UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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Adobe Systems Incorporated |
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Adobe Systems Incorporated
345 Park Avenue
San Jose, California 95110-2704
ANNUAL MEETING OF STOCKHOLDERS
To be Held April 9, 2008
Dear Stockholders:
The following supplements our proxy statement in connection with the Adobe Systems Incorporated 2008 Annual Meeting of Stockholders.
After the filing of our proxy statement on February 27, 2008, it came to our attention that in the table under the caption "Grants of Plan-Based Awards for Fiscal Year 2007" two columns were inadvertently omitted and certain awards granted in 2006 but earned in 2007 were inadvertently included and that the table entitled "Equity Compensation Plan Information" was inadvertently omitted. The complete tables and accompanying narratives are reproduced in their entirety below, so please refer to this supplement when reviewing the information in the tables.
Sincerely, | ||
Karen Cottle Senior Vice President, General Counsel & Secretary |
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February 28, 2008 San Jose, California |
GRANTS OF PLAN-BASED AWARDS FOR FISCAL YEAR 2007
The following table shows all plan-based awards granted to our Named Executive Officers during the fiscal year ended November 30, 2007. The equity awards granted in fiscal year 2007 identified in the table below are also reported in the table "Outstanding Equity Awards at Fiscal Year End for Fiscal Year 2007." For additional information regarding the non-equity incentive plan awards and the equity incentive plan awards, please reference the cash incentives and equity incentives sections of our "Compensation Discussion and Analysis" contained in this proxy statement.
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Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) |
Estimated Possible Payouts Under Equity Incentive Plan Awards(2) |
All Other Option Awards: Number of Securities Underlying Options (#) |
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Grant Date Fair Value of Stock and Option Awards(3) ($) |
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Exercise or Base Price of Option Awards ($/Share) |
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Date of Corporate Approval |
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Name |
Grant Date |
Threshold ($) |
Target ($) |
Maximum ($) |
Threshold (#) |
Target (#) |
Maximum (#) |
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Bruce Chizen(4) | 01/24/07 01/24/07 |
01/24/07 01/24/07 |
416,250 |
1,156,250 |
3,468,750 |
16,100 |
35,000 |
70,000 |
350,000 |
39.69 |
1,694,583 3,420,431 |
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Shantanu Narayen |
01/24/07 01/24/07 |
01/24/07 01/24/07 |
237,600 |
660,000 |
1,980,000 |
11,500 |
25,000 |
50,000 |
225,000 |
39.69 |
1,210,417 2,196,896 |
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Mark Garrett |
01/12/07 02/02/07 02/02/07 |
02/15/07 02/07/07 02/07/07 |
120,100 |
333,611 |
1,000,833 |
3,450 0 |
7,500 12,500 |
15,000 18,750 |
275,000 |
(5) |
39.25 |
2,620,543 341,950 393,100 |
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Karen Cottle |
01/24/07 01/24/07 |
01/24/07 01/24/07 |
91,440 |
254,000 |
762,000 |
3,579 |
7,778 |
15,556 |
70,000 |
39.69 |
376,585 685,238 |
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Matthew Thompson |
01/24/07 01/12/07 12/12/06 |
01/24/07 01/16/07 01/01/07 |
119,213 |
331,146 |
993,438 |
3,450 0 |
7,500 12,500 |
15,000 18,750 |
250,000 |
(5) |
40.05 |
363,125 2,445,258 387,295 |
As discussed in greater detail in "Compensation Discussion and Analysis" contained in the proxy statement, the non-equity incentive awards are granted pursuant to our annual Executive Bonus Plan, with amounts earned based on the achievement of certain financial targets as well as individual performance goals. Cash bonuses are fully vested when earned.
As discussed in greater detail in "Compensation Discussion and Analysis" contained in the proxy statement, the equity incentive awards are granted in the form of stock-settled restricted stock units under our 2006 Performance Share Plan and our 2007 Performance Share Plan. The number of shares actually earned under the 2007 Performance Share Program was determined pursuant to a performance matrix based on achievement of Adjusted Revenue and Adjusted PS Non-GAAP Operating Profit
targets at the end of the performance period (the first 25% of the shares earned fully vest at the certification date or the first anniversary of the grant date, if later). The remaining 75% of the shares earned are then subject to annual time-based vesting over three years from the first anniversary. The number of shares actually earned under the 2006 Performance Share Plan was determined based on the level of achievement of operating income targets as well as additional metrics, including revenue and non-revenue targets. Shares earned were then fully vested upon certification after the end of fiscal year 2007 (the end of the two-year performance period). Adobe did not pay dividends on its common stock during fiscal year 2007.
EQUITY COMPENSATION PLAN INFORMATION
The following table shows information related to our common stock which may be issued under our existing equity compensation plans as of November 30, 2007, including our Director Plan, 1997 Employee Stock Purchase Plan, 2003 Plan, and 1994 Performance and Restricted Stock Plan, plus certain non-stockholder approved equity compensation plans and awards assumed by us in connection with our acquisition of Macromedia:
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Equity Compensation Plan Information |
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Plan Category |
Number of securities to be issued upon exercise of outstanding options, performance shares and restricted stock units |
Weighted average exercise price of outstanding options, performance shares and restricted stock units |
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column) |
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Equity compensation plans approved by stockholders | 46,233,630 | $ | 27.85 | 54,363,947 | (1) | |||
Equity compensation plans not approved by stockholders(2) | 3,850,264 | $ | 18.57 | 1,643,115 | ||||
Total | 50,083,894 | $ | 27.14 | 56,007,062 | ||||
As part of this assumption, effective December 3, 2005, our Board adopted the Adobe Systems Incorporated 2005 Equity Incentive Assumption Plan (the "Assumption Plan"). The Assumption Plan permits the grant of non-statutory stock options, stock appreciation rights, stock purchase rights, stock bonuses, performance shares, and performance units using shares reserved under certain of the assumed Macromedia plans (as described below). The Assumption Plan has not been approved by our stockholders. The terms and conditions of stock awards under the Assumption Plan are substantially similar to those under the 2003 Plan. In accordance with applicable NASDAQ listing requirements, we may grant new stock awards under the Assumption Plan to our employees who were not employed by or providing services to us or any of our affiliates prior to December 3, 2005 (other than employees of Macromedia and its affiliates and subsidiaries).
Under the Assumption Plan, an aggregate of 1.6 million shares of our common stock is reserved for issuance. Such share reserve consists solely of the unused and converted share reserves and potential reversions to the share reserves with respect to certain Macromedia plans (as described below). The share reserve is divided into Reserve A and Reserve B. As of November 30, 2007, Reserve A consisted of 20,870 shares of our common stock which includes the unused share reserve of and potential reversions to the Andromedia, Inc. 1999 Stock Plan and Reserve B consisted of 1,622,245 shares of our common stock which includes the unused share reserve of and potential reversions to the
(i) Macromedia, Inc. 2002 Equity Incentive Plan, (ii) Allaire Corp. 1997 Stock Incentive Plan, (iii) Allaire Corporation 1998 Stock Incentive Plan, and (iv) Allaire Corporation 2000 Stock Incentive Plan. In the event of the forfeiture or expiration of any stock awards granted under these Macromedia plans, the shares of our common stock associated with such forfeited or expired stock awards will become available for award pursuant to the terms of Reserve A or Reserve B, as applicable. No stock awards may be made from Reserve A after August 1, 2009, and no stock awards may be made from Reserve B after November 10, 2014. The Assumption Plan limits the number of shares that may be issued in the form of stock purchase rights, stock bonuses, performance shares, or performance units to 100,000 shares of our common stock. Our Board may terminate or amend the Assumption Plan at any time subject to applicable rules. In the event of a sale of substantially all of our voting stock, a merger involving us, the sale of substantially all of our assets, or a liquidation or dissolution of us, stock awards covered by the Assumption Plan may be assumed or substituted by a successor entity. In the event that a successor entity elects not to assume or substitute for such stock awards, the stock awards will become fully vested.
In addition to the Assumption Plan, we currently maintain 8 equity compensation plans assumed by us in connection with the Macromedia acquisition under which stock awards had been granted by predecessor entities that remained outstanding at the time of the Macromedia acquisition. The share reserve information for these plans and awards are aggregated in the row in the table above regarding our equity compensation plans not approved by stockholders. No future awards may be granted under these plans.
We also assumed certain non-stockholder approved grants made outside of the Assumption Plan and outside of the additional assumed equity compensation plans. As of November 30, 2007, these assumed grants covered a total of 242,092 shares of our common stock at a weighted average exercise price of $16.56.
Please see Part II, Item 8 "Financial Statements and Supplementary Data" of our 2007 Annual Report on Form 10-K in the notes to Consolidated Financial Statements at Note 11, "Stock-Based Compensation" for further information regarding our equity compensation plans and awards.