvested Shares, and the
Participant shall not be entitled to any payment therefor (the “Company
Reacquisition Right”).


 


16.2         Ownership Change Event.  Upon the occurrence of an Ownership Change
Event, any and all new, substituted or additional securities or other property
to which the Participant is entitled by reason of the Participant’s ownership of Unvested
Shares shall be immediately subject to the Company Reacquisition Right and
included in the terms “Shares,” “Stock” and “Unvested Shares” for all purposes
of the Company Reacquisition Right with the same force and effect as the
Unvested Shares immediately prior to the Ownership Change Event.  For purposes of determining the number of
Vested Shares following an Ownership Change Event, credited Service shall
include all Service with any entity which is a Participating Company at the
time the Service is rendered, whether or not such entity is a Participating
Company both before and after the Ownership Change Event.


 


17.           Tax Matters.


 


17.1         Tax Withholding.


 


(a)           In General.  Regardless of any action taken by the Participating Company Group
with respect to any or all income tax, social insurance, payroll tax, payment
on account or other tax-related withholding (“Tax-Related Items”), the Participant
acknowledges that the ultimate liability for all Tax-Related Items legally due
by the Participant is and remains the Participant’s responsibility and that the
Participating Company Group (i) makes no representations or undertakings
regarding the treatment of any Tax-Related Items in connection with any aspect
of the Award, including the grant or vesting of the Award, the subsequent sale
of Shares acquired pursuant to the Award, or the receipt of any dividends and
(ii) does not commit to structure the terms of the grant or any other aspect of
the Award to reduce or eliminate the Participant’s liability for Tax-Related
Items.  The Participant shall pay or
make adequate arrangements satisfactory to the Participating Company Group to
satisfy all withholding obligations of the Participating Company Group.  In this regard, at the time that this
Agreement is executed, or at any time thereafter as requested by a
Participating Company, the Participant
hereby authorizes withholding of all applicable Tax-Related Items from payroll
and any other amounts payable to the Participant, and 


16

















 


otherwise agrees
to make adequate provision for withholding of all applicable Tax-Related Item
withholding obligations of the Participating Company, if any, which arise in
connection with the Award, including, without limitation, obligations arising
upon (a) the transfer of Shares to the Participant, (b) the lapsing
of any restriction with respect to any Shares, (c) the filing of an election to
recognize tax liability, or (d) the transfer by the Participant of any
Shares.  Alternatively, or in addition,
if permissible under applicable law, the Participating Company Group may sell
or arrange for the sale of Shares acquired by the Participant to meet the
withholding obligation of Tax-Related Items. 
Finally, the Participant shall pay to the Participating Company Group
any amount of the Tax-Related Items that the Participating Company Group may be
required to withhold as a result of the Participant’s participation in the Plan
that cannot be satisfied by the means previously described.  The Company shall have no obligation to
deliver the Shares or to release any Shares from an escrow established pursuant
to this Agreement until the obligations in connection with the Tax-Related
Items described in this section have been satisfied by the Participant.


 


(b)           Withholding
in Shares.  Subject to
approval by the Company, in its discretion, the Participant may satisfy all or
any portion of the Participating Company’s Tax-Related Item withholding
obligations by requesting the Company to withhold a number of whole, Vested
Shares otherwise deliverable to the Participant pursuant to this Agreement or
by tendering to the Company a number of whole, vested shares of Stock acquired
pursuant to this Agreement or otherwise having in any such case a fair market
value, as determined by the Company as of the date on which the Tax-Related
Item withholding obligations arise, not in excess of the amount of such tax
withholding obligations determined by the applicable minimum statutory
withholding rates.  Any adverse
consequences to the Participant resulting from the procedure permitted under
this Section, including, without limitation, tax consequences, shall be the
sole responsibility of the Participant.


 


17.2         Election Under Section 83(b) of the Code.


 


(a)           The Participant understands that
Section 83 of the Code taxes as ordinary income the difference between the
amount paid for the Shares, if anything, and the fair market value of the
Shares as of the date on which the Shares are “substantially vested,” within
the meaning of Section 83.  In this
context, “substantially vested” means that the right of the Company to
reacquire the Shares pursuant to the Company Reacquisition Right has
lapsed.  The Participant understands
that he or she may elect to have his or her taxable income determined at the
time he or she acquires the Shares rather than when and as the Company
Reacquisition Right lapses by filing an election under Section 83(b) of the
Code with the Internal Revenue Service no later than thirty (30) days after the
date of acquisition of the Shares.  The
Participant understands that failure to make a timely filing under Section
83(b) will result in his or her recognition of ordinary income, as the Company
Reacquisition Right lapses, on the difference between the purchase price, if
anything, and the fair market value of the Shares at the time such restrictions
lapse.  The Participant further
understands, however, that if Shares with respect to which an election under
Section 83(b) has been made are forfeited to the Company pursuant to its
Company Reacquisition Right, such forfeiture will be treated as a sale on which
there is realized a loss equal to the excess (if any) of the amount paid (if
any) by the Participant for the forfeited Shares over the amount realized (if
any) upon their forfeiture.  If the
Participant has paid nothing for the forfeited Shares and has received no payment
upon their forfeiture, the Participant understands that he or she will be
unable to recognize any loss on the forfeiture of the Shares even though the
Participant incurred a tax liability by making an election under Section 83(b).


 


(b)           The Participant understands that he
or she should consult with his or her tax advisor regarding the advisability of
filing with the Internal Revenue Service an election under Section 83(b) of the
Code, which must be filed no later than thirty (30) days after the date of the
acquisition of the Shares pursuant to this Agreement.  Failure to file an election under Section 83(b), if
appropriate, may result in adverse tax consequences to the Participant.  The Participant acknowledges that he or she
has been advised to consult with a tax advisor regarding the tax consequences
to the Participant of the acquisition of Shares hereunder.  ANY ELECTION UNDER SECTION 83(b) THE
PARTICIPANT WISHES TO MAKE MUST BE FILED NO LATER THAN 30 DAYS AFTER THE
DATE ON WHICH THE PARTICIPANT ACQUIRES THE SHARES.  THIS TIME PERIOD CANNOT BE EXTENDED.  THE PARTICIPANT ACKNOWLEDGES THAT TIMELY FILING OF A SECTION
83(b) ELECTION IS THE PARTICIPANT’S SOLE RESPONSIBILITY, EVEN IF THE
PARTICIPANT REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO FILE SUCH ELECTION ON
HIS OR HER BEHALF.


 


(c)           The Participant will notify the
Company in writing if the Participant files an election pursuant to
Section 83(b) of the Code.  The
Company intends, in the event it does not receive from the 


 


17

















 


Participant evidence
of such filing, to claim a tax deduction for any amount which would otherwise
be taxable to the Participant in the absence of such an election.


18.           Escrow.


 


18.1         Establishment of Escrow.  To ensure that Shares subject to the Company
Reacquisition Right will be available for reacquisition, the Participant agrees
to deliver to and deposit with an escrow agent designated by the Company the
certificate evidencing the Shares, together with an Assignment Separate from
Certificate with respect to such certificate duly endorsed (with date and
number of shares blank) in the form attached to this Agreement as Exhibit B,
to be held by the agent under the terms and conditions of the Joint Escrow
Instructions in the form attached to this Agreement as Exhibit A
(the “Escrow”).  The Company shall bear the expenses of the
escrow.


 


18.2         Delivery of Shares to Participant.  Whenever
the Participant or the Participant’s legal representative proposes to sell,
exchange, transfer, pledge or otherwise dispose of (other than pursuant to an
Ownership Change Event) any Shares subject to the Escrow, the Participant shall
so notify the Company.  As soon as
practicable thereafter, the Company shall determine, in its sole discretion,
whether (a) such proposed disposition would not cause the Company to
automatically reacquire such Shares pursuant to the Company Reacquisition Right
and (b) the Participant has made adequate provision for the tax withholding
obligations, if any, pursuant to Section 5. 
If both conditions (a) and (b) set forth in the preceding sentence are
satisfied, the Company shall, as soon as practicable, so notify the Participant
and give to the escrow agent a written notice directing the escrow agent to
deliver such Shares to the Participant. 
As soon as practicable after receipt of such notice, the escrow agent
shall deliver to the Participant the Shares specified in such notice, and the
Escrow shall terminate with respect to such Shares.


 


19.           Nature
of the Award.


 


                                In accepting the Award, the
Participant acknowledges that:


 


19.1         the Plan is established voluntarily by
the Company; it is discretionary in nature and it may be modified, amended,
suspended or terminated by the Company at any time, unless otherwise provided
in the Plan and this Agreement;


 


19.2         the grant of the Award is voluntary and
occasional and does not create any contractual or other right to receive future
grants of Awards, or benefits in lieu of Awards, even if Awards have been
granted repeatedly in the past;


 


19.3         all decisions with respect to future Award
grants, if any, will be at the sole discretion of the Company;


 


19.4         the Participant’s participation in the
Plan shall not create a right to further employment with the Participating
Company Group and shall not interfere with the ability of the Participating
Company Group to terminate the Participant’s employment relationship at any
time with or without cause;


 


19.5         the Participant is voluntarily
participating in the Plan;


 


19.6         the Award is not part of normal or
expected compensation or salary for any purpose, including, but not limited to,
calculating any severance, resignation, termination, redundancy, end-of-service
payments, bonuses, long-service awards, pension or retirement benefits or
similar payments;


 


19.7         in the event that the Participant is not
an employee of the Company, the Award grant will not be interpreted to form an
employment contract or relationship with the Company; and furthermore, the
Award grant will not be interpreted to form an employment contract with the
other members of the Participating Company Group;


 


19.8         the future value of the Shares is
unknown and cannot be predicted with certainty; and


 


19.9         no claim or entitlement to compensation
or damages arises from termination of the Award or diminution in value of the
Award resulting from termination of the Participant’s Service with the 


 


18

















 


Participating
Company Group (for any reason whether or not in breach of applicable labor
laws), and the Participant irrevocably releases the Participating Company Group
from any such claim that may arise.  If,
notwithstanding the foregoing, any such claim is found by a court of competent
jurisdiction to have arisen then, by signing this Agreement, you shall be
deemed irrevocably to have waived your entitlement to pursue such a claim.


20.           Adjustments for Changes in Capital
Structure.


 


                                In
the event of any change in the Stock through merger, consolidation,
reorganization, reincorporation, recapitalization, reclassification, stock
dividend, stock split, reverse stock split, split-up, split-off, spin-off,
combination of shares, exchange of shares or similar change in the capital
structure of the Company, appropriate adjustments shall be made in the number
and class of shares subject to this Agreement. 
Any and all new, substituted or additional securities or other property
to which Participant is entitled by reason of his or her ownership of the
Shares will be immediately subject to the provisions of this Agreement and the
Escrow on the same basis as all Shares originally acquired hereunder and will
be included in the terms “Shares” and “Stock” for all purposes of this
Agreement and the Escrow with the same force and effect as the Shares presently
subject thereto.  The adjustments
determined by the Committee pursuant to this Section shall be final, binding
and conclusive.


 


21.           Legends.


 


                                The
Company may at any time place legends referencing the Company Reacquisition
Right and any applicable federal, state or foreign securities law restrictions
on all certificates representing the Shares. 
The Participant shall, at the request of the Company, promptly present
to the Company any and all certificates representing the Shares in the
possession of the Participant in order to carry out the provisions of this Section.  Unless otherwise specified by the Company,
legends placed on such certificates may include, but shall not be limited to,
the following:


 


“THE SECURITIES REPRESENTED BY
THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS SET FORTH IN AN AGREEMENT BETWEEN
THIS CORPORATION AND THE REGISTERED HOLDER, OR HIS PREDECESSOR IN INTEREST, A
COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THIS CORPORATION.”


 


22.           Transfers in Violation of Agreement.


 


                                No
Shares may be sold, exchanged, transferred (including, without limitation, any
transfer to a nominee or agent of the Participant), assigned, pledged,
hypothecated or otherwise disposed of, including by operation of law, in any
manner which violates any of the provisions of this Agreement and, except
pursuant to an Ownership Change Event, until the date on which such shares
become Vested Shares, and any such attempted disposition shall be void.  The Company shall not be required
(a) to transfer on its books any Shares which will have been transferred
in violation of any of the provisions set forth in this Agreement or (b) to
treat as owner of such Shares or to accord the right to vote as such owner or
to pay dividends to any transferee to whom such Shares will have been so
transferred.  In order to enforce its rights under this Section, the Company shall be
authorized to give a stop transfer instruction with respect to the Shares to
the Company’s transfer agent.


 


23.           Rights as a Stockholder.


 


                                The
Participant shall have no rights as a stockholder with respect to
any Shares subject to the Award until the date of the issuance of a certificate
for such Shares (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company).  No adjustment shall be made for dividends,
distributions or other rights for which the record date is prior to the date
such certificate is issued, except as provided in Section 8.  Subject the provisions of this Agreement,
the Participant shall exercise all rights and privileges of a stockholder of
the Company with respect to Shares deposited in the Escrow pursuant to Section
6.


 


24.           Rights as Employee or Consultant.


 


                                If the Participant is an Employee,
the Participant understands and acknowledges that, except as otherwise provided
in a separate, written employment agreement between a Participating Company and
the Participant, the Participant’s employment is “at will” and is for no specified
term.  Nothing in this Agreement shall 


 


19

















 


confer upon the
Participant any right to continue in the Service of a Participating Company or
interfere in any way with any right of the Participating Company Group to
terminate the Participant’s Service at any time.


 


25.           Miscellaneous Provisions.


 


25.1         Administration.  All questions of interpretation concerning this Agreement shall
be determined by the Committee.  All
determinations by the Committee shall be final and binding upon all persons
having an interest in the Award.  Any
Officer 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.


 


25.2         Termination or Amendment.  The Committee may terminate or amend the
Plan or this Agreement at any time; provided, however, that no such termination
or amendment may adversely affect the Participant’s rights under this Agreement
without the consent of the Participant unless such termination or amendment is necessary to comply
with applicable law or government regulation.  No amendment or addition to this Agreement shall be effective
unless in writing.


 


25.3         Binding Effect.  This Agreement shall inure to the benefit of the successors and
assigns of the Company and, subject to the restrictions on transfer set forth
herein, be binding upon the Participant and the Participant’s heirs, executors,
administrators, successors and assigns.


 


25.4         Fractional Shares.  The Company shall not be required to issue fractional shares in
connection with the Award.


 


25.5         Nontransferability of the Award.  The right to acquire Shares pursuant to the
Award may not be assigned or transferred in any manner except by will or by the
laws of descent and distribution. 
During the lifetime of the Participant, all rights with respect to this
Award shall be exercisable only by the Participant.


 


25.6         Further Instruments.  The parties hereto agree to execute such
further instruments and to take such further action as may reasonably be
necessary to carry out the intent of this Agreement.


 


25.7         Delivery of Documents and Notices.  Any document relating to participating in
the Plan and/or notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given (except to the extent that this
Agreement provides for effectiveness only upon actual receipt of such notice)
upon personal delivery, electronic delivery, or upon deposit in the U.S. Post
Office or foreign postal service, by registered or certified mail, with postage
and fees prepaid, addressed to the other party at the address shown below that
party’s signature or at such other address as such party may designate in
writing from time to time to the other party.


 


(a)           Description
of Electronic Delivery.  The Plan
documents, which may include but do not necessarily include: the Plan
Prospectus, this Agreement and U.S. financial reports of the Company, may be
delivered to the Participant electronically. 
Such means of delivery may include but do not necessarily include the
delivery of a link to a Company intranet or the internet site of a third party
involved in administering the Plan, the delivery of the document via e-mail or
such other delivery determined at the Committee’s discretion.


 


(b)           Consent
to Electronic Delivery.  The
Participant acknowledges that the Participant has read Section 13.7 of this
Agreement and consents to the electronic delivery of the Plan documents, as
described in Section 13.7(a) of this Agreement.  The Participant acknowledges that he or she may receive from the
Company a paper copy of any documents delivered electronically at no cost if
the Participant contacts the Company by telephone, through a postal service or
electronic mail at equity@adobe.com. 
The Participant further acknowledges that the Participant will be
provided with a paper copy of any documents delivered electronically if
electronic delivery fails; similarly, the Participant understands that the
Participant must provide the Company or any designated third party with a paper
copy of any documents delivered electronically if electronic delivery
fails.  Also, the Participant
understands that the Participant’s consent may be revoked or changed, including
any change in the electronic mail address to which documents are delivered (if
Participant has provided an electronic mail address), at any time by notifying
the Company of such revised or revoked consent by telephone, postal service or
electronic mail at equity@adobe.com. 
Finally, the Participant understands that he or she is not required to
consent to electronic delivery.


 


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25.8         Data Privacy Consent.  The Participant hereby explicitly and
unambiguously consents to the collection, use and transfer, in electronic or
other form, of the Participant’s personal data as described in this document by
and among the members of the Participating Company Group for the exclusive
purpose of implementing, administering and managing the Participant’s
participation in the Plan.


 


                                The
Participant understands that the Company and the Participating Company Group
hold certain personal information about the Participant, including, but not
limited to, the Participant’s name, home address and telephone number, date of
birth, social insurance number or other identification number, salary,
nationality, job title, any shares of Stock or directorships held in the
Company, details of all Awards or any other entitlement to shares of Stock
awarded, canceled, exercised, vested, unvested or outstanding in the
Participant’s favor, for the purpose of implementing, administering and
managing the Plan (“Data”).  The
Participant understands that Data may be transferred to any third parties
assisting in the implementation, administration and management of the Plan,
that these recipients may be located in the Participant’s country or elsewhere,
and that the recipient’s country may have different data privacy laws and
protections than the Participant’s country. 
The Participant understands that he or she may request a list with the
names and addresses of any potential recipients of the Data by contacting the
Participant’s local human resources representative.  The Participant authorizes the recipients to receive, possess,
use, retain and transfer the Data, in electronic or other form, for the
purposes of implementing, administering and managing the Participant’s
participation in the Plan, including any requisite transfer of such Data as may
be required to a broker or other third party with whom the Participant may
elect to deposit any shares of Stock acquired pursuant to the Award.  The Participant understands that Data will
be held only as long as is necessary to implement, administer and manage the
Participant’s participation in the Plan. 
The Participant understands that he or she may, at any time, view Data,
request additional information about the storage and processing of Data,
require any necessary amendments to Data or refuse or withdraw the consents
herein, in any case without cost, by contacting in writing the Participant’s
local human resources representative. 
The Participant understands, however, that refusing or withdrawing the
Participant’s consent may affect the Participant’s ability to participate in
the Plan.  For more information on the
consequences of the Participant’s refusal to consent or withdrawal of consent,
the Participant understands that he or she may contact the Participant’s local
human resources representative.


 


25.9         Integrated Agreement.  This Agreement, together with the
Superseding Agreement, if any, constitutes the entire understanding and
agreement of the Participant
and the Participating Company Group with respect to the subject matter
contained herein and supersedes any prior agreements, understandings,
restrictions, representations, or warranties among the Participant and the Company with
respect to such subject matter other than those as set forth or provided for
herein.


 


25.10       Applicable Law.  The Agreement shall be governed by the laws of the State of
California as such laws are applied to agreements between California residents
entered into and to be performed entirely within the State of California.


 


25.11       Counterparts.  The Notice may be executed in counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.


 


	
   

  	
  ADOBE
  SYSTEMS INCORPORATED

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Murray
  J. Demo

  
	
   

  	
  Title:

  	
  Senior
  Vice President, Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  345
  Park Avenue

  San Jose, CA 95110-2704

  



 


 


21

















 


The Participant
represents that the Participant is familiar with the terms and provisions of
this Agreement and hereby accepts the Award subject to all of the terms and
provisions thereof.  The Participant
hereby agrees to accept as binding, conclusive and final all decisions or
interpretations of the Committee upon any questions arising under this
Agreement.


 


	
   

  	
   

  	
   

  	
  PARTICIPANT

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  	
   

  



 


 


 


 


 


 


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