Document:

Exhibit 10.2

 

ADOBE
SYSTEMS INCORPORATED

AMENDED
1994 PERFORMANCE AND RESTRICTED STOCK PLAN

(as amended January 24, 2008)

 

1.             Establishment
and Purpose.

 

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

 

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

 

2.             Administration.

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

7.             Performance
Awards.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(A)          growth in revenue;

 

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

 

(C)          operating margin;

 

(D)          gross margin;

 

(E)           operating income;

 

(F)           pre-tax profit;

 

(G)          earnings before
interest, taxes and depreciation;

 

(H)          net income;

 

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

 

(J)           earnings per share;

 

(K)          return on
stockholder equity;

 

(L)           return on net
assets;

 

(M)          expenses;

 

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(N)          return on capital;

 

(O)          economic value
added;

 

(P)           market share; and

 

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

 

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

 

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

 

(c)           Settlement
of Performance Awards.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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8.             Restricted
Stock and Restricted Stock Unit Awards.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

11.          Change
of Control.

 

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

 

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

 

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

 

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

 

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

 

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

 

(5)           A liquidation or
dissolution of the Company.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

12

 

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

 

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

 

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

 

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

 

 

	
   

  	
  /s/ Karen Cottle

  
	
   

  	
   

  
	
   

  	
  Karen Cottle, Secretary

  

 

13Exhibit 10.11

 

ADOBE
SYSTEMS INCORPORATED

NONSTATUTORY STOCK OPTION
AGREEMENT

(STANDARD U.S.)

 

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 

 

%%FIRST_NAME%-%
%%LAST_NAME %-%                  (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 %%OPTION_DATE,’Month DD, YYYY’%-%

 

(b)           “Number of Option Shares”
means %%TOTAL_SHARES_GRANTED%-% shares of Stock, as adjusted from time to time
pursuant to Section 9.

 

(c)           “Exercise Price”
means $%%OPTION_PRICE%-% per share of Stock, as adjusted from time to time
pursuant to Section 9.

 

(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 36 full months of the
  Participant’s continuous Service from the Initial Vesting Date until the
  Vested Percentage equals 100%

  	
   

  	
  2.08

  	
  %

  

 

(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 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 Global Select 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.

 

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

 

2

 

(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 9.

 

(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 of Control and/or the individual written retention agreement in effect
on the Date of Option Grant between the Company and the Participant, to the
extent applicable to the Participant.

 

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 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.

 

3

 

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 other time as
reasonably requested by the Company, the Participant hereby authorizes
withholding of all applicable Tax-Related Items from payroll and any 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

 

4

 

(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;

 

5

 

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         in
consideration of the grant of the Option, 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, the Participant shall be deemed irrevocably to
have waived his or her 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 of Control to the
extent provided in Section 11.2(c) of the Plan.

 

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%.

 

6

 

(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)           Other Termination of Service.  If the Participant’s Service terminates for
any reason, except Normal Retirement, Early Retirement, Disability, or death,
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.

 

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

 

7

 

9.             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 9
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 9 shall be final, binding and conclusive.

 

10.           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 9.  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 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.

 

11.           MISCELLANEOUS
PROVISIONS.

 

11.1         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.

 

11.2         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.

 

11.3         Termination or Amendment. 
The Committee may terminate or amend the Plan or the Option at any time;
provided, however, that except as provided in connection with a Change of
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.

 

8

 

11.4         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 11.4 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 11.4(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 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.

 

11.5         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.

 

9

 

11.6         Headings.  The
headings of the Sections in this Option Agreement are inserted for convenience
only and shall not be deemed to constitute a part of this Option Agreement or
to affect the meaning of this Option Agreement.

 

11.7         Integrated Agreement. 
This Option Agreement, together with the Superseding Agreement, if any,
and the Plan 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. Any capitalized terms not defined herein shall have the
definition as set forth in the Plan and/or the Superseding Agreement. In the
event of any conflict between the provisions of this Option Agreement and those
of the Plan, the provisions of the Plan shall control.

 

11.8         Applicable Law and Venue. 
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. For
purposes of litigating any dispute that arises directly or indirectly from the
relationship of the parties as evidenced by this Option Agreement, the parties
herby submit to and consent to the jurisdiction of the State of California and
agree that such litigation shall be conducted only in the courts of Santa Clara
County, California, or the federal courts of the United States for the Northern
District of California, and no other courts, where this Option Agreement is
made and/or performed.

 

 

	
   

  	
  ADOBE SYSTEMS INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Shantanu Narayen

  	
   

  
	
   

  	
   

  	
  Shantanu
  Narayen

  
	
   

  	
  Title:

  	
  Chief
  Executive 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.

 

10

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