Document:

Exhibit 10.2

 

ADOBE SYSTEMS INCORPORATED

EXECUTIVE SEVERANCE PLAN

IN THE
EVENT OF A CHANGE OF CONTROL

 

Adobe Systems
Incorporated, a Delaware corporation (the “Company”) has adopted this Executive
Severance Plan (the “Plan”), effective as of December 12, 2006, for the benefit of certain key employees
of the Participating Company Group.  The
Plan was amended effective January 24, 2008 for compliance with Code Section 409A,
and amended effective February 11, 2008 to update the treatment of
performance awards.

 

The Company considers it essential to the best
interests of its stockholders to take reasonable steps to retain its key
management personnel.  Further, the Board
of Directors of the Company (the “Board”) recognizes that the uncertainty and
questions which might arise among management in the context of a Change of
Control of the Company could result in the departure or distraction of
management personnel to the detriment of the Company and its stockholders.

 

The Board has determined, therefore, that appropriate
steps should be taken to reinforce and encourage the continued attention and
dedication of its members of management of the Company to their assigned duties
without distraction in the face of potentially disturbing circumstances arising
from any possible Change of Control of the Company.

 

The Company hereby adopts this Executive Severance
Plan In the Event of a Change of Control for the benefit of its employees who
are eligible as provided in the Plan.

 

Section 1.               Definitions.

 

1.1           “Accounting Firm” shall mean
KPMG LLP or, if such firm is unable or unwilling to perform the calculations
required under this Plan, such other national accounting firm as shall be
designated by agreement between the Participant to whom Section 4.1
applies and the Company.

 

1.2           “Actual Award” shall have the
meaning in the applicable Performance Share Program, as amended by Section 3.4
below.

 

1.3           “Base Salary” means the
Participant’s annual base salary as in effect during the last regularly
scheduled payroll period immediately preceding such Participant’s Date of
Termination.  Base Salary does not
include any bonuses, commissions, fringe benefits, overtime, car allowances,
other irregular payments or any other compensation except base salary.

 

1.4           “Cause” shall mean (a) with
respect to Group I Participants (i) felony conviction; or (ii) willful
disclosure of material trade secrets or other material confidential information
related to the business of a Participating Company; or (iii) willful and
continued failure substantially to perform the same duties as in effect prior
to the Change of Control for the Participating Company (other than any such
failure resulting from physical or mental incapacity or any actual or
anticipated failure resulting from a resignation for Good Reason) after a
written

 

 

demand for substantial performance is delivered by the Chief Executive
Officer or the President of the Company, which demand identifies the specific
actions which the Chief Executive Officer or the President of the Company
believes constitute willful and continued failure substantially to perform
duties, and which performance is not substantially corrected within ten (10) days
of receipt of such demand.  For purposes
of the previous sentence, no act or failure to act shall be deemed “willful”
unless done, or omitted to be done, with willful malfeasance or gross
negligence and without reasonable belief that action or omission was not
materially adverse to the best interest of the Participating Company Group; and
(b) with respect to Group II Participants (i) theft, dishonesty or
falsification of any employment or Participating Company Group records, (ii) improper
disclosure of a Participating Company’s confidential or proprietary
information, (iii) any intentional act by such Participant which has a
material detrimental effect on the Participating Company Group’s reputation or
business, (iv) failure to perform any reasonably assigned duties, which
failure is not cured with in thirty (30) days following written notice of such
failure from the Participating Company, (v) gross misconduct or (vi) felony
conviction.

 

1.5           “Certification Date” shall
have the meaning set forth in the applicable Performance Share Program.

 

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

 

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

 

(b)           during any period of two (2) consecutive
years (not including any period prior to the Effective Date), individuals who
at the beginning of such period constituted the Board and any new directors,
whose election by the Board or nomination for election by the Company’s
stockholders was approved by a vote of at least three-fourths (3/4ths) of the
directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved (the “Incumbent Directors”), cease
for any reason to constitute a majority thereof;

 

(c)           there occurs a reorganization, merger,
consolidation or other corporate transaction involving the Company (a “Transaction”), in each case with
respect to which the stockholders of the Company immediately prior to such
Transaction do not, immediately after the Transaction, own securities representing
more than 50% of the combined

 

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voting power of the Company, a parent of the Company or other
corporation resulting from such Transaction (counting, for this purpose, only
those securities held by the Company’s stockholders immediately after the
Transaction that were received in exchange for, or represent their continuing
ownership of, securities of the Company held by them immediately prior to the
Transaction);

 

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

 

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

 

1.7           “Change of Control Date” shall
mean the date on which the Change of Control occurs.  Notwithstanding the first sentence of this
definition, if a Participant’s employment with the Participating Company Group
terminates prior to the Change of Control Date and it is reasonably demonstrated
that such termination (a) was at the request of the third party who has
taken steps reasonably calculated to effect the Change of Control or (b) otherwise
arose in connection with or in anticipation of the Change of Control, then “Change
of Control Date” shall mean the date immediately prior to the date of such
Participant’s termination of employment.

 

1.8           “Code” shall mean the Internal
Revenue Code of 1986, as amended, and any successor provisions thereto.

 

1.9           “Committee” means the
Executive Severance Plan Administrative Committee responsible for administering
the Plan as provided in Section 5.

 

1.10         “Common Stock” shall mean the
common stock of the Company.

 

1.11         “Company”
means Adobe Systems Incorporated, a Delaware Corporation, and, except in determining
under Section 1.4 hereof whether or not any Change of Control has
occurred, shall include any successor to its business and/or assets.

 

1.12         “Date of Termination” means the
date of a Participant’s termination of employment with the Participating Company
Group as determined in accordance with Section 3.7.

 

1.13         “Disability” shall mean a
Participant’s (a) incapacity due to physical or mental illness which
causes such Participant’s absence from the full-time performance of his or her
duties with the Participating Company Group for six (6) consecutive months
and (b) such Participant’s failure to return to full-time performance of
his or her duties for the Participating Company Group within thirty (30) days
after written Notice of Termination due to Disability is given to a
Participant.  Any question as to the
existence of Disability upon which a Participant and the Participating Company
Group cannot agree shall be determined by a qualified independent physician selected
by the Participant (or, if such Participant is not able to select a physician,
such selection shall be made by any adult member of the Participant’s immediate

 

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family), and approved by the Participating Company Group.  The determination of such physician made in
writing to the Participating Company Group shall be final and conclusive for
all purposes of this Plan.

 

1.14         “Effective Date” means December 12, 2006.

 

1.15         “Equity Awards” shall mean
options, stock appreciation rights, stock purchase rights, restricted stock,
stock bonuses and other awards which consist of, or relate to, equity
securities of the Company, other than Performance Awards, in each case which
have been granted to a Participant under the Equity Plans.  For purposes of this Plan, Equity Awards
shall also include any shares of common stock or other securities issued
pursuant to the terms of an Equity Award.

 

1.16         “Equity Plans” shall mean the
Adobe Systems Incorporated 1994 Stock Option Plan, the Adobe Systems
Incorporated 1994 Amended Performance and Restricted Stock Plan, the Adobe
Systems Incorporated 1999 Nonstatutory Stock Option Plan, the Adobe Systems
Incorporated 2003 Equity Incentive Plan, the Adobe Systems Incorporated 2005
Special Purpose Equity Incentive Plan, and any other equity-based incentive
plan or arrangement adopted or assumed by the Company, and any future
equity-based incentive plan or arrangement adopted or assumed by the Company,
but shall not include the Adobe Systems Incorporated 1997 Employee Stock Purchase
Plan or any other plan intended to be qualified under Section 423 of the
Code.

 

1.17         “ERISA” means the Employee
Retirement Income Security Act of 1974, as amended.

 

1.18         “Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended, and any successor provisions
thereto.

 

1.19         “Good Reason” shall mean a
Participant’s resignation of employment during the Term as a result of any of
the following:

 

(a)           A meaningful and detrimental
alteration in such Participant’s position, titles, or the nature or status of
responsibilities (including reporting responsibilities) from those in effect
immediately prior to the Change of Control Date;

 

(b)           A
reduction by the Participating Company Group in such Participant’s Base Salary
as in effect immediately prior to the Change of Control Date or as the same may
be increased from time to time thereafter; a failure by the Participating
Company Group to increase such Participant’s salary at a rate commensurate with
that of other similarly situated  key executives
of the Participating Company Group; or a reduction in the target incentive
opportunity percentage used to determine such Participant’s Target Bonus below
the percentage in effect immediately prior to the Change of Control Date;

 

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(c)           The relocation of the office of the
Participating Company where such Participant is primarily employed immediately
prior to the Change of Control Date (the “COC Location”)
to a location which is more than fifty (50) miles away from the COC Location or
the Participating Company’s requiring such Participant to be based more than
fifty (50) miles away from the COC Location (except for required travel on the
Participating Company’s business to an extent substantially consistent with the
Participant’s customary business travel obligations in the ordinary course of
business prior to the Change of Control Date);

 

(d)           The failure by the Participating
Company Group to continue in effect any compensation plan in which such
Participant participated prior to the Change of Control Date or made available
to such Participant after the Change of Control Date, unless an equitable
arrangement (embodied in an ongoing substitute or alternative plan) has been
made with respect to such plan in connection with the Change of Control, or the
failure by the Participating Company Group to continue such Participant’s
participation therein on at least as favorable a basis, both in terms of the
amount of benefits provided and the level of participation relative to other
participants, as existed on the Change of Control Date;

 

(e)           The failure by the Participating
Company Group to continue to provide such Participant with benefits at least as
favorable in the aggregate to those enjoyed by such Participant under the
Participating Company Group’s retirement, savings, life insurance, medical,
health and accident, disability, and fringe benefit plans and programs in which
such Participant was participating in immediately prior to the Change of
Control Date; or the failure by the Participating Company Group to provide such
Participant with the number of paid vacation days to which he or she was
entitled on the basis of years of service with the Participating Company Group
in accordance with the Participating Company Group’s normal vacation policy in
effect immediately prior to the Change of Control;

 

(f)            The failure by the Participating
Company Group to pay or provide to such Participant with any material item of
compensation or benefits promptly when due;

 

(g)           The failure of the Participating
Company Group to obtain an agreement from any successor to assume and agree to
perform the obligations of this Plan, as contemplated in Section 9.1
hereof or, if the business for which such Participant’s services are
principally performed is sold at any time after a Change of Control, the
failure of the Participating Company Group to obtain such an agreement from the
purchaser of such business;

 

(h)           A material breach by
the Participating Company Group of the provisions of this Plan;

 

 provided, however, that an event described above in clause (a), (b),
(d), (e), (f) or (h) shall not constitute Good Reason unless it is
communicated by such Participant to the Company in writing and is not corrected
by the Company in a manner which is reasonably satisfactory to such Participant
(including full retroactive correction with respect to any monetary matter)
within 10 days of the Company’s receipt of such written notice.

 

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1.19         “Group I Participant” shall mean
each senior management employee of a Participating Company who (i) is on
the U.S. payroll, (ii) is not a party to any other retention and/or
severance agreement with the Participating Company Group that is not otherwise
waived in accordance with Section 3.10, and (iii) on the Change of
Control Date, is classified as a Vice President (or any more senior role) of a
Participating Company.

 

1.20         “Group II Participant” shall
mean each senior management-level employee of a Participating Company who (i) is
on the U.S. payroll, (ii) is not a party to any other retention and/or
severance agreement with the Participating Company Group that is not otherwise
waived in accordance with Section 3.10, and (iii) who on the Change
of Control Date, is classified as a Director, Senior Director, or such other
position, which is determined by the Company prior to the Change of
Control  as equivalent thereto.

 

1.21         “Involuntary Termination” shall
mean (i) a Participant’s involuntary termination of employment with the Participating
Company Group during the Term other than for death, Disability or Cause or (ii) a
Participant’s resignation of employment with the Participating Company Group
during the Term for Good Reason.

 

1.22         “Notice of Termination” means
the notice specified in Section 3.7.

 

1.23         “Participating Company Group”
means the Company and any present or future United States parent and/or United
States direct or indirect subsidiary corporations of the Company that have been
designated by the Board as a “Participating Company” for purposes of this Plan
(all of which along with the Company being individually referred to as a “Participating
Company” and collectively referred to as the “Participating Company Group”).  For purposes of this Plan, a parent or
subsidiary corporation shall be defined in Sections 424(e) and 424(f) of
the Code and shall include entities related to the Company by similar ownership
levels that are not corporations.

 

1.24         “Participant” shall mean each
Group I Participant and each Group II Participant.

 

1.25         “Performance Awards” shall have
the meaning set forth in the applicable Equity Plan, and shall include awards
of performance-based restricted stock, performance-based restricted stock units
and performance-based cash awards.

 

1.26         “Performance Period” shall have
the meaning set forth in the applicable Performance Share Program and
underlying Equity Plan.

 

1.27         “Performance Share Program”
shall mean the specific terms of Performance Awards adopted from time to time
by the Company with respect to a specified Performance Period.

 

1.28         “Plan” means this Adobe Systems
Incorporated Executive Severance Plan In the Event of a Change of Control.

 

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1.29         “Plan Year” means the calendar
year and the last day of such year is December 31.

 

1.30         “Reference Bonus” shall mean the
greater of (a) the Target Bonus applicable to a Participant for the year
in which such Participant’s Involuntary Termination occurs or (b) the
highest Target  Bonus applicable to such
Participant in any of the three years ending prior to the Change of Control
Date.

 

1.31         “Reference Salary” shall mean
the greater of (a) the annual rate of a Participant’s Base Salary from the
Participating Company Group in effect immediately prior to the date of such
Participant’s Involuntary Termination or (b) the annual rate of a
Participant’s Base Salary from the Participating Company Group in effect at any
point during the three-year period ending on the Change of Control Date.

 

1.32         “Regulations” shall mean the
proposed, temporary and final regulations under Section 280G of the Code
or any successor provision thereto.

 

1.33         “Severance Benefits” means those
benefits provided to a Participant under this Plan on account of a Change of
Control, as determined in accordance with Section 3.2, 3.3, 3.4 and 3.5
after the execution of a release of claims as required by Section 10.

 

1.34         “Severance Multiple” shall mean (a) with
respect to Group I Participants, the sum of (i) two (2) plus (ii) one
twelfth (1/12th) for each completed year of service with the
Participating Company Group (not in excess of twelve (12) years), and (b) with
respect to Group II Participants, the sum of (i) one (1) plus (ii) one
twelfth (1/12th) for each completed year of service with the Participating
Company Group (not in excess of six (6) years).

 

1.35         “Target Bonus” shall mean an
amount equal to (i) a Participant’s Base Salary multiplied by such
Participant’s target incentive opportunity percentage under the Participating
Company’s Annual Incentive Plan and Profit Sharing Plan (or any successor plans
then in effect), and (ii)  target commissions.

 

1.36         “Term” shall mean the period of
a Participant’s employment that commences on the Change of Control Date and
shall continue until the second anniversary of the Change of Control Date.

 

Section 2.               Employment
During the Term.  During the Term,
the following terms and conditions shall apply to a Participant’s employment
with the Participating Company Group:

 

2.1           Titles; Reporting and Duties.  A Participant’s position, title, nature and
status of responsibilities and reporting obligations shall be no less favorable
than those that such Participant enjoyed immediately prior to the Change of
Control Date.

 

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2.2           Base Salary and Bonus.  A Participant’s Base Salary and annual bonus
opportunity may not be reduced, and such Participant’s Base Salary shall be
periodically reviewed and increased in the manner commensurate with increases
awarded to other similarly situated employees of the Participating Company
Group.

 

2.3           Incentive Compensation.  A Participant shall be eligible to
participate in each long-term incentive plan or arrangement established by the
Participating Company Group for its employees at such Participant’s level of
seniority in accordance with the terms and provisions of such plan or
arrangement and at a level consistent with the Participating Company Group’s
practices applicable to each Participant prior to the Change of Control Date.

 

2.4           Benefits.  A Participant shall be eligible to
participate in all retirement, welfare and fringe benefit plans and
arrangements that the Participating Company Group provides to its employees in
accordance with the terms of such plans and arrangements, which shall be no
less favorable to such Participant, in the aggregate, than the terms and
provisions available to other similarly situated employees of the Participating
Company Group.

 

2.5           Location.  A Participant shall continue to be employed
at a business location in the metropolitan area in which such Participant was
employed prior to the Change of Control Date and the amount of time that such
Participant is required to travel for business purposes will not be increased
in any significant respect from the amount of business travel required of such
Participant prior to the Change of Control Date.

 

Section 3.               Severance
Benefits.  In the event of a
Participant’s Involuntary Termination, the terminated Participant shall be
entitled to the following:

 

3.1           Payment of Wages and Accrued
Vacation.  The Company shall pay to
such terminated Participant within five (5) days of the date of such
Involuntary Termination the full amount of any earned but unpaid Base Salary
through the Date of Termination at the rate in effect at the time of the Notice
of Termination, plus a cash payment (calculated on the basis of such
Participant’s Reference Salary) for all unused vacation time which such
Participant may have accrued as of the Date of Termination.

 

3.2           Payment of Cash
Severance.  Subject to execution of a
release of claims as described in Section 10 below, the terminated
Participant will receive the following cash benefits:

 

(a)           The Company shall pay to such
terminated Participant a pro rata portion (based on the number of days served
in the applicable bonus period) of the Participant’s Target Bonus for the year
in which such Involuntary Termination occurs, calculated on the assumption that
all performance targets have been or will be achieved at target levels, plus
the full amount of any bonus that the Participant earned for the year prior to
the year in which the Involuntary Termination occurs based on actual Company
and individual performance, to the extent such bonus has not been paid prior to
the Date of Termination.  Except as
otherwise provided in Sections 3.11 and 4.1 below, these cash payments will be
made in a lump sum on the day following the Release Effective Date.

 

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(b)           In addition, the Company shall pay to
such terminated Participant an amount equal to the product of (a) the sum
of such terminated Participant’s Reference Salary and Reference Bonus,
multiplied by (b) such terminated Participant’s Severance Multiple.  This severance payment shall be in lieu of
any other cash severance payments which such terminated Participant is entitled
to receive under any other notice or severance pay and/or retention plan or
arrangement sponsored by any Participating Company.  Except as otherwise provided in Sections 3.11
and 4.1 below, these cash payments will be made in a lump sum on the day
following the Release Effective Date.

 

3.3           Vesting and Exercise of Equity
Awards.  Subject to execution of a
release of claims as described in Section 10 below, and notwithstanding
anything to the contrary contained in an applicable Equity Award agreement, all
Equity Awards held by a terminated Participant shall vest in full and, as
applicable, shall become fully exercisable, as of the Date of Termination,
except as otherwise provided in Sections 3.11 and 4.1 below.  Notwithstanding anything in this Plan to the
contrary, in no event shall the vesting and exercisability provisions
applicable to a terminated Participant under the terms of an Equity Award be
less favorable to such Participant than the terms and provisions of such awards
in effect on the Change of Control Date.

 

3.4           Vesting of Performance Awards.  Subject to execution of a release of claims
as described in Section 10 below, and notwithstanding anything to the
contrary contained in an applicable Performance Award agreement, and except as
otherwise provided in Sections 3.11 and 4.1 below, with respect to Performance
Awards, the Actual Award credited to the terminated Participant under the
Performance Share Program shall vest in full as of the Date of Termination.

 

Notwithstanding anything in this Plan to the contrary,
in no event shall the vesting and exercisability provisions applicable to a
terminated Participant under the terms of a Performance Awards agreement be
less favorable to such Participant than the terms and provisions of such awards
in effect on the Change of Control Date.

 

3.5           Benefits Continuation.  Subject to execution of a release of claims
as described in Section 10 below, and subject to the terminated
Participant and/or his or her eligible dependents electing continued medical
insurance coverage in accordance with the applicable provisions of state and
federal law (commonly referred to as “COBRA”),
the Company shall pay the terminated Participant’s COBRA premiums for the duration
of such COBRA coverage, or for the period of years equal to the Participant’s
Severance Multiple, whichever is less. 
If the terminated Participant’s medical coverage immediately prior to
the Date of Termination included the terminated Participant’s dependents, the
Company paid COBRA premiums shall include the premiums necessary for such
dependents as have elected COBRA coverage. 
Notwithstanding the above, in the event the terminated Participant
becomes covered under another employer’s group health plan (other than a plan
which imposes a preexisting condition exclusion unless the preexisting
condition exclusion does not apply) or otherwise ceases to be eligible for
COBRA during the period provided in this Section 3.5, the Company shall
cease payment of the COBRA premiums.

 

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3.6           Other Benefit Plans.  A terminated Participant’s participation and
rights in other benefit plans as may be provided by the Participating Company
Group at the time of his/her Involuntary Termination shall be governed solely
by the terms and conditions of such plans, if any.

 

3.7           Date and Notice of Termination.  Any termination of a Participant’s employment
by a Participating Company or by such Participant during the Term shall be communicated
by a notice of termination to the other party hereto (the “Notice
of Termination”).  The
Notice of Termination shall indicate the specific termination provision in this
Plan relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Participant’s employment
under the provision so indicated.  The
date of a Participant’s termination of employment with the Participating
Company Group shall be determined as follows: 
(i) if employment is terminated by the Participating Company Group
in an Involuntary Termination, five (5) days after the date the Notice of
Termination is provided by the Participating Company Group, (ii) if
employment is terminated by the Participating Company Group for Cause, the
later of the date specified in the Notice of Termination or ten (10) days
following the date such notice is received by the Participant, and (iii) if
the basis of a Participant’s Involuntary Termination is such Participant’s
resignation for Good Reason, the Date of Termination shall be ten (10) days
after the date such Participant’s Notice of Termination is received by the
Company.

 

3.8           No Mitigation or Offset.  A terminated Participant shall not be
required to mitigate the amount of any payment provided for in this Plan by
seeking other employment or otherwise, nor shall the amount of any payment or
benefit provided for in this Plan be reduced (except as set forth in Section 3.5
above) by any compensation earned by such a terminated Participant as the
result of employment by another employer or by retirement benefits paid by the
Participating Company Group or another employer after the Date of Termination
or otherwise.

 

3.9           Withholding.  Amounts paid to a Participant hereunder shall
be subject to all applicable federal, state and local withholding taxes.

 

3.10         Waiver of Any Other Participating
Company Retention/Severance Agreement. 
A terminated Participant may elect, in his or her sole discretion, to
waive each and every prior retention and/or severance agreement entered into
between a Participating Company and such terminated Participant in order to
participate and receive the Severance Benefits provided under this Plan. Such
waiver shall be in writing in such form as may reasonably be specified by the
Committee and shall be filed with the Company in accordance with such rules and
procedures as may be reasonably established by the Committee.

 

3.11         Application of Section 409A.  Notwithstanding any other provision of this
Plan, to the extent that (i) one or more of the payments or benefits
received or to be received by a Participant pursuant to this Plan would
constitute deferred compensation subject to the requirements of Code Section 409A,
and (ii) the Participant is a “specified employee” within the meaning of
Code Section 409A, then such payment or benefit (or portion thereof) will
be delayed

 

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until
the earliest date following the Participant’s “separation from service” with
the Participating Company Group within the meaning of Code Section 409A on
which the Company can provide such payment or benefit to the Participant
without the Participant’s incurrence of any additional tax or interest pursuant
to Code Section 409A,
with all remaining payments or benefits due thereafter occurring in accordance
with the original schedule.  In
addition, this Plan and the payments and benefits to be provided hereunder are
intended to comply in all respects with the applicable provisions of Code Section 409A.

 

Section 4.               Limitation
on Payment of Benefits.

 

4.1           Parachute Payments.  In the event that it is determined by the
Accounting Firm that any amount payable to a Participant under this Plan, alone
or when aggregated with any other amount payable or benefit provided to such
Participant pursuant to any other plan or arrangement of the Participating
Company Group, would constitute an “excess parachute payment” within the
meaning of Section 280G of the Code, then notwithstanding the other
provisions of this Plan, the amounts payable will not exceed the amount which
produces the greatest after-tax benefit to the Participant.  For purposes of the foregoing, the greatest
after-tax benefit will be determined within thirty (30) days of the occurrence
of the event giving rise to such payment to the Participant.  The Company shall request a determination in
writing by the Accounting Firm of whether the full amount of the payments to
the Participant, or a lesser amount, will result in the greatest after-tax
benefit to the Participant.  As soon as
practicable thereafter, the Accounting Firm shall determine and report to the
Company and the Participant the amount of such payments and benefits which
would produce the greatest after-tax benefit to the Participant.  For the purposes of such determination, the
Accounting Firm 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 Accounting Firm such information and documents as the Accounting Firm
may reasonably request in order to make their required determination.  The Company shall bear all fees and expenses
the Accounting Firm may reasonably charge in connection with its services
contemplated by this Section.  If a
reduced amount of the payments will give rise to the greatest after tax
benefit, the reduction in the payments and benefits shall occur in the
following order unless the Participant elects in writing a different order
prior to the last day of the year preceding the date on which the event that
triggers the payment occurs: (i) reduction of cash payments; (ii) cancellation
of accelerated vesting of equity awards (including Performance Awards) other
than stock options; (iii) cancellation of accelerated vesting of stock
options; and (iv) reduction of other benefits paid to the
Participant.  In the event that
acceleration of compensation from the Participant’s equity awards (including
Performance Awards) is to be reduced, such acceleration of vesting shall be
canceled in the reverse order of the date of grant unless the Participant
elects in writing a different order for cancellation prior to the last day of
the year preceding the date on which the event that triggers the payment
occurs.

 

4.2           Non-Duplication of Benefits.  Notwithstanding any other provision in the
Plan to the contrary, the benefits provided hereunder shall be in lieu of any
other severance plan and/or retention agreement benefits provided by any
Participating Company and the Severance Benefits and other benefits provided
under this Plan shall be reduced by any severance paid or provided to a
Participant by a Participating Company under any other plan or arrangement.

 

11

 

4.3           Indebtedness of Participant.  If a Participant is indebted to the
Participating Company Group at his or her Date of Termination, the Company
reserves the right to offset any benefits under this Plan by the amount of such
indebtedness.

 

Section 5.               Plan
Administration, Amendment and Termination.

 

5.1           Plan Administrative Committee.

 

(a)           Administration by the Committee.  The Plan shall be administered by the
Committee.

 

(b)           Committee Members.  Except as otherwise provided in Section 5.1(c) below,
the “Committee” shall be composed of those
individuals at the Company who hold the titles of  Vice President and General Counsel, and Vice
President Human Resources, or titles functionally equivalent thereto, and
another employee of the Company as shall be appointed by the Board.  The designation of an individual as holding
such title or position shall constitute automatic appointment to the Committee
and the resignation or other termination of employment or change to a different
position by a Committee member shall constitute automatic resignation from the
Committee.

 

(c)           Notwithstanding the
foregoing, upon a Change of Control, a majority of the Committee Members shall
be comprised of persons who were members of the Committee prior to the Change
of Control or who are elected to serve as additional Adobe Members as provided
below (the “Adobe Members”).  This shall be accomplished by retaining a
majority of those persons who were Committee Members prior to the Change of
Control, regardless of whether such members’ job titles have changed or they would
otherwise be deemed to have automatically resigned their membership on the
Committee.  In the event that a majority
of the members of the Committee prior to the Change of Control are unwilling or
unable to continue to serve as members of the Committee, the members of the
Committee shall, by majority vote, elect sufficient additional Adobe Members,
so that a majority of the Committee Members are Adobe Members.  Such additional Adobe Members shall be
persons who were employed by the Company prior to the Change of Control.

 

(d)           The Committee
Members shall not receive compensation for their services on the
Committee.  The Participating Company
Group shall indemnify and hold harmless the Committee Members from and against
all liabilities, claims, demands and costs, including reasonable attorneys’
fees and expenses of legal proceedings, incurred by the Committee which arise
as a result of membership on the Committee.

 

12

 

5.2           Committee Powers and
Responsibilities.  The Committee
shall have all powers necessary to enable it properly to carry out its duties
with respect to the complete control of the administration of the Plan.  Not in limitation, but in amplification of
the foregoing, the Committee shall have the power and authority in its
discretion to:

 

(a)           Construe the Plan to
determine all questions that shall arise as to interpretations of the Plan’s
provisions, including determination of which individuals are eligible for
Severance Benefits, the amount of Severance Benefits to which any employee may
be entitled, the determination of which type of Participant any individual is
(i.e., Group I Participant or Group II Participant) and all other matters
pertaining to the Plan;

 

(b)           Adopt amendments to
the Plan document which are deemed necessary or desirable bring these documents
into compliance with all applicable laws and regulations, including but not
limited to Code Section 409A and the guidance thereunder; and

 

(c)           Establish procedures
for determining who the Adobe Members of the Committee shall be after a Change
of Control and/or for electing additional Adobe Members of the Committee
pursuant to Section 5.1.  For
purposes of this Section 5.2(c), only those persons who were members of
the Committee prior to the Change of Control shall be authorized to vote.

 

5.3           Decisions of the Committee.  Decisions of the Committee made in good faith
upon any matter within the scope of its authority shall be final, conclusive
and binding upon all persons, including Participants and their legal
representatives.  Any discretion granted
to the Committee shall be exercised in accordance with such rules and
policies as may be established by the Committee from time to time.

 

5.4           Plan Amendment.  The Plan may be amended by the Committee as
provided by Section 5.2(b) and may also be amended by resolution of
the Board of Directors of the Company (i) for the purposes specified in Section 5.2(b),
(ii) to increase the amount and/or type of Severance Benefits provided by
the Plan, and (iii) to extend the Plan termination date as provided in Section 5.5.  Except as otherwise provided in this Section 5.4
the Plan may not be amended prior to its termination, or, in the event the Plan
is extended as provided in this Section 5.4,  the date on which it would have terminated
under Section 5.5 had it not been extended.

 

5.5           Plan Termination.  This Plan shall terminate automatically five (5) years  from the Effective Date unless extended by the Company or
unless a Change of Control shall have occurred prior thereto, in which case the
Plan shall terminate following the later of the date which is at least
twenty-four (24) months after the occurrence of a Change of Control or the
payment of all Severance Benefits due under the Plan.

 

Section 6.               Claims
for Benefits.  Any person who
believes he or she is entitled to benefits under this Plan may submit a claim
for benefits.  The claim must be in
writing and should state the claimant’s reasons for claiming these
benefits.  The claims should be sent to
the Executive Severance Plan Administrative Committee of Adobe Systems
Incorporated.  If the claim is denied, in
whole or in part, written notice of the denial will be provided within ninety
(90) days of initial receipt of the claim. 
Such notice will include an explanation of the factors on which the
denial is based and what, if any, additional information is needed to support
the claim.  Further review of the claim
may be obtained by filing a written request for review.  An individual whose

 

13

 

claim
for benefits is denied may file a request for review with the Committee within
sixty (60) days.  After receiving a
request for review, the Committee will render a final decision within sixty
(60) days, unless circumstances require an extension of an additional sixty
(60) days for the review.  In this case,
the Committee will notify the claimant in writing of the need for an
extension.  The Committee’s decision will
be in writing, setting forth the specific reasons for the decision, as well as
specific references to the Plan provisions upon which the decision is based.

 

Section 7.               Legal
Fees and Expenses.  The Company shall
pay or reimburse a Group I Participant for all costs and expenses (including,
without limitation, court costs and reasonable legal fees and expenses which
reflect common practice with respect to the matters involved) incurred by such
Group I Participant as a result of any bona fide claim, action or proceeding (a) arising
out of such Group I Participant’s termination of employment during the Term, (b) contesting,
disputing or enforcing any right, benefits or obligations under this Plan or (c) arising
out of or challenging the validity, advisability or enforceability of this Plan
or any provision thereof.  The payments
or reimbursements provided for herein shall be paid by the Participating
Company Group promptly (but in no event more than five (5) business days)
following receipt of a written request for payment or reimbursement, as the
case may be.  It is intended that each
installment of payments under this Section 7 is a separate “payment” for
purposes of Section 409A.  For the
avoidance of doubt, it is intended that the payments under this Section 7
satisfy, to the greatest extent possible, the exemptions from the application
of Code Section 409A provided under Treasury Regulation 1.409A-1(b)(11).

 

Section 8.               Miscellaneous.

 

8.1           No Contract of Employment.  Nothing in this Plan shall be construed as
giving any Participant any right to be retained in the employ of the
Participating Company Group or shall affect the terms and conditions of a
Participant’s employment with the Participating Company Group prior to the
commencement of the Term.

 

8.2           ERISA Plan.  This Plan is intended to be (a) an
employee welfare plan as defined in Section 3(1) of ERISA and (b) a
“top-hat” plan maintained for the benefit of a select group of management or
highly compensated employees of the Participating Company Group.

 

8.3           Source of Payments.  All payments provided under this Plan, other
than payments made pursuant to any other Participating Company Group employee
benefit plan which provides otherwise, shall be paid in cash from the general
funds of the Participating Company Group, and no special or separate fund shall
be established, and no other segregation of assets made, to assure
payment.  To the extent that any person
acquires a right to receive payments from the Participating Company Group
hereunder, such right shall be no greater than the right of an unsecured
creditor of the Participating Company Group.

 

8.4           Notice.  For the purpose of this Plan, notices and all
other communications provided for in this Plan shall be in writing and shall be
deemed to have been duly given when delivered or mailed by overnight courier or
United States registered mail, return receipt requested, postage prepaid,
addressed to the Executive Severance Plan Administrative

 

14

 

Committee, Adobe Systems Incorporated, 345 Park Avenue, San Jose,
California 95110-2704, with a copy to the General Counsel of the Company, or to
a Participant at the address set forth in the Participating Company Group’s
payroll records or to such other address as either party may have furnished to
the other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt.

 

8.5           Nonalienation of Benefits.  No benefit under the Plan may be assigned,
transferred, pledged as security for indebtedness or otherwise encumbered by
any Participant or subject to any legal process for the payment of any claim
against a Participant.

 

8.6           Validity.  The invalidity or unenforceability of any
provision of this Plan shall not affect the validity or enforceability of any
other provision of this Plan, which shall remain in full force and effect.

 

8.7           Headings.  The headings contained in this Plan are
intended solely for convenience of reference and shall not affect the rights of
the parties to this Plan.

 

8.8           Governing Law.  This Plan shall be governed by and construed
in accordance with the laws of the State of California to the extent such laws
are not preempted by ERISA.

 

Section 9.               Successors;
Binding Agreement.

 

9.1           Assumption by Successor.  The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business or assets of the Company expressly
to assume and to agree to perform the obligations under this Plan in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place; provided, however, that no such assumption shall relieve the Company
of its obligations hereunder.  As used in
this Section 9, the “Company” shall include the Company as defined in Section 1.9
and any successor to its business and/or assets which assumes and agrees to
perform the obligations arising under this Plan by operation of law or
otherwise.

 

9.2           Enforceability; Beneficiaries.  This Plan shall be binding upon and inure to
the benefit of each Participant (and such Participant’s personal
representatives and heirs) and the Company and any organization which succeeds
to substantially all of the business or assets of the Company, whether by means
of merger, consolidation, acquisition of all or substantially all of the assets
of the Company or otherwise, including, without limitation, as a result of a
Change of Control or by operation of law. 
This Plan shall inure to the benefit of and be enforceable by each
Participant’ personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.  If a Participant should die while any amount
would still be payable hereunder if such Participant had continued to live, all
such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Plan to such Participant’s devisee, legatee or other
designee or, if there is no such designee, to such Participant’s estate.

 

15

 

Section 10.             Release
of Claims.  As a condition to the
receipt of Severance Benefits, each Participant must execute and allow to
become effective a release of claims in a form satisfactory to the Committee,
with such execution occurring not prior to the Date of Termination and not
later than 45 days after the Participant’s receipt thereof.  The date on which such release becomes
effective is the “Release Effective Date”. 
No Severance Benefits shall be paid to a Participant under this Plan
prior to the Release Effective Date.  The
form of release shall not cause the Participant to waive or release any claims
or rights a Participant may have to be indemnified by the Company under
applicable law or the terms of any then-effective indemnification agreement or
obligation.

 

	
   

  	
   

  	
  Adobe Systems
  Incorporated

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:
  February 11, 2008

  	
  By:   

  	
   /s/ Karen Cottle

  	
   

  
	
   

  	
   

  	
  Karen Cottle

  
	
   

  	
   

  	
  Senior Vice
  President, General Counsel and Secretary

  
					

 

16Exhibit 10.1

 

[FiberTower
Letterhead]

 

February 11, 2008

 

 

Thomas A. Scott

100 Clifford Terrace

San Francisco, California
94117

 

Re: Special Retention
Compensation Package

 

Dear Tom,

 

FiberTower Corporation (“we”
or the “Company”) is pleased to confirm this offer to you of the following
Special Retention Compensation Package. 
If you accept this offer, we agree to:

 

	
   

  	
  (i)

  	
  pay
  you a cash retention bonus of $666,667 on January 1, 2010 if you remain
  employed by the Company as Chief Financial Officer on such date;

  
	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  pay
  you an additional cash retention bonus of $333,333 on January 1, 2011 if
  you continue to remain so employed on such date; and

  
	
   

  	
   

  	
   

  
	
   

  	
  (iii)

  	
  make
  a restricted stock grant to you under the Amended and Restated FiberTower
  Corporation Stock Incentive Plan within ten (10) business days of your
  acceptance of this Special Retention Compensation Package of 250,000 shares
  of common stock of the Company, which shall vest as to 166,667 shares on
  January 1, 2010 if you remain employed by the Company as Chief Financial
  Officer on such date and shall vest as to the remaining 83,333 shares on
  January 1, 2011 if you remain so employed on such date.

  

 

If on or before January 1,
2011, (a) a Change of Control occurs, (b) we terminate your
employment as Chief Financial Officer of the Company without Cause, or (c) you
terminate your employment as Chief Financial Officer of the Company with Good
Reason, any amounts not yet paid to you under clauses (i) and (ii) above
shall become immediately due and payable, and any unvested shares of restricted
stock granted pursuant to clause (iii) above shall become fully vested. In
the event of your death or disability prior to January 1, 2011, (a) within
10 business days after your death or the determination by the Company of your
total disability, the Company will pay you or your estate an amount equal to (A) the
product of (x) the sum of the payments under clauses (i) and (ii) above,
multiplied by (y) the Pro Rata Factor, minus (B) any amounts
previously paid under clauses (i) and (ii) above, and (b) a
portion of the restricted stock granted to you under clause (iii) above
will vest as of the date of your death or the determination by the Company of
your total disability, which portion shall equal (A) the total number of
shares of restricted stock granted to you under clause (iii) above
multiplied by the Pro Rata Factor, minus (B) the number of shares granted
to you under clause (iii) above that have previously vested.  The “Pro Rata Factor” shall equal a fraction,
the numerator of which is the number of days that have elapsed since January 1,
2008 to the date of your death or the Company’s determination of your total
disability, and the denominator of which is the number of days from January 1,
2008 to January 1, 2011.

 

 

 

 

For purposes of this Special
Retention Compensation Package, “Change of Control” means the occurrence of any
of the following events: (i) the sale or transfer of all or substantially
all of the Company’s assets, (ii) a reorganization, recapitalization,
consolidation or merger where the voting securities of the Company outstanding
immediately preceding such transaction, or the voting securities issued in
exchange for or with respect to the voting securities of the Company
outstanding immediately preceding such transaction, represent 50% or less of
the voting power of the surviving entity following the transaction; or (iii) a
transaction or series of related transactions which results in the acquisition
of more than 50% of the Company’s outstanding voting power by a single person
or entity or by a group of persons and/or entities acting in concert; provided,
that a transaction principally for the purpose of reorganizing the Company into
a holding company structure or reincorporating the Company in another jurisdiction
shall not constitute a “Change of Control.” Notwithstanding the foregoing, to
the extent necessary to comply with Section 409A, in the case of any
payment under this Special Retention Compensation Package that in the
determination of the Company would be considered “nonqualified deferred
compensation” subject to Section 409A and as to which, in the
determination of the Company, the requirements of Section 409A(a)(2)(A)(v) would
apply, an event or occurrence described above shall be considered a “Change of
Control” only if it also constitutes a change in ownership or effective control
of the Company, or a change in ownership of the Company’s assets, described in Section 409A(a)(2)(A)(v).

 

For purposes of this Special
Retention Compensation Package, “Cause” means the occurrence of any of the
following events: (a) your unauthorized use or disclosure of the Company’s
confidential information or trade secrets, or the material misappropriation of
property belonging to the Company; (b) your material breach of any
contract between the Company and you; (c) your material breach of any
policy of the Company applicable to employees of the Company generally (such as
the Company’s Procedures and Guidelines Governing Securities Trades by Company
Personnel or Amended and Restated Corporate Code of Business Conduct and
Ethics); (d) your failure to perform (other than by reason of disability),
or serious negligence in the performance of, your material duties and
responsibilities to the Company; (e) fraud or embezzlement or other
dishonesty which is material (monetarily or otherwise) with respect to the
Company; or (f) an indictment, conviction or plea of nolo contendere to a
felony or other crime involving moral turpitude.

 

For purposes of this Special
Retention Compensation Package, “Good Reason” means the occurrence of any of
the following events: (a) failure of the Company to continue you in the
position (and with material duties and responsibilities consistent with such
position), and with the title of Chief Financial Officer; (b) failure of
the Company to pay to you any material portion of the amounts required
hereunder or any other compensation agreed by the Company to be paid to you,
excluding any failure which is cured within ten (10) business days
following notice from you to the Company specifying in detail the nature of
such failure; or (c) permanent relocation of your principal place of work
to a location more than fifty (50) miles from the city of San Francisco,
California.  For clarity, you agree that
failure of the Company to continue you in the position (and with duties and
responsibilities of such position) and with the title of Co-President will not
constitute Good Reason.

 

 

 

2

 

For purposes of this Special
Retention Compensation Package, “disability” means your inability, due to a
medically documented physical or mental condition, to perform your essential
job duties, with or without reasonable accomodation, for a continuous period of
six (6) months.  The Company may, at
its discretion and cost, require that you submit to an independent medical
evaluation to confirm your condition and resulting inability to perform job
duties before you are recognized as disabled.

 

All compensation under this
Special Retention Compensation Package is subject to applicable tax withholding
requirements, and the Company may withhold from amounts otherwise payable
hereunder such amounts or require you to pay to the Company the amount of
applicable withholding taxes. In addition, you are solely responsible for all
taxes that result from your receipt of benefits hereunder.

 

To the extent that any
payment under this Special Retention Compensation Package is deemed to be
deferred compensation subject to the requirements of section 409A of the Code,
this Special Retention Compensation Package shall be operated in compliance
with the applicable requirements of section 409A of the Code and its
corresponding regulations and related guidance with respect to subject payment.  If you are a “key employee,” as defined in
section 416(i) of the Code (without regard to paragraph 5 thereof), except
to the extent permitted under section 409A of the Code, no benefit or payment
that is subject to section 409A of the Code (after taking into account all applicable
exceptions to section 409A of the Code, including but not limited to the
exceptions for short-term deferrals and for “separation pay only upon an
involuntary separation from service”) shall be made hereunder on account of
your “separation from service,” as defined in section 409A of the Code, with
the Company until the later of the date prescribed for payment under this
Special Retention Compensation Package and the first day of the seventh
calendar month that begins after the date of your separation from service (or,
if earlier, the date of your death).  Any
such amounts shall be aggregated and paid in a lump sum, with interest, based
on the prime rate as set out in The Wall Street Journal.

 

This Special Retention
Compensation Package is not an employment agreement and shall not change your
existing status as an employee “at will” of FiberTower.  You may terminate your employment at any time
with or without Good Reason, and FiberTower may terminate your employment at
any time with or without Cause.

 

The provisions of this
Special Retention Compensation Package shall be governed by the laws of the
State of California.

 

This offer will remain open
until February 14, 2008.  If you
decide to accept our offer, and I hope you will, please sign the enclosed copy
of this letter in the space indicated and return it to me before February 14,
2008.

 

 

 

3

 

 

 

	
   

  	
   

  	
  Sincerely,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FIBERTOWER
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  John D. Beletic

  
	
   

  	
   

  	
   

  	
  John
  D. Beletic, Chairman of the Board

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Accepted
  and agreed this 11th day of February, 2008

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Thomas A. Scott

  	
   

  	
   

  
	
  Thomas A. Scott

  	
   

  	
   

  

 

 

 

4

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