8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (date of earliest event reported): May 18, 2006

Adobe Systems Incorporated

(Exact name of Registrant as specified in its charter)

Delaware	0-15175	77-0019522
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

345 Park Avenue
San Jose, California 95110-2704
(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (408) 536-6000

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 1 – Registrant’s Business and Operations

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.

Item 5.02. Departure of Directors or Principal Officer; Election of Directors; Appointment of Principal Officers.

(c) On May 18, 2006, Adobe announced that Randy Furr was to be named the Company’s Executive Vice President and Chief Financial Officer. Mr. Furr’s employment with the Company is expected to begin on May 30, 2006. A copy of the Company’s press release naming Mr. Furr to the positions of Executive Vice President and Chief Financial Officer is attached hereto as Exhibit 99.1

Pursuant to the Offer Letter, Mr. Furr will receive an annual base salary of $500,000 and is eligible to receive a bonus of up to 75% of his annual base salary upon attainment of certain Company and individual objectives, pro-rated for the 2006 fiscal year based on Mr. Furr’s actual start date. In addition, Mr. Furr will be eligible to participate in the Adobe profit sharing plan, which could result in a payment to Mr. Furr of up to 10% of his annual base salary. Such payments are made quarterly based on attainment of certain Company targets and employment for the full quarterly eligibility period. Mr. Furr will also receive a sign-on bonus of $100,000 upon start of employment.

Mr. Furr will be granted an option to purchase 300,000 shares of Adobe common stock at an exercise price equal to the closing price of the Company’s common stock on June 19, 2006. The option will vest over 4 years, with 25% of the shares vesting on the first anniversary of the grant date and the remaining shares vesting in equal monthly installments over the remaining 36 months. The option will be issued under the Company’s 2003 Equity Incentive Plan and will be subject to the terms and conditions of such plan. As part of the Company’s 2006 Performance Share Program (the “Program”), Mr. Furr will also be granted a target award of 20,000 “Performance Shares” pursuant to the terms of the Company’s 2003 Equity Incentive Plan. The Performance Shares will be earned, if at all, following the 2007 fiscal year, based on achievement of specific performance metrics, and will be settled in fully-vested shares of Adobe common stock. Mr. Furr may receive less than the Performance Share target payout under the Program, and in no event may the actual payout exceed 150% of target payout.

Mr. Furr will also be eligible to participate in the Company’s standard benefits package, including medical and dental plans, vision care, life insurance and disability coverage, as well as the Company’s 401(k) Retirement Savings Plan and the Employee Stock Purchase Plan.

Pursuant to the Change of Control Plan, if within two years after a change of control (the “Covered Period”), Mr. Furr’s employment is terminated without Cause, or if he resigns for Good Reason or Disability (all as defined in the Change of Control Plan) (an “Involuntary Termination”), Mr. Furr 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 Mr. Furr’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 (i) the sum of Mr. Furr’s Reference Salary and Reference Bonus (each as defined in the Change of Control Plan), multiplied by (ii) two plus one-twelfth for each year of completed service with the Company (not in excess of 12 years) (the “Severance Multiple”).

2

All of Mr. Furr’s outstanding options, performance grants and restricted stock awards will accelerate and vest 100% on the date of his Involuntary Termination during the Covered Period (except performance share unit awards, which shall continue to be governed by their current terms). Additionally, the exercise period of all such awards will be extended to 12 months from termination.

Mr. Furr will receive COBRA premium payments up to the legal limit for such coverage, or for the period of years equal to his Severance Multiple, whichever is less. If Mr. Furr becomes covered under another employer’s group health plan (other than a plan which imposes a pre-existing condition exclusion which applies to Mr. Furr) during this applicable period of COBRA continuation coverage, the Company’s COBRA premium payments will cease.

The summary of the material terms of the Offer Letter set forth above is qualified in its entirety by reference to the Offer Letter, a copy of which is attached as Exhibit 10.1 to this Report and incorporated herein by reference. The summary of material terms of the Change of Control Plan set forth above is qualified in its entirety by reference to the Change of Control Plan, a copy of which is incorporated by reference as Exhibit 10.2 to this Report and incorporated herein by reference.

Mr. Furr served as President and Chief Operating Officer of Sanmina-SCI Corporation, an electronics manufacturing services company, from March 1996 to October 2005 and as a director of Sanmina from December 1999 until October 2005. From 1992 until March 1996, Mr. Furr served as Vice President and Chief Financial Officer of Sanmina. Mr. Furr is a certified public accountant and holds a B.A. in Business Administration from the University of Oklahoma. Mr. Furr is 51 years old.

There is no arrangement or understanding between Mr. Furr and any other person pursuant to which Mr. Furr is to be selected as an executive officer of the Company that would require disclosure under Item 401(b) of Regulation S-K. Additionally, there is no family relationship between Mr. Furr and any other person that would require disclosure under Item 401(d) of Regulation S-K. Mr. Furr is also not a party to any transactions that would require disclosure under Item 404(a) of Regulation S-K.

Section 9 – Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits.

(d)Exhibits

Exhibit Number	Exhibit Description	Incorporated by Reference			Filed Herewith
		Form	Date	Number
10.1	Offer Letter between Adobe Systems Incorporated and Randy Furr, dated May 15, 2006				ý
10.2	Adobe Executive Severance Plan in the Event of a Change of Control	10-K	2/21/02	10.80
99.1	Press Release issued on May 18, 2006				ý

3

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ADOBE SYSTEMS INCORPORATED
Date: May 22, 2006	By:	/s/ KAREN O. COTTLE
		Karen O. Cottle Senior Vice President, General Counsel and Secretary

4

EXHIBIT INDEX

Exhibit Number	Exhibit Description	Incorporated by Reference			Filed Herewith
		Form	Date	Number
10.1	Offer Letter between Adobe Systems Incorporated and Randy Furr, dated May 15, 2006				ý
10.2	Adobe Executive Severance Plan in the Event of a Change of Control	10-K	2/21/02	10.80
99.1	Press Release issued on May 18, 2006				ý

5

EX-10.1

Exhibit 10.1

May 15, 2006

Randy Furr

Dear Randy:

On behalf of Adobe Systems Incorporated, I am pleased to offer you the position of Chief Financial Officer & Executive Vice President, reporting to me, as CEO. We recognize that employees are at the core of our success, and we look forward to having you join the other highly qualified and motivated individuals who work at Adobe. The base compensation for this exempt position will be $41,666.67 per month ($500,000.00 annually).

Because Adobe inspires employees to contribute at peak performance and share in the success of the company, you will be offered the opportunity to purchase 300,000 shares of Common Stock under the Adobe Equity Incentive Plan. These shares and the price at which you would be able to purchase them are subject to the approval of the Board of Directors and to the terms of the Plan, and the price will be established on June 19  or your actual hire date, if later than June 19, 2006. As Adobe has Director and Officer Stock Ownership Guidelines in place, each Senior Vice President should hold twenty-five (25%) of the net shares acquired, after deducting shares sold to cover the exercise price and withheld taxes for two years, unless, following the sale of these shares, the total number of Adobe shares held by you equals or exceeds 25,000 shares. It should be noted that these guidelines exclude shares acquired through Adobe’s Employee Stock Purchase Plan. You also have the opportunity to participate in Adobe’s US Change of Control program.

To promote the successful integration of Macromedia and Adobe, you will be participating in Adobe’s 2006 Performance Share program, a copy of the Program Summary is attached. You will be granted a target award of 20,000 performance shares that vest after the completion of Adobe’s fiscal year 2007 based on the achievement of specific performance metrics outlined in the attached Program Summary. Based on achievement of the performance metrics, you could earn between 0% and 150% of your target award.

You will also qualify for an Annual Incentive Plan (AIP) bonus of up to 75% of your annual base salary per year. You are eligible to receive Annual Incentive Plan (AIP) payments if you are employed at Adobe for the full eligibility period and the Company achieves its budgeted operating profit and revenue during that fiscal year and individual goals are achieved. The AIP eligibility period for FY 2006 is defined as December 5, 2005 through the last U.S. business day in November 2006. AIP bonuses will be prorated if you are hired on or before September 4, 2006.

In addition, all of our employees are eligible to participate in a corporate profit sharing plan, which pays up to 10% of your base salary. You are eligible to receive the quarterly profit sharing payments if you are employed at Adobe for the full eligibility period and the Company achieves its budgeted operating profit during that fiscal quarter. The eligibility period for Q2 is defined as March 6, 2006 through June 2, 2006.

Sign-on Bonus: Should you accept this employment offer, you will receive a sign-on bonus of $100,000.00 (less appropriate withholding taxes).

Enclosed you will find an Employee Input Sheet, W-4 and an Employee Inventions and Proprietary Rights Assignment Agreement. You will be required to sign the Employee Inventions and Proprietary Rights Assignment Agreement as a condition of your employment. Please complete and mail the enclosed documents, along with your signed offer letter, to the Human Resources Department. We appreciate the prompt return of the requested documents so we will be able to have your information ready when you arrive.

Upon your date of hire, you will be eligible to take advantage of our comprehensive benefits package, which includes your choice of medical and dental plans, vision care, life insurance and disability coverage as well as health care, dependent care reimbursement accounts, and much more. You may also participate in Adobe’s 401(k) Retirement Savings Plan and the Employee Stock Purchase Plan. A benefit summary outlining all of our benefits is included with this offer letter.

In accordance with the requirements of the Immigration Reform and Control Act of 1986, you will be required to provide verification of your identity and legal right to work in the United States. Employment with Adobe is for no specified period and may be terminated by you or the company at any time. This letter, along with any agreements relating to proprietary rights between you and Adobe, set forth the terms of your employment with Adobe and supersede any prior representations or agreements, whether written or oral. This letter may not be modified or amended except by a written agreement, signed by Adobe and by you.

Upon acceptance of our offer, please sign and return this letter in the envelope provided ASAP. (In order to have your systems set up for your first day, all documents must be received 5 full business days prior to your start date.) If you have any questions regarding the details of this offer, please contact Donna Morris at (408) 536-2066. This offer will be valid until May 19, 2006.

Randy, welcome to the Adobe team. We are proud of the company we have built and are confident you will soon discover why it’s simply better at Adobe. We look forward to your contributions to Adobe’s ongoing success.

Sincerely,

  /s/ Bruce Chizen

Bruce Chizen

CEO

I accept this offer and I understand that I am required to sign and return the enclosed Employee Inventions and Proprietary Rights Assignment Agreement before starting employment with Adobe Systems.

  /s/ Randy Furr

Signature

   5/16/06

Accept Date

   5/30/06

Start Date

EX-99.1

Exhibit 99.1

Jodi Warner
Adobe Systems Incorporated
408-536-2084
jwarner@adobe.com

Mike Saviage
Adobe Systems Incorporated
408-536-4416
ir@adobe.com

Adobe Names New Chief Financial Officer

Former Sanmina-SCI Executive Randy Furr to Join Adobe Executive Team

SAN JOSE, Calif. — May 18, 2006 — Adobe Systems Incorporated (Nasdaq:ADBE) today announced Randy Furr will be named executive vice president and chief financial officer. Most recently, Furr served as president and chief operating officer of Sanmina-SCI Corporation, a leading global electronics manufacturing services company.

Furr brings nearly 30 of years experience in financial and operations management in the technology sector, including 13 years at Sanmina-SCI, which he joined in 1992 as executive vice president and chief financial officer. He was instrumental in implementing rigorous financial controls and cost efficiencies as well as corporate governance compliance. Prior to joining Sanmina-SCI, Furr held a variety of operational and financial management positions with General Signal Corporation. These included general manager of General Signal Thinfilm Company, a manufacturer of semiconductor capital equipment, and general manager of Arrow Engineering, a manufacturer of equipment for the oil and gas industry. He began his career in 1976 in public accounting. Furr is a certified public accountant and holds a bachelor’s of business administration degree from the University of Oklahoma.

Reporting to Adobe Chief Executive Officer Bruce Chizen, Furr will start on May 30, 2006, assuming responsibility for the company’s finance, investor relations, information services, purchasing, facilities, global supply chain management and order management organizations. Furr will succeed Murray Demo as Adobe’s chief financial officer.

“Randy brings the expertise and track record of a successful CFO, along with the hands-on business experience of a seasoned operations executive,” said Chizen. “This strong combination of skills and experience will be an important addition to Adobe’s executive management team and will support his success as CFO of a fast-growing, global, highly-competitive company like Adobe.”

About Adobe Systems Incorporated

Adobe revolutionizes how the world engages with ideas and information – anytime, anywhere and through any medium. For more information, visit www.adobe.com.

###

© 2006 Adobe Systems Incorporated. All rights reserved. Adobe and the Adobe logo are either registered trademarks or trademarks of Adobe Systems Incorporated in the United States and/or other countries. All other trademarks are the property of their respective owners.