Electronics for Imaging (EFII)

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Table of Contents

Electronics For Imaging, Inc.

ALIGN="center">Notes to Consolidated Financial Statements—(Continued)

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Table of Contents

Electronics For Imaging, Inc.

ALIGN="center">Notes to Consolidated Financial Statements—(Continued)

In May 2000, our Board of
Directors adopted the 2000 Employee Stock Purchase Plan (the "ESPP "), which became effective on August 1, 2000 and reserved 0.4 million shares of common stock for issuance under the ESPP. The ESPP, as amended, has an automatic share
increase feature pursuant to which the shares reserved under the ESPP will automatically increase on the first trading day in January of each year, beginning with calendar year 2006 and continuing through calendar year 2012. The amount of increase
is equal to three quarters of one percent (0.75%) of the total number of shares of common stock outstanding on the last trading day of December in the immediately preceding calendar year but in no event shall any such increase exceed
2.5 million shares annually. As of December 31, 2007, 2.4 million shares of the Company's stock have been reserved for issuance under the ESPP.

SIZE="2">The ESPP is qualified under Section 423 of the Internal Revenue Code. Eligible employees may contribute from one percent to ten percent of their base compensation not to exceed ten percent of the employee's earnings. Employees are not
able to purchase more than the number of shares having a value greater than $25,000 in any calendar year, as measured at the beginning of the offering period under the ESPP. The purchase price shall be the lesser of 85% of the fair market value of
the stock, either on the offering date or on the purchase date. The offering period shall not exceed 27 months beginning with the offering date. The ESPP provided for offerings of 4 consecutive, overlapping 6-month offering periods, with a new
offering period commencing on the first trading day on or after February 1 and August 1 of each year.

The ESPP was suspended effective
November 9, 2006 as a result of the Company not being able to timely file its Quarterly Report on Form 10-Q for the quarter ended September 30, 2006 and remained suspended through the fourth quarter of 2007, when we became current in our
filings with the SEC. For all participants that did not withdraw from the plan, contributions made through that date were being held to be applied towards the first purchase date subsequent to the reinstatement of the plan. We returned all amounts
for participants with an offering period that exceeded 22 months from the beginning of the offering date. We resumed this plan in the fourth quarter of 2007. No shares were issued under the ESPP in 2007. In 2006 and 2005, 0.4 million and
0.4 million shares were issued under the ESPP at an average purchase price of $14.75 and $14.39, respectively. As of December 31, 2007, there was $0.8 million of total unrecognized compensation cost related to share-based compensation
arrangements granted under the ESPP. That cost is expected to be recognized over a period of 1.3 years. At December 31, 2007, 2006 and 2005, there were 0.4 million, 0.1 million and 0.5 million shares, respectively, available for
issuance under the ESPP.