ADBE » Topics » Item 1.01. Entry into a Material Definitive Agreement.

This excerpt taken from the ADBE 8-K filed Sep 15, 2009.

Item 1.01. Entry into a Material Definitive Agreement.

 

Merger Agreement

 

On September 15, 2009, Adobe Systems Incorporated (“Adobe”) entered into a definitive Agreement and Plan of Merger (the “Merger Agreement”) by and among Adobe, Snowbird Acquisition Corporation, a Delaware corporation and wholly owned subsidiary of Adobe (“Purchaser”), and Omniture, Inc., a Delaware corporation (“Omniture”), pursuant to which Adobe will acquire Omniture, a provider of online business optimization products and services.

 

Adobe, through Purchaser, will acquire all of the outstanding shares of common stock, par value $0.001 per share, of Omniture (the “Shares”) in a two-step transaction comprised of a cash tender offer for all of the Shares (the “Offer”), followed by a merger of Purchaser with and into Omniture (the “Merger”), on the terms and subject to the conditions set forth in the Merger Agreement.  Pursuant to the terms of the Offer, Adobe will pay a purchase price of $21.50 per share for each share of Omniture common stock, net to Omniture’s stockholders in cash, without interest.

 

Purchaser will only be obligated to accept for payment and pay for shares of Omniture common stock validly tendered in the Offer (and not withdrawn) upon the satisfaction or waiver of certain conditions set forth in the Merger Agreement, including, among others, that (i) there is validly tendered (and not withdrawn) a number of shares of Omniture common stock, which, when added to any shares of Omniture common stock already owned by Adobe or any of its controlled subsidiaries, represents at least a majority of the sum of (A) the total number of Shares plus (B) the total number of shares of Omniture common stock that will be issuable at or prior to the March 15, 2010 upon the vesting, conversion or exercise of warrants, stock options or other derivative securities regardless of the conversion or exercise price or other terms or conditions, (ii) certain regulatory clearances have been obtained by Adobe, Purchaser and Omniture, as applicable, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and (iii) the other conditions set forth in Annex I to the Merger Agreement have been satisfied.

 

Following the completion of the Offer and upon the satisfaction or waiver of all of the conditions to the Merger, including, if required, a vote of Omniture’s stockholders with respect to the adoption of the Merger Agreement, Purchaser will be merged with and into Omniture, with Omniture surviving the Merger as a wholly owned subsidiary of Adobe.  Holders of shares of Omniture common stock not purchased in the Offer (other than shares owned by Omniture, Adobe or Purchaser, and shares owned by stockholders who have perfected their statutory rights of appraisal in respect of such shares under Section 262 of the Delaware General Corporation Law) will be entitled to receive $21.50 per share in cash in the Merger, without interest.  Adobe and Omniture have made customary representations and warranties in the Merger Agreement and agreed to certain customary covenants, including covenants regarding operation of the business of Omniture and its subsidiaries and covenants prohibiting Omniture from soliciting, or providing information or entering into discussions concerning, or proposals relating to alternative business combination transactions, except in limited circumstances to permit the board of directors of Omniture to comply with its fiduciary duties under applicable law.  The Merger Agreement contains certain termination rights for each of Adobe and Omniture, and if the Merger Agreement is terminated under certain circumstances, Omniture will be required to pay Adobe a termination fee of $64,000,000.

 

The directors of Omniture and certain of their affiliates currently holding shares representing approximately 9.6% of Omniture’s outstanding common stock have entered into a Tender and Support Agreement with Adobe and Purchaser pursuant to which they have agreed to tender all of their shares in the Offer.  The Tender and Support Agreement terminates upon termination of the Merger Agreement.

 

The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is attached hereto as Exhibit 2.1 and is incorporated herein by reference.

 

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Cautionary Note Regarding Merger Agreement

 

The Merger Agreement has been attached to provide investors with information regarding its terms. It is not intended to provide any other factual information about Omniture, Adobe or Purchaser. In particular, the assertions embodied in the representations and warranties contained in the Merger Agreement are qualified by information in confidential disclosure schedules provided by Omniture in connection with the signing of the Merger Agreement. These disclosure schedules contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the Merger Agreement. Moreover, certain representations and warranties in the Merger Agreement may be subject to a standard of materiality provided for in the Merger Agreement and have been used for the purpose of allocating risk among Omniture, Adobe and Purchaser, rather than establishing matters of fact.  Information concerning the subject matter of the representations and warranties may also change after the date of the Merger Agreement, which subsequent information may not be fully disclosed in the parties’ public disclosures.  Accordingly, the representations and warranties in the Merger Agreement may not constitute the actual state of facts about Omniture, Adobe or Purchaser.

 

Section 8 – Other Events

 

This excerpt taken from the ADBE 8-K filed May 15, 2008.

Item 1.01 Entry into a Material Definitive Agreement.

 

Adobe Systems Incorporated (“Adobe”), as buyer, has entered into a Purchase and Sale Agreement effective as of May 12, 2008 (the “Purchase Agreement”), with NP Normandy Overlook, LLC, a Delaware limited liability company (“Normandy”), as seller, for the acquisition of real property owned by Normandy and located at 21-61 Hickory Drive, Waltham, Massachusetts (the “Property”).

 

Pursuant to the Purchase Agreement, Normandy has agreed to develop the Property and then sell the Property to Adobe following completion of construction of an office building shell and core, parking structure and site improvements in accordance with plans and specifications referenced in the Purchase Agreement.  The office building shell and core to be built by Normandy will be six stories in height and contain approximately 108,469 square feet of space. The parking structure will contain 361 parking spaces.  Normandy will be responsible for construction of core and shell improvements only.  If Adobe requests any changes to the core and shell improvements specified in the plans and specifications referenced in the Purchase Agreement, such changes would be made at Adobe’s cost.  In addition, Adobe, at its cost, will be responsible for construction of tenant improvements in the office building to suit its proposed use of the Property.

 

The purchase price payable by Adobe to Normandy for the Property will be $44,685,000. Under the Purchase Agreement, Adobe will make an initial deposit of $7,000,000.  That deposit will be held in escrow until the closing.  At closing, the deposit will be applied to the purchase price.  In the event of a default by Adobe that remains uncured at closing, the deposit would be payable to Normandy as liquidated damages.

 

Normandy’s construction is expected to be completed and the closing is expected to occur in May 2009. If substantial completion of the building has not been satisfied by November 15, 2009 (subject to certain extensions as provided in the Purchase Agreement), Adobe may elect to terminate the Purchase Agreement.

 

Adobe has no relationship with Normandy other than as buyer and seller under this Purchase Agreement.

 

The description of the Purchase Agreement and Property provided above is qualified in its entirety by reference to the full and complete terms contained in the Purchase Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

 

Section 9 – Financial Statements and Exhibits

 

This excerpt taken from the ADBE 8-K filed Feb 29, 2008.

Item 1.01 Entry into a Material Definitive Agreement.

 

Adobe Systems Incorporated (the “Company”) entered into the Second Amendment to Credit Agreement dated as of February 26, 2008 with Bank of America, N.A. as Administrative Agent and the other lenders party thereto (the “Second Amendment”). The Second Amendment amends the Company’s existing Credit Agreement dated as of February 16, 2007 among BNP Paribas, Keybank National Association, and UBS Loan Finance LLC as Co-Documentation Agents; JPMorgan Chase Bank, N.A. as Syndication Agent; Bank of America, N.A. as Administrative Agent and Swing Line Lender; the other lenders party thereto; and Banc of America Securities LLC and J.P. Morgan Securities Inc. as Joint Lead Arrangers and Joint Book Managers, as amended by that Amendment to Credit Agreement dated as of August 13, 2007 with Bank of America, N.A. as Administrative Agent and the other lenders party thereto.

 

The Second Amendment extends the maturity date of the Company’s loan commitments for an additional year to February 16, 2013.

 

Certain of the lenders and their respective affiliates have performed, and may in the future perform, various commercial banking, investment banking, and other financial advisory services for the Company and its subsidiaries, for which they have received, and will receive, customary fees and expenses.

 

The description of the Second Amendment provided above is qualified in its entirety by reference to the full and complete terms contained in the Second Amendment, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

 

Section 2 — Financial Information

 

This excerpt taken from the ADBE 8-K filed Aug 16, 2007.

Item 1.01 Entry into a Material Definitive Agreement.

Adobe Systems Incorporated (the “Company”) entered into the Amendment to Credit Agreement dated as of August 13, 2007 with Bank of America, N.A. as Administrative Agent and the other lenders party thereto (the “Amendment”). The Amendment amends the Company’s existing Credit Agreement dated as of February 16, 2007 among BNP Paribas, Keybank National Association, and UBS Loan Finance LLC as Co-Documentation Agents; JPMorgan Chase Bank, N.A. as Syndication Agent; Bank of America, N.A. as Administrative Agent and Swing Line Lender; the other lenders party thereto; and Banc of America Securities LLC and J.P. Morgan Securities Inc. as Joint Lead Arrangers and Joint Book Managers (the “Original Credit Agreement,” and together with the Amendment, the “Credit Agreement”).

The Credit Agreement is a five-year $1 billion senior unsecured revolving credit facility, providing for loans to the Company and certain of its subsidiaries. The facility will be used for general corporate purposes.

The Original Credit Agreement provided for $500 million in lender loan commitments, with an option by the Company to request an additional $500 million in commitments from any of the original lenders and additional eligible lenders if such original lenders decline to participate.  In connection with such a request by the Company, the lenders party to the Amendment approved an increase in the loan commitments by $500 million, for a total of $1 billion. Pursuant to the terms of the Credit Agreement, the Company retains an option to request an additional $500 million in commitments, for a maximum aggregate loan commitment of $1.5 billion.

The loans bear interest, payable quarterly, based on a pricing grid tied to the financial covenant.  Commitment fees are payable quarterly at rates between 0.05% and 0.15% per year based on the same pricing grid.

The Credit Agreement contains various customary representations, warranties, and affirmative, negative and financial covenants. The affirmative covenants require the Company and its subsidiaries to deliver financial statements and certificates; pay and perform obligations; preserve and maintain its corporate existence; maintain property and insurance; comply in all material respects with applicable laws; maintain proper books and records; maintain necessary approvals and authorizations; and other requirements. The negative covenants include some limitations on creating and incurring liens; indebtedness; mergers and acquisitions; dispositions; changes in the nature of the business of the Company and its subsidiaries; transactions with affiliates; use of proceeds; and other matters. The financial covenant requires the Company not to exceed a certain maximum leverage ratio.

Customary defaults are also contained in the Credit Agreement, including defaults related to the nonpayment of principal of a loan; nonpayment of interest on a loan; failure of the Company to perform or observe any specified term, covenant or agreement contained in the Credit Agreement; the failure of a loan party to perform or observe any other covenant or agreement contained in a loan document; cross-defaults on other indebtedness or guarantees; insolvency; an inability to pay debts by the Company or a subsidiary; and other matters. In an event of default as specified in the Credit Agreement, the lenders may terminate the Credit Agreement, and all loan amounts outstanding, including all accrued interest and unpaid fees, would become immediately due and payable.

The lenders’ commitments under the Credit Agreement will terminate on February 16, 2012 and any borrowings outstanding will mature and be payable on such date.  The Company may request, however, on any anniversary of the closing date of the Original Credit Agreement, that each lender extend the maturity date of its loan commitments for an additional year.

Certain of the lenders and their respective affiliates are currently performing, have performed, and may in the future perform, various commercial banking, investment banking, and other financial advisory services for the Company and its subsidiaries, for which they have received, and will receive, customary fees and expenses.

As of August 16, 2007, the Company had no outstanding borrowings under the Credit Agreement.

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The description of the Credit Agreement provided above is qualified in its entirety by reference to the full and complete terms contained in the Original Credit Agreement and the Amendment, which are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.

Section 2 – Financial Information

This excerpt taken from the ADBE 8-K filed Mar 28, 2007.

Item 1.01 Entry into a Material Definitive Agreement.

On March 26, 2007, Adobe Systems Incorporated (the “Company”) renewed its lease arrangement for one of three buildings the Company occupies as part of its corporate headquarters, known as the Almaden Tower, located in San Jose, California (the “Property”).

Pursuant to a lease agreement (the “Lease”), dated March 26, 2007, between the Company as Lessee and  SELCO Service Corporation as Lessor, the Company has leased the Property for a new five year term that extends to March 26, 2012, with an option to extend for an additional five years at the Company’s sole discretion.  Rent payments under the Lease are a function of LIBOR; payments for the initial term are currently estimated to be $29.7 million.  The Company has the option to purchase the Property at any time during the term of the Lease for approximately $103.6 million.  The maximum recourse amount (or residual value guarantee) under this obligation is approximately $89.5 million.  The Lease will continue to qualify for operating lease treatment under Statement of Financial Accounting Standards No. 13, “Accounting for Leases,” and as such, the Property and related obligations will not be included on the Company’s consolidated balance sheet.

The Lease is subject to a financial covenant regarding the maximum permitted leverage ratio, and is subject to customary default provisions, including, without limitation, those relating to non-payment under the Lease, non-payment of certain other debt obligations of the Company, fundamental changes in the nature of the business of the Company, false or misleading representations or warranties, performance defaults, and events of insolvency.   In the case of a default, the Lessor may demand the Company purchase the Property for an amount equal to the Lease balance, or require that the Company relinquish the Property.  At the end of the term of the Lease, the Company can purchase the Property for the Lease balance or remarket the Property.  If the Company chooses to remarket the Property, the Company is bound to arrange the sale of the Property to an unrelated third party and will be required to pay the Lessor any shortfall between the net remarketing proceeds and the Lease balance, up to the maximum recourse amount.

As part of the financing of the Lease, the Company purchased a portion of the Lessor’s receivable under the Lease for approximately $80.4 million, which will be recorded as an investment in lease receivable on the Company’s consolidated balance sheet for the quarter ended June 1, 2007.  This purchase may be credited against the purchase price if the Company purchases the Property, or may be repaid from the sale proceeds if the Property is sold to a third party.  The Company participated in this investment through a funding arrangement with KeyBank National Association (the “Lender”), the terms of which are set forth in the Participation Agreement, dated March 26, 2007, by and among the Company, Lessor, Lender and Key Lease Advisory Services (the “Participation Agreement”). Pursuant to the Financial Accounting Standards Board Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others,” the Company will record $3.0 million in other long-term liabilities, equal to the fair value of the residual value guarantee, with the offsetting entry recorded to prepaid rent in other assets.  This balance will be amortized to the income statement over the life of the Lease.

The foregoing description of the Lease and related Participation Agreement is qualified in its entirety by reference to each of the Lease and the Participation Agreement, copies of which are attached to this Current Report as Exhibits 10.1 and 10.2.

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Section 2 - Financial Information

This excerpt taken from the ADBE 8-K filed Sep 26, 2006.

Item 1.01.  Entry into a Material Definitive Agreement

 

Deferred Compensation Plan

 

On September 21, 2006, the Board of Directors of Adobe Systems Incorporated (“Adobe”) approved the Adobe Systems Incorporated Deferred Compensation Plan, effective December 2, 2006 (the “Deferred Compensation Plan”). The Deferred Compensation Plan is an unfunded, non-qualified, deferred compensation arrangement aimed at providing members of the Board of Directors and eligible management or other highly-compensated employees of Adobe and its subsidiaries an opportunity to defer all or a portion of their compensation. Participants may elect to contribute up to 75% of their base salary and 100% of other specified compensation, including commissions, bonus, performance-based restricted stock units, and directors’ fees.  Participants will be able to elect the payment of benefits to begin on a specified date at least three years in the future in the form of a lump sum or annual installments over five to fifteen years.  Upon termination of a participant’s employment with Adobe, such participant will receive a distribution in the form of a lump sum payment. All distributions will be made in cash, except that deferred performance share units will be settled in stock. The Board of Directors, or such other committee as appointed by the Board of Directors, will serve as the administrator of the Deferred Compensation Plan. The Deferred Compensation Plan becomes effective as of December 2, 2006 and will continue in effect until terminated in accordance with its terms.

 

The foregoing describes only the material terms of the Deferred Compensation Plan and is qualified in its entirety by the terms and conditions of the complete plan. A copy of the Deferred Compensation Plan is attached hereto as Exhibit 10.1 and is incorporated by reference into this Item 1.01.

 

Executive Severance Plan in the Event of a Change of Control

 

On September 21, 2006, the Board of Directors approved a renewal of the Adobe Systems Incorporated Executive Severance Plan in the Event of a Change of Control (the “Executive Severance Plan”), effective December 12, 2006 (the termination date of Adobe’s current executive severance plan).  Capitalized terms not otherwise defined in the following description have the definitions as set forth in the Executive Severance Plan.

 

Pursuant to the terms of the Executive Severance Plan, a “change of control” is defined as: (i) the beneficial ownership of 30% or more of the combined voting power of Adobe securities by any person or entity; (ii) when Incumbent Directors cease to constitute a majority of the Board of Directors; (iii) there occurs a merger or consolidation involving Adobe, and Adobe stockholders do not own more than 50% of the combined voting power of Adobe after the transaction; (iv) the sale, liquidation or distribution of all or substantially all of the assets of Adobe; or (v) a “change of control” within the meaning of Section 280G of the Internal Revenue Code. If, within two years after a change of control (the “Covered Period”), the employment of an executive covered by the Executive Severance Plan is terminated without Cause, or if the executive resigns for Good Reason, provided he or she signs a release of claims (an “Involuntary Termination”), the executive will receive a cash severance payment as follows:

 

Earned but unpaid salary and the cash equivalent for accrued but unused personal time off through the date of termination; plus, the pro rata portion of the annual bonus for the year in which termination occurs (calculated on the basis of the executive’s target bonus and on the assumption that all performance targets have been or will be achieved); plus, an amount equal to the product of the sum of the executive’s Reference Salary and Reference Bonus, multiplied by:

 

(A)      for eligible vice presidents or persons determined to be in an equivalent position, two plus one-twelfth for each year of completed service with Adobe (not in excess of twelve years), or

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(B)        for eligible employee directors, senior directors or persons determined to be in an equivalent position, one plus one-twelfth for each year of completed service with Adobe (not in excess of six years) (each a “Severance Multiple”).

 

In the event that any amount payable under the Executive Severance Plan, alone or when aggregated with any other amount payable or benefit provided to an executive pursuant to any other Adobe plan or arrangement, would constitute an “excess parachute payment” within the meaning of Section 280G of the Internal Revenue Code, then notwithstanding the other provisions of the Executive Compensation Plan, the amounts payable will not exceed the amount which produces the greatest after-tax benefit to the executive.

 

All outstanding options, bonus stock, performance grants, restricted stock and other equity grants or awards will accelerate and vest 100% on the date of an executive’s Involuntary Termination during the Covered Period (except performance share unit awards, which shall continue to be governed by their current terms). The exercise period of all such options will be extended to twelve months from termination.

 

In addition, each executive will receive COBRA premium payments, for the executive and any covered dependants, up to the legal limit for such coverage, or for the period of years equal to the executive’s Severance Multiple, whichever is less. If an executive covered by the Executive Severance Plan becomes covered under another employer’s group health plan (other than a plan which imposes a pre-existing condition exclusion which applies to the executive) during this applicable period of COBRA continuation coverage, the COBRA premium payments will cease.

 

The Executive Severance Plan will terminate automatically in five years from the effective date unless extended by Adobe or unless a change of control shall have occurred prior thereto, in which case the Executive Severance Plan will terminate following the later of the date which is a least 24 months after the occurrence of a change of control or the payment of all benefits due under the terms of the plan.

 

The foregoing describes only the material terms of the Executive Severance Plan and is qualified in its entirety by the terms and conditions of the complete plan. A copy of the Executive Severance Plan is attached hereto as Exhibit 10.2 and is incorporated by reference into this Item 1.01.

 

Section 9 – Financial Statements and Exhibits

 

This excerpt taken from the ADBE 8-K filed May 22, 2006.

Item 1.01 Entry into a Material Definitive Agreement.

 

On May 16, 2006, Adobe Systems Incorporated (“Adobe” or the “Company”) signed an employment offer letter (the “Offer Letter”) with Randy Furr, pursuant to which Mr. Furr agreed to serve as Executive Vice President and Chief Financial Officer. The material terms of the Offer Letter, including participation in the Adobe Executive Severance Plan in the Event of a Change of Control (the “Change of Control Plan”), are summarized in Item 5.02(c) below.

 

This excerpt taken from the ADBE 8-K filed Mar 23, 2006.

Item 1.01 Entry into a Material Definitive Agreement.

 

On March 22, 2006, Adobe Systems Incorporated (the “Company”) entered into an Employment Transition Agreement (the “Transition Agreement”) with Murray J. Demo, the Executive Vice President and Chief Financial Officer.

 

Pursuant to the terms of the Transition Agreement, Mr. Demo will continue to serve as the Company’s Chief Financial Officer until June 16, 2006 or such earlier time as the Company requests that he resign from that position. Mr. Demo will continue to be a full-time employee of the Company through June 16, 2006 and be provided the same base salary and employee benefits that he currently receives.

 

From June 17 through December 1, 2006, Mr. Demo will become a part-time employee working up to 20 hours per week, and paid on an as-worked non-exempt basis at a rate of $223.55 per hour worked. Mr. Demo’s duties for the remainder of his employment will consist of providing transition assistance as requested by the Company. The terms of Mr. Demo’s equity awards will not be modified in any way by the Transition Agreement and will continue to be determined in accordance with the terms of the applicable equity award plans and/or agreements. Mr. Demo will be eligible for COBRA insurance coverage and, except as provided below, will receive other employee fringe benefits in accordance with the Company’s respective plans as applicable to part-time employees.

 

If Mr. Demo remains an employee in good standing with the Company through at least June 16, 2006, he will receive a pro-rated portion of his Annual Incentive Plan (“AIP”) bonus for fiscal 2006, which award will be based on his AIP target percentage multiplied by his actual base salary earnings during fiscal 2006 and actual corporate results. Any AIP bonus earned will be paid to Mr. Demo in accordance with the payment terms of the AIP, which is expected to be paid in January 2007.

 

If Mr. Demo begins employment for another company at any time prior to December 2, 2006, his employment with the Company will terminate on the day immediately preceding the start of such alternate employment, and all Adobe benefits and bonus programs will terminate in accordance with the terms of the respective plans and programs, except with respect to the AIP as described above.

 

The foregoing description of the Transition Agreement is qualified in its entirety by reference to the Transition Agreement, a copy of which is attached to this report as Exhibit 10.1.

 

Section 9 – Financial Statements and Exhibits

 

This excerpt taken from the ADBE 8-K filed Feb 3, 2006.

Item 1.01. Entry into a Material Definitive Agreement.

 

2006 Performance Share Program

 

Effective February 2, 2006, the Compensation Committee of the Board of Directors (the “Committee”) of Adobe Systems Incorporated (the “Company”) adopted the 2006 Performance Share Program (the “Program”). The Committee established the Program to align the new leadership team to achieve key integration milestones and create stockholder value and to retain key executives. All members of the Company’s executive management team and other key members of senior management (the “Program Participants”) will participate in the Program. Awards under the Program were granted February 2, 2006 in the form of “Performance Shares” pursuant to the terms of the Company’s 2003 Equity Incentive Plan or Amended 1994 Performance and Restricted Stock Plan. Performance Shares will be earned, if at all, following the 2007 fiscal year, subject to specified change in control exceptions, and will be settled in fully-vested shares of Adobe common stock.

 

The Program requires that the Company achieve at least 90% of the Board of Directors-approved operating income targets for the combined fiscal years 2006 and 2007 as a minimum threshold before the Program Participants will earn any Performance Shares under the Program.  If this threshold is achieved, the number of Performance Shares potentially earned under the Program will be 150% of the target payout, and the actual number of Performance Shares earned under the Program will be based on the achievement of eight specific integration-related metrics, including both revenue and non-revenue metrics.  Each metric will be weighted equally.  The Committee may alter the payout for the achievement of non-revenue metrics based on such factors as market reception, revenue, commitment of strategic partners and quality of product shipped, and the payout for revenue metrics will correlate to the percent of such metric achievement.  The Plan Participants may receive less than the Performance Share target payouts under the Program, and in no event may the actual payout exceed 150% of target payout.

 

The Performance Share target and maximum payouts for the Company’s executive officers are as follows:

 

Officer

 

Title

 

Target

 

Maximum
(150%)

 

Bruce R. Chizen

 

Chief Executive Officer

 

55,000

 

82,500

 

Shantanu Narayan

 

President and Chief Operating Officer

 

28,000

 

42,000

 

Stephen A. Elop

 

President of Worldwide Field Operations

 

25,000

 

37,500

 

Karen O. Cottle

 

Senior Vice President, General Counsel and Secretary

 

14,000

 

21,000

 

Margaret (Peg) Wynn

 

Senior Vice President, Human Resources

 

14,000

 

21,000

 

 

The description of the Program contained herein is a summary of the material terms of the Program, does not purport to be complete, and is qualified in its entirety by reference to the applicable Program used in connection with the 2003 Equity Incentive Plan or Amended 1994 Performance and Restricted Stock Plan, which are filed hereto as Exhibits 10.1 and 10.2, respectively, and incorporated herein by reference.  The forms of Maximum Award Grant Notice and Performance Share Maximum Award Agreement for use in connection with grants under the Program pursuant to the terms of the 2003 Equity Incentive Plan are attached hereto as Exhibits 10.3 and 10.4, respectively.  The forms of Maximum Award Grant Notice and Performance Share Maximum Award Agreement for use in connection with grants under the Program pursuant to the terms of the Amended 1994 Performance and Restricted Stock Plan are attached hereto as Exhibits 10.5 and 10.6, respectively.

 

This excerpt taken from the ADBE 8-K filed Jan 13, 2006.

Item 1.01 Entry into a Material Definitive Agreement.

 

On January 10, 2006, at a meeting of the Executive Compensation Committee of the Board of Directors of the Company (the “Committee”), the Committee approved the terms of the 2006 Management Team Annual Incentive Plan (the “2006 Plan”) which is applicable to members of the Company’s management team.

 

The 2006 Plan requires the Company to achieve a 90% revenue to plan and 90% operating profit to plan minimum threshold for the management team to be eligible for an annual bonus.  The bonus is computed as a percentage of base salary, which is established by the Committee. In fiscal 2006, the target level of bonus equals or exceeds 50% of salary for each of the management team. The percentage target of each bonus contains corporate targets specifically tied to achieving corporate revenue and operating profit thresholds (“Corporate Results”), individual goal achievement and revenue achievement. The bonus target is weighted 50% on individual goal achievement and Corporate Results and 50% on revenue achievement. The Committee may alter the incentive payout based on such factors as achievement of publicly announced targets, product milestones, strategic goals, cross-functional teamwork and collaboration, and unforeseen changes in the economy and/or geopolitical climate.

 

A copy of the 2006 Plan is attached as Exhibit 10.1 to this Current Report on Form 8-K.

 

Section 9 – Financial Statements and Exhibits

 

This excerpt taken from the ADBE 8-K filed Dec 12, 2005.

Item 1.01. Entry into a Material Definitive Agreement.

 

(a) Amendment to Employment Agreement with Director

 

On December 7, 2005, Adobe Systems Incorporated (“Adobe”),  Adobe Macromedia Software LLC, a wholly-owned subsidiary of Adobe (formerly Macromedia, Inc., “Macromedia”) and Robert K. Burgess, a member of the board of directors of Adobe, entered into an amendment (the “Amendment”) to the amended and restated employment agreement by and between Macromedia and Mr. Burgess, dated January 21, 2005 (the “Prior Agreement”).  A copy of the Prior Agreement is incorporated by reference as Exhibit 10.1 to this Report and incorporated herein by reference.

 

Pursuant to the Amendment, the parties agreed that any payments which may be due to Mr. Burgess in connection with Mr. Burgess’s termination of employment and which may be subject to Internal Revenue Code Section 409A (“Section 409A”) shall be delayed until the earliest date necessary to enable such payments to be made without incurring an excise tax under Section 409A.

 

The summary of material terms of the Amendment set forth above is qualified in its entirety by reference to the Amendment, a copy of which is filed as Exhibit 10.2 to this Report and incorporated herein by reference.

 

This excerpt taken from the ADBE 8-K filed Sep 23, 2005.

Item 1.01 Entry into a Material Definitive Agreement.

 

On September 20, 2005, the Board of Directors of Adobe Systems Incorporated (“Adobe”), pursuant to the recommendation of the Nominating and Governance Committee, approved changes to the compensation for non-employee members of the Board.

 

Beginning December 3, 2005, the annual Board cash retainer will be $35,000. Committee annual retainers will be as follows: Audit Committee—Chairman $30,000, members $15,000; Executive Compensation Committee—Chairman $15,000, members $7,500; Nominating and Governance Committee—Chairman $10,000, members $5,000.

 

In addition, each non-employee director is automatically granted a stock option, under Adobe’s 1996 Outside Directors’ Stock Option Plan (the “1996 Plan”) to purchase 25,000 shares of Adobe’s common stock at a price per share equal to the closing price of Adobe’s common stock on the grant date. These options are granted on the day after Adobe’s annual meeting of stockholders and are subject to vesting provisions as described below. New non-employee directors joining the Board automatically receive an option to purchase 50,000 shares of Adobe common stock under the 1996 Plan, subject to the same vesting terms, on the day they become a director, but do not receive an annual grant in connection with their initial annual meeting as a director.

 

Options granted under the 1996 Plan vest and become exercisable at a rate of 25% on the day immediately preceding each of the first and second annual meetings following the date of grant and the remaining 50% on the day immediately preceding the third annual meeting following the date of grant. In the event of any merger, reorganization, or sale of substantially all of Adobe’s assets in which there is a change in control of Adobe, all option shares become immediately and fully vested.

 

Directors are offered to purchase Adobe’s health, dental and vision insurance at COBRA rates. Directors are also entitled to reimbursement of reasonable travel expenses associated with Board and Committee meetings as well as costs and expenses incurred in attending director education programs and other Adobe-related seminars and conferences.

 

The summary of director compensation set forth above is qualified in its entirety by reference to the description of 2006 director compensation, a copy of which is attached to this report as Exhibit 10.1 and incorporated herein by reference.

 

Section 5 – Corporate Governance and Management

 

This excerpt taken from the ADBE 8-K filed Apr 18, 2005.

Item 1.01 Entry into a Material Definitive Agreement.

 

On April 15, 2005, Adobe Systems Incorporated (the “Company”) entered into an Executive Resignation Agreement and General Release of Claims (the “Resignation Agreement”) with Jimmie E. Stephens, the Senior Vice President of Worldwide Sales and Field Operations.

 

Pursuant to the terms of the Resignation Agreement, effective as of March 31, 2005 (the “Resignation Date”), Mr. Stephens voluntarily resigned from any positions that he held as an officer of the Company and/or any of its subsidiaries. Mr. Stephens will continue to be employed by the Company through November 30, 2005 (the “Termination Date”), in order to provide transition assistance as requested by the Company. The Company will continue to provide Mr. Stephens the same base salary and employee benefits that he was receiving immediately prior to the Resignation Date. The terms of Mr. Stephens’ equity awards will not be modified in any way by the Resignation Agreement and will continue to be determined in accordance with the terms of the applicable equity award plans and/or agreements.

 

Effective as of the Termination Date, the Resignation Agreement provides for: (i) a lump sum severance payment of $714,000, less applicable withholdings; and (ii) COBRA health insurance coverage premium payments through the earlier of November 30, 2006 or the date on which Mr. Stephens first becomes eligible for other group health insurance coverage.

 

The foregoing description of the Resignation Agreement is qualified in its entirety by reference to the Resignation Agreement, a copy of which is attached to this report as Exhibit 10.1.

 

On April 16, 2005, the Executive Compensation Committee adopted a resolution (the “Resolution”) that amends certain provisions of the Company’s Executive Severance Plan in the Event of a Change of Control (the “Retention Plan”) in order to ensure that anyone at Vice President level or a more senior level is covered under its terms and conditions, provided that such individual does not also benefit from a separate individual retention and/or severance agreement.

 

The foregoing description of the amendment to the Retention Plan is qualified in its entirety by reference to the Resolution, a copy of which is attached to this report as Exhibit 10.2.

 

Section 9 – Financial Statements and Exhibits

 

This excerpt taken from the ADBE 8-K filed Jan 13, 2005.

Item 1.01 Entry into a Material Definitive Agreement.

 

On November 10, 2003, at a meeting of the Executive Compensation Committee of the Board of Directors of the Company (the “Committee”), the Committee approved the terms of the 2004 Annual Executive Incentive Plan (the “2004 Plan”) which is applicable to members of the Company’s executive team.

 

The 2004 Plan required the Company to achieve a 90% revenue to plan and 90% operating profit to plan minimum threshold for the executive team be eligible for an annual bonus.  The bonus is computed as a percentage of base salary, which is established by the Committee. In fiscal 2004, the target level of bonus equaled or exceeded 50% of salary for each of the executive officers. The percentage target of each bonus contains corporate targets specifically tied to corporate revenue and operating profit levels, and for certain officers, the bonus is tied to business unit revenue. In addition, individual goals are set for certain executive officers. The Committee may alter the incentive payout based on such factors as achievement of publicly announced targets, product milestones, strategic goals, cross-functional teamwork and collaboration, and unforeseen changes in the economy and/or geopolitical climate.

 

A copy of the 2004 Plan is attached as Exhibit 10.1 to this Current Report on Form 8-K.

 

On July 30, 2004, at a meeting of the Committee, the Committee approved the terms of the 2005Annual Executive Incentive Plan (the “2005 Plan”) which is applicable to members of the Company’s executive team.

 

The 2005 Plan requires the Company to achieve a 90% revenue to plan and 90% operating profit to plan minimum threshold for the executive team be eligible for an annual bonus.  The bonus is computed as a percentage of base salary, which is established by the Committee. In fiscal 2005, the target level of bonus equals or exceeds 50% of salary for each of the executive officers. The percentage target of each bonus contains corporate targets specifically tied to corporate revenue and operating profit levels, individual goal achievement and for certain officers, the bonus is tied to business unit revenue. For 2005 the bonus target is weighted 70% on revenue achievement and 30% on individual goal achievement. For the SVP WW Sales, the bonus is based 100% on revenue achievement. The Committee may alter the incentive payout based on such factors as achievement of publicly announced targets, product milestones, strategic goals, cross-functional teamwork and collaboration, and unforeseen changes in the economy and/or geopolitical climate.

 

A copy of the 2005 Plan is attached as Exhibit 10.2 to this Current Report on Form 8-K.

 

Section 9 – Financial Statements and Exhibits

 

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