def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
Symantec Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of its
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20330 Stevens Creek Blvd.
Cupertino, California 95014
Dear Stockholder:
You are cordially invited to attend the 2008 Annual Meeting of
Stockholders of Symantec Corporation to be held at
Symantecs World Headquarters, 20330 Stevens Creek
Boulevard, Cupertino, California 95014, on Monday,
September 22, 2008, at 9:00 a.m. (Pacific time). For
your convenience, we are pleased to offer a live and re-playable
webcast of the annual meeting on our website at
www.symantec.com/invest. If you cannot attend the annual
meeting, you may vote over the Internet or by telephone or, if
you received a paper copy of the proxy materials, you can follow
the instructions on the proxy card.
At this years annual meeting, the agenda includes the
annual election of directors, amendment and restatement of our
2004 Equity Incentive Plan, adoption of our 2008 Employee Stock
Purchase Plan, approval of the material terms of the amended and
restated Senior Executive Incentive Plan and ratification of the
selection of KPMG LLP as our independent registered public
accounting firm for the current fiscal year. The Board of
Directors recommends that you vote FOR the election of
the director nominees, FOR the amendment and restatement
of our 2004 Equity Incentive Plan, FOR the adoption of
our 2008 Employee Stock Purchase Plan, FOR approval of
the material terms of the amended and restated Symantec Senior
Executive Incentive Plan and FOR the ratification of the
selection of KPMG LLP as our independent registered public
accounting firm for the current fiscal year. Please refer to the
proxy statement for detailed information on each of the
proposals and the annual meeting.
We are also pleased to take advantage of the new Securities and
Exchange Commission rules allowing issuers to furnish proxy
materials over the Internet. We believe the new rules will allow
us to provide our stockholders with the information they need,
while lowering the costs of the delivery of the materials and
reducing the environmental impact of printing and mailing hard
copies. Stockholders may help us to reduce costs further by
opting to receive future proxy materials by
e-mail.
Each share of stock that you own represents one vote, and your
vote as a stockholder of Symantec is very important. For
questions regarding your stock ownership, you may contact
Investor Relations at (408) 517-8324 or, if you are a registered
holder, our transfer agent, Computershare Investor Services, by
email through their website at
www.computershare.com/contactus or by phone at
(877) 282-1168
(within the U.S. and Canada) or
(781) 575-2879
(outside the U.S. and Canada).
Sincerely yours,
John W. Thompson
Chairman of the Board of Directors and
Chief Executive Officer
20330 Stevens Creek Blvd.
Cupertino, California 95014
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
To be held on:
September 22, 2008
9:00 a.m. Pacific Time
To Our Stockholders:
You are cordially invited to attend our 2008 Annual Meeting of
Stockholders, which will be held at 9:00 a.m. (Pacific
time) on Monday, September 22, 2008, at Symantec
Corporations World Headquarters, 20330 Stevens Creek
Boulevard, Cupertino, California 95014. For your convenience, we
are pleased to offer a live and re-playable webcast of the
annual meeting at www.symantec.com/invest.
We are holding the annual meeting for the following purposes,
which are more fully described in the proxy statement:
1. To elect ten directors to Symantecs Board of
Directors, each to hold office until the next annual meeting of
stockholders and until his or her successor is elected and
qualified or until his or her earlier resignation or removal;
2. To approve the amendment and restatement of our 2004
Equity Incentive Plan, including the reservation of an
additional 50,000,000 shares for issuance thereunder;
3. To approve the adoption of our 2008 Employee Stock
Purchase Plan, including the reservation of
20,000,000 shares for issuance thereunder;
4. To approve the material terms of the amended and
restated Symantec Senior Executive Incentive Plan to preserve
the deductibility under federal tax rules of awards made under
the plan;
5. To ratify the selection of KPMG LLP as Symantecs
independent registered public accounting firm for the 2009
fiscal year; and
6. To transact such other business as may properly come
before the meeting or any adjournment or postponement thereof.
Only stockholders of record as of the close of business on
July 24, 2008 are entitled to notice of and will be
entitled to vote at the annual meeting or any postponements or
adjournment thereof. For 10 days prior to the annual
meeting, a list of stockholders entitled to vote will be
available for inspection at our World Headquarters. If you would
like to view this stockholder list, please contact Investor
Relations at
(408) 517-8324.
BY ORDER OF THE BOARD OF DIRECTORS
Arthur F. Courville
Executive Vice President, General
Counsel and Secretary
Cupertino, California
July 28, 2008
Every stockholder vote is important. To assure that your
shares are represented at the annual meeting, please vote over
the Internet or by telephone, whether or not you plan to attend
the meeting. If you received a paper proxy card and voting
instructions by mail, you may vote your shares by completing,
dating and signing the enclosed proxy and mailing it promptly in
the postage-paid envelope provided, whether or not you plan to
attend the meeting. You may revoke your proxy at any time before
it is voted.
INTERNET
AVAILABILITY OF PROXY MATERIALS
Under rules recently adopted by the U.S. Securities and
Exchange Commission (the SEC), we are
furnishing proxy materials to our stockholders primarily via the
Internet, instead of mailing printed copies of those materials
to each stockholder. On or about August 11, 2008, we expect
to send to our stockholders (other than those who previously
requested electronic or paper delivery) a Notice of Internet
Availability of Proxy Materials (Notice of Internet
Availability) containing instructions on how to access our
proxy materials, including our proxy statement and our annual
report. The Notice of Internet Availability also instructs you
on how to access your proxy card to vote through the Internet or
by telephone.
This new process is designed to expedite stockholders
receipt of proxy materials, lower the cost of the annual
meeting, and help conserve natural resources. If you previously
elected to receive our proxy materials electronically, you will
continue to receive these materials via
e-mail
unless you elect otherwise. However, if you would prefer to
receive printed proxy materials, please follow the instructions
included in the Notice of Internet Availability.
TABLE OF
CONTENTS
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SYMANTEC
CORPORATION
2008 ANNUAL MEETING OF STOCKHOLDERS
PROXY
STATEMENT
Information
About Solicitation and Voting
The accompanying proxy is solicited on behalf of Symantec
Corporations Board of Directors (the
Board) for use at Symantecs 2008 Annual
Meeting of Stockholders, to be held at Symantecs World
Headquarters, 20330 Stevens Creek Boulevard, Cupertino,
California 95014 on Monday, September 22, 2008, at
9:00 a.m. (Pacific time), and any adjournment or
postponement thereof. The company will provide a live and
re-playable webcast of the 2008 annual meeting, which will be
available on the events section of our investor relations
website at www.symantec.com/invest.
On or about August 11, 2008, we expect to send most of our
stockholders a Notice of Internet Availability containing
instructions on how to access proxy materials, including this
proxy statement and our annual report for our 2008 fiscal year.
Stockholders who previously requested paper delivery will
receive the proxy materials by mail, which we also expect to
mail on or about August 11, 2008. The Notice of Internet
Availability provides instructions on how to access the proxy
card and vote over the Internet or by telephone. This proxy
statement contains important information for you to consider
when deciding how to vote on the matters brought before the
annual meeting. Please read it carefully.
About the
Annual Meeting
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What is the purpose of the annual meeting? |
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At our annual meeting, stockholders will act upon the proposals
described in this proxy statement. In addition, following the
meeting, management will report on the performance of Symantec
and respond to questions from stockholders. |
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What proposals are scheduled to be voted on at the
meeting? |
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There are five proposals scheduled for a vote. The proposals are: |
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Proposal No. 1: To elect ten directors to
the Board, each to hold office until the next annual meeting of
stockholders and until his or her successor is elected and
qualified or until his or her earlier resignation or removal.
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Proposal No. 2: To approve the amendment
and restatement of our 2004 Equity Incentive Plan, including the
reservation of an additional 50,000,000 shares for issuance
thereunder.
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Proposal No. 3: To approve the adoption of
our 2008 Employee Stock Purchase Plan, including the reservation
of 20,000,000 shares for issuance thereunder.
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Proposal No. 4: To approve the material
terms of the amended and restated Symantec Senior Executive
Incentive Plan to preserve the deductibility under federal tax
rules of awards made under the plan.
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Proposal No. 5: To ratify the selection of
KPMG LLP (KPMG) as Symantecs
independent registered public accounting firm for the 2009
fiscal year.
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Q. 3. |
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What is the recommendation of the Board on each of the
proposals scheduled to be voted on at the meeting? |
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The Board recommends that you vote FOR each of the
nominees to the Board (Proposal 1) and FOR each
of the other proposals scheduled to be voted on at the meeting
(Proposals 2, 3, 4 and 5). |
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Q. 4. |
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Who can vote at the meeting? |
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Stockholders as of the record date for the meeting,
July 24, 2008, are entitled to vote at the meeting. At the
close of business on the record date, there were outstanding and
entitled to vote 837,973,128 shares of Symantec common
stock. |
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Stockholder of Record: Shares Registered in Your
Name |
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If on July 24, 2008, your shares were registered directly
in your name with our transfer agent, Computershare Investor
Services, then you are considered the stockholder of record with
respect to those shares, and these proxy materials are being
sent directly to you by Broadridge ICS on our behalf. As a
stockholder of record, you may vote in person at the meeting or
vote by proxy. Whether or not you plan to attend the meeting, we
urge you to vote over the Internet or by telephone, or if you
received a paper proxy material by mail, by filling out and
returning the proxy card. |
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Beneficial Owner: Shares Registered in the Name of a
Broker or Nominee |
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If on July 24, 2008, your shares were held in an account
with a brokerage firm, bank or other nominee, then you are the
beneficial owner of the shares held in street name, and these
proxy materials are being forwarded to you by that organization.
As a beneficial owner, you have the right to direct your nominee
on how to vote the shares held in your account, and it has
enclosed or provided voting instructions for you to use in
directing it on how to vote your shares. However, the
organization that holds your shares is considered the
stockholder of record for purposes of voting at the meeting.
Because you are not the stockholder of record, you may not vote
your shares in person at the meeting unless you request and
obtain a valid proxy from the organization that holds your
shares giving you the right to vote the shares at the meeting. |
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How do I vote? |
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If you are a stockholder of record, you may: |
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vote in person we will provide a ballot
to stockholders who attend the annual meeting and wish to vote
in person;
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vote via the Internet or via telephone
in order to do so, please follow the instructions shown on your
Notice of Internet Availability or proxy card; or
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vote by mail if you received a paper
proxy card and voting instructions by mail, simply complete,
sign and date the enclosed proxy card and return it before the
meeting in the envelope provided.
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Votes submitted via the Internet or by telephone must be
received by 11:59 p.m., Eastern time, on September 19,
2008. Submitting your proxy, whether via the Internet, by
telephone or by mail if you received a paper proxy card, will
not affect your right to vote in person should you decide to
attend the meeting. |
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You may either vote For all of the nominees to the
Board, or you may withhold your vote from any nominee you
specify. For any other matter to be voted on, you may vote
For or Against or Abstain
from voting. |
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Your vote is important. Whether or not you plan to attend the
meeting, we urge you to vote by proxy to ensure that your vote
is counted. You may still attend the meeting in person if you
have already voted by proxy. |
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How many votes do I have? |
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You are entitled to one vote for each share of Symantec common
stock held as of July 24, 2008, the record date. |
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What is the quorum requirement for the meeting? |
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A majority of our outstanding shares as of the record date must
be present at the meeting in order to hold the meeting and
conduct business. This presence is called a quorum. Your shares
are counted as present at the meeting if you are present and
vote in person at the meeting or if you have properly submitted
a proxy. |
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Abstentions (i.e., if you or your broker mark
ABSTAIN on a proxy card) and broker
non-votes will be considered to be shares present at
the meeting for purposes of determining whether a quorum is
present. Broker non-votes occur when shares held by a broker for
a beneficial owner are not voted with respect to a particular
proposal and generally occur because: (1) the broker does
not receive voting instructions from the beneficial owner and
(2) the broker lacks discretionary authority to vote the
shares. Banks and brokers do not have discretionary authority to
vote on their clients behalf on non-routine
proposals. |
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For the purpose of determining whether stockholders have
approved a particular proposal, abstentions are treated as
shares present or represented and voting. Broker non-votes are
not counted or deemed to be present or represented for the
purpose of determining whether stockholders have approved a
particular proposal, though they are counted toward the presence
of a quorum as discussed above. |
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What is the vote required for each proposal? |
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The votes required to approve each proposal are as follows: |
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Proposal No. 1 (Election of
Directors). Directors will be elected by a
plurality of the votes of the shares present in person or
represented by proxy at the meeting and entitled to vote in the
election of directors. Abstentions and broker non-votes are not
taken into account in determining the outcome of the election of
directors.
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Approval of Proposal Nos.
2-5. Approval of each of the Proposals 2, 3,
4 and 5 requires the affirmative vote by holders of at least a
majority of the shares of Symantec common stock entitled to vote
thereon who attend the meeting in person or are represented at
the meeting by proxy. Abstentions will have the effect of a vote
against each such proposal, while broker non-votes will not be
taken into account in determining the outcome of the vote on
these proposals.
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What if I return a proxy card but do not make specific
choices? |
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All proxies will be voted in accordance with the instructions
specified on the proxy card. If you received a Notice of
Internet Availability, please follow the instructions included
on the notice on how to access your proxy card and vote over the
Internet or by telephone. If you sign a physical proxy card and
return it without instructions as to how your shares should be
voted on a particular proposal at the meeting, your shares will
be voted in accordance with the recommendations of our Board
stated in Q.3 above. |
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If you do not vote and you hold your shares in street name, and
your broker does not have discretionary power to vote your
shares, your shares may constitute broker non-votes
(described in Q.7 above) and will not be counted in
determining the number of shares necessary for approval of the
proposals. However, shares that constitute broker non-votes will
be counted for the purpose of establishing a quorum for the
meeting. Voting results will be tabulated and certified by the
inspector of elections appointed for the meeting. |
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Who is paying for this proxy solicitation? |
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The expenses of soliciting proxies will be paid by Symantec.
Following the original mailing of the proxies and other
soliciting materials, Symantec and its agents may solicit
proxies by mail, electronic mail, telephone, facsimile, by other
similar means, or in person. Our directors, officers, and other
employees, without additional compensation, may also solicit
proxies personally or in writing, by telephone,
e-mail, or
otherwise. Following the original mailing of the proxies and
other soliciting materials, Symantec will request brokers,
custodians, nominees and other record holders to forward copies
of the proxy and other soliciting materials to persons for whom
they hold shares and to request authority for the exercise of
proxies. In such cases, Symantec, upon the request of the record
holders, will reimburse such holders for |
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their reasonable expenses. If you choose to access the proxy
materials and/or vote over the Internet, you are responsible for
any Internet access charges you may incur. |
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Q. 11. |
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What does it mean if I receive more than one proxy card or
Notice of Internet Availability? |
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If you receive more than one proxy card or Notice of Internet
Availability, your shares are registered in more than one name
or are registered in different accounts. To make certain all of
your shares are voted, please follow the instructions included
on the Notice of Internet Availability on how to access each
Proxy card and vote each proxy card over the Internet or by
telephone. If you received paper proxy materials by mail, please
complete, sign and return each proxy card to ensure that all of
your shares are voted. |
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Q. 12. |
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How can I change my vote after submitting my proxy? |
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A stockholder who has given a proxy may revoke it at any time
before it is exercised at the meeting by: |
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delivering to the Corporate Secretary of Symantec
(by any means, including facsimile) a written notice stating
that the proxy is revoked;
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signing and delivering a proxy bearing a later date;
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voting again over the Internet or by telephone; or
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attending the meeting and voting in person (although
attendance at the meeting will not, by itself, revoke a proxy).
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Please note, however, that if your shares are held of record by
a broker, bank or other nominee and you wish to revoke a proxy,
you must contact that firm to revoke any prior voting
instructions. Also, if your shares are held of record by a
broker, bank or other nominee and you wish to vote at the
meeting, you must bring to the meeting a letter from the broker,
bank or other nominee confirming your beneficial ownership of
the shares to be voted. |
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Q. 13. |
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Why did I receive a one-page notice in the mail regarding the
Internet availability of proxy materials this year instead of a
full set of proxy materials? |
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Pursuant to the new rules recently adopted by the SEC, we have
provided access to our proxy materials over the Internet.
Accordingly, we are sending a Notice of Internet Availability to
our stockholders of record and beneficial owners. All
stockholders will have the ability to access the proxy materials
on a website referred to in the Notice of Internet Availability
or request to receive a printed set of the proxy materials.
Instructions on how to access the proxy materials over the
Internet or to request a printed copy may be found on the Notice
of Internet Availability. In addition, stockholders may request
to receive proxy materials in printed form by mail or
electronically by email on an ongoing basis. |
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Q. 14. |
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How can I get electronic access to the proxy materials? |
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The Notice of Internet Availability will provide you with
instructions regarding how to: |
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view our proxy materials for the annual meeting over
the Internet; and
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instruct us to send our future proxy materials to
you electronically by email.
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Choosing to receive your future proxy materials by email will
save us the cost of printing and mailing documents to you and
will reduce the impact of our annual stockholders meetings
on the environment. If you choose to receive future proxy
materials by email, you will receive an email next year with
instructions containing a link to those materials and a link to
the proxy voting site. Your election to receive proxy materials
by email will remain in effect until you terminate it. |
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Q. 15. |
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Where can I find the voting results? |
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The preliminary voting results will be announced at the annual
meeting and posted on our website at
www.symantec.com/invest. The final results will be
published in our quarterly report on
Form 10-Q
for the second quarter of fiscal year 2009. |
4
CORPORATE
GOVERNANCE STANDARDS AND DIRECTOR INDEPENDENCE
Symantec is strongly committed to good corporate governance
practices. These practices provide an important framework within
which our Board and management can pursue our strategic
objectives and ensure our long-term vitality for the benefit of
our stockholders.
Corporate
Governance Standards
Corporate governance standards generally specify the
distribution of rights and responsibilities of the Board,
management and stockholders, and spell out the rules and
procedures for making decisions on corporate affairs. In
general, the stockholders elect the Board and vote on certain
extraordinary matters; the board is responsible for the general
governance of the company, including selection of key
management; and management is responsible for running the
day-to-day
operations of the company.
Our corporate governance standards are available on the Investor
Relations section of our website, which is located at
www.symantec.com/invest, by clicking on Company
Charters, under Corporate Governance. These
corporate governance standards are reviewed at least annually by
our Nominating and Governance Committee, and changes are
recommended to our Board for approval as appropriate. The
fundamental premise of our Board-level corporate governance
standards is the independent nature of our Board and its
responsibility to our stockholders.
Board
Independence
Through its continued listing requirements for companies with
securities listed on the NASDAQ Global Select Market, the NASDAQ
Stock Market (NASDAQ) requires that a
majority of the members of our Board be independent, as defined
under NASDAQs Marketplace Rules. Currently, each member of
our Board, other than our Chief Executive Officer, John W.
Thompson, is an independent director and all standing committees
of the Board are composed entirely of independent directors, in
each case under NASDAQs independence definition. The
NASDAQ independence definition includes a series of objective
tests, such as that the director is not an employee of the
company and has not engaged in various types of business
dealings with the company. In addition, as further required by
NASDAQ rules, the Board has made a subjective determination as
to each independent director that no relationship exists which,
in the opinion of the Board, would interfere with the exercise
of independent judgment in carrying out the responsibilities of
a director. In making these determinations, the directors
reviewed and discussed information provided by the directors and
the company with regard to each directors business and
other activities as they may relate to Symantec and our
management. Based on this review and consistent with our
independence criteria, the Board has affirmatively determined
that the following directors are independent: Michael A. Brown,
William T. Coleman, Frank E. Dangeard, Geraldine B. Laybourne,
David L. Mahoney, Robert S. Miller, George Reyes, Daniel H.
Schulman, and V. Paul Unruh.
Board
Structure and Meetings
The Board and its committees meet throughout the year on a set
schedule, and also hold special meetings and act by written
consent from time to time. After each regularly scheduled Board
meeting, the independent members of our Board hold a separate
closed meeting, referred to as an executive session,
which is generally led by the Lead Independent Director. These
executive sessions are used to discuss such topics as the
independent directors deem necessary or appropriate. At least
annually, the independent directors will hold an executive
session to evaluate the Chief Executive Officers
performance and compensation.
The Board held a total of seven meetings during the fiscal year
ended March 28, 2008. During this time, no directors
attended fewer than 75% of the aggregate of the total number of
meetings held by the Board and the total number of meetings held
by all committees of the Board on which such director served
(during the period which such director served).
Agendas and topics for Board and committee meetings are
developed through discussions between management and members of
the Board and its committees. Information and data that is
important to the issues to be
5
considered are distributed in advance of each meeting. Board
meetings and background materials focus on key strategic,
operational, financial, governance and compliance matters
applicable to us, including the following:
|
|
|
|
|
Reviewing annual and longer-term strategic and business plans;
|
|
|
|
Reviewing key product, industry and competitive issues;
|
|
|
|
Reviewing and determining the independence of our directors;
|
|
|
|
Reviewing and determining the qualifications of directors to
serve as members of committees, including the financial
expertise of members of the Audit Committee;
|
|
|
|
Selecting and approving director nominees;
|
|
|
|
Selecting, evaluating and compensating the Chief Executive
Officer;
|
|
|
|
Reviewing and discussing succession planning for the senior
management team, and for lower management levels to the extent
appropriate;
|
|
|
|
Reviewing and approving material investments or divestitures,
strategic transactions and other significant transactions that
are not in the ordinary course of business;
|
|
|
|
Evaluating the performance of the Board;
|
|
|
|
Overseeing our compliance with legal requirements and ethical
standards; and
|
|
|
|
Overseeing our financial results.
|
The Board and its committees are free to engage independent
outside financial, legal and other advisors as they deem
necessary to provide advice and counsel on various topics or
issues, and are provided full access to our officers and
employees.
The Lead Independent Director of the Board is chosen by the
independent directors of the Board, and has the general
responsibility to preside at all meetings of the Board when the
Chairman is not present and executive sessions of the Board
without management present. Mr. Miller has served as the
Lead Independent Director since April 22, 2003.
An evaluation of Board operations and performance is conducted
annually by the Nominating and Governance Committee to enhance
Board effectiveness. Changes are recommended by the Nominating
and Governance Committee for approval by the full Board as
appropriate.
Code of
Conduct and Code of Ethics
We have adopted a code of conduct that applies to all Symantec
employees, officers and directors. We have also adopted a code
of ethics for our Chief Executive Officer and senior financial
officers, including our principal financial officer and
principal accounting officer. Our Code of Conduct and
Code of Ethics for Chief Executive Officer and Senior
Financial Officers are posted on the Investor Relations
section of our website, which is located at
www.symantec.com/invest, by clicking on Company
Charters, under Corporate Governance. We
intend to post or disclose at that location any amendments to or
waivers from any provision of our Code of Conduct and
Code of Ethics for Chief Executive Officer and Senior
Financial Officers that both applies to any of our executive
officers or directors and relates to any element of the code of
ethics, as defined under Item 406 of
Regulation S-K.
6
BOARD
COMMITTEES AND THEIR FUNCTIONS
There are three primary committees of the Board: the Audit
Committee, Compensation Committee and Nominating and Governance
Committee. The Board has delegated various responsibilities and
authorities to these different committees, as described below
and in the committee charters. The Board committees regularly
report on their activities and actions to the full Board. Each
member of the Audit Committee, Compensation Committee and
Nominating and Governance Committee was appointed by the Board.
Each of the Board committees has a written charter approved by
the Board and available on our website at
www.symantec.com/invest, by clicking on Company
Charters, under Corporate Governance.
Audit
Committee
|
|
|
Members: |
|
David L. Mahoney
Robert S. Miller
George Reyes
V. Paul Unruh (Chair) |
|
Number of Meetings in Fiscal Year 2008: |
|
8 |
|
Independence: |
|
Each member is an independent director as defined by current
NASDAQ listing standards for Audit Committee membership. |
|
Functions: |
|
To oversee our accounting and financial reporting processes and
the audits of our financial statements, including oversight of
our systems of internal controls and disclosure controls and
procedures, compliance with legal and regulatory requirements,
internal audit function and the appointment and compensation of
our independent registered public accounting firm; |
|
|
|
To review and evaluate the independence and performance of our
independent registered public accounting firm; and |
|
|
|
To facilitate communication among our independent registered
public accounting firm, our financial and senior management and
our Board. |
|
Financial Experts: |
|
Our Board has unanimously determined that all Audit Committee
members are financially literate under current NASDAQ listing
standards, and at least one member has financial sophistication
under NASDAQ listing standards. In addition, our Board has
unanimously determined that George Reyes and V. Paul Unruh each
qualify as an audit committee financial expert under
SEC rules and regulations. Designation as an audit
committee financial expert is an SEC disclosure
requirement and does not impose any additional duties,
obligations or liability on any person so designated than those
generally imposed on members of the Audit Committee and the
Board. |
Compensation
Committee
|
|
|
Members: |
|
Michael A. Brown
William T. Coleman
Geraldine B. Laybourne (joined Committee in January 2008)
David L. Mahoney
Daniel H. Schulman (Chair) |
|
Number of Meetings in Fiscal Year 2008: |
|
7 |
|
Independence: |
|
Each member is an independent director as defined by current
NASDAQ listing standards. |
7
|
|
|
Functions: |
|
To review and recommend to the independent directors of our
Board all compensation arrangements for our Chief Executive
Officer; |
|
|
|
To review and approve all compensation arrangements for our
other executive officers; |
|
|
|
To review the overall strategy for employee compensation; |
|
|
|
To administer our equity incentive plans; |
|
|
|
To review and recommend to the Board compensation for
non-employee members of the Board; |
|
|
|
To review and discuss with management the companys
disclosures under the caption Compensation Discussion and
Analysis for use in our proxy statements and reports filed
with the SEC; and |
|
|
|
To produce an annual report on executive compensation for use in
our proxy statement. |
The Compensation Committee retains Mercer, an outside consulting
firm, to provide advice and ongoing recommendations on executive
compensation matters. The Compensation Committee consulted with
Mercer on certain executive compensation matters during fiscal
year 2008. As the Compensation Committee requested and to assist
the Compensation Committee as it made decisions with respect to
compensation matters, Mercer provided certain qualitative and
quantitative information regarding compensatory practices in the
market for executive talent, analyzed existing Symantec
executive compensation arrangements, and was available to the
Committee to provide technical and other information it
requested in connection with performing its function throughout
the fiscal year. Mercers role during fiscal year 2008 is
further discussed in the Compensation Discussion &
Analysis section (beginning on page 42).
Nominating
and Governance Committee
|
|
|
Members: |
|
Michael A. Brown (Chair)
Frank E. Dangeard
Robert S. Miller
Daniel H. Schulman
V. Paul Unruh |
|
Number of Meetings in Fiscal Year 2008: |
|
4 |
|
Independence: |
|
Each member is an independent director as defined by current
NASDAQ listing standards. |
|
Functions: |
|
To identify, consider and nominate candidates for membership on
our Board; |
|
|
|
To develop, recommend and evaluate corporate governance
standards and a code of business conduct and ethics applicable
to our company; |
|
|
|
To implement and oversee a process for evaluating our Board,
Board committees (including the Nominating and Governance
Committee) and oversee our Boards evaluation of our Chief
Executive Officer; |
|
|
|
To make recommendations regarding the structure and composition
of our Board and Board committees; and |
|
|
|
To advise the Board on corporate governance matters. |
8
DIRECTOR
NOMINATIONS AND COMMUNICATION WITH DIRECTORS
Criteria
for Nomination to the Board
The Nominating and Governance Committee will consider candidates
submitted by Symantec stockholders, as well as candidates
recommended by directors and management, for nomination to the
Board. The goal of the Nominating and Governance Committee is to
assemble a Board that offers a variety of perspectives,
knowledge and skills derived from high-quality business and
professional experience. The Nominating and Governance Committee
annually reviews the appropriate skills and characteristics
required of directors in the context of the current composition
of the Board, our operating requirements and the long-term
interests of our stockholders. The Nominating and Governance
Committee has generally identified nominees based upon
suggestions by outside directors, management and executive
recruiting firms.
Process
for Identifying and Evaluating Nominees
The Nominating and Governance Committee considers candidates by
first evaluating the current members of the Board who intend to
continue in service, balancing the value of continuity of
service with that of obtaining new perspectives, skills and
experience. If the Nominating and Governance Committee
determines that an opening exists, the Committee identifies the
desired skills and experience of a new nominee, including the
need to satisfy rules of the SEC and NASDAQ.
The Nominating and Governance Committee generally will evaluate
each candidate based on the extent to which the candidate
contributes to the range of talent, skill and expertise
appropriate for the Board generally, as well as the
candidates integrity, business acumen, diversity,
availability, independence of thought, and overall ability to
represent the interests of Symantecs stockholders. The
Nominating and Governance Committee does not assign specific
weights to particular criteria, and no particular criterion is
necessarily applicable to all prospective nominees. Although the
Nominating and Governance Committee uses these and other
criteria as appropriate to evaluate potential nominees, the
Committee has no stated minimum criteria for nominees. We have
from time to time engaged, for a fee, a search firm to identify
and assist the Nominating and Governance Committee with
identifying, evaluating and screening Board candidates for
Symantec and may do so in the future.
Stockholder
Proposals for Nominees
The Nominating and Governance Committee will consider potential
nominees properly submitted by stockholders. Stockholders
seeking to do so should provide the information set forth in our
corporate Bylaws regarding director nominations. The Committee
will apply the same criteria for candidates proposed by
stockholders as it does for candidates proposed by management or
other directors.
To be considered for nomination by the Nominating and Governance
Committee at next years annual meeting of stockholders,
submissions by security holders must be submitted by mail and
must be received by the Corporate Secretary no later than
April 13, 2009 to ensure adequate time for meaningful
consideration by the Committee. Each submission must include the
following information:
|
|
|
|
|
the full name and address of the candidate;
|
|
|
|
the number of shares of Symantec common stock beneficially owned
by the candidate;
|
|
|
|
a certification that the candidate consents to being named in
the proxy statement and intends to serve on the Board if
elected; and
|
|
|
|
biographical information, including work experience during the
past five years, other board positions, and educational
background, such as is provided with respect to nominees in this
proxy statement.
|
Information regarding requirements that must be followed by a
stockholder who wishes to make a stockholder nomination for
election to the Board for next years annual meeting is
described in this proxy statement under Additional
Information Stockholder Proposals for the 2009
Annual Meeting.
9
Contacting
the Board of Directors
Any stockholder who wishes to contact members of our Board may
do so by mailing written communications to:
Symantec Corporation
20330 Stevens Creek Boulevard
Cupertino, California 95014
Attn: Corporate Secretary
The Corporate Secretary will review all such correspondence and
provide regular summaries to the Board or to individual
directors, as relevant, will retain copies of such
correspondence for at least six months, and make copies of such
correspondence available to the Board or individual directors
upon request. Any correspondence relating to accounting,
internal controls or auditing matters will be handled in
accordance with Symantecs policy regarding accounting
complaints and concerns.
Attendance
of Board Members at Annual Meetings
The Board does not have a formal policy with respect to Board
member attendance at our annual meetings of stockholders, as
historically very few stockholders have attended Symantecs
annual meeting of stockholders. Five directors attended
Symantecs 2007 Annual Meeting of Stockholders in person or
by telephone.
10
PROPOSAL NO. 1
ELECTION
OF DIRECTORS
Our Board consists of ten directors, each of whom is nominated
for election at the 2008 annual meeting, including nine
independent directors and one member of our senior management.
Each director is elected to serve a one-year term, with all
directors subject to annual election. At the recommendation of
the Nominating and Governance Committee, the Board has nominated
the following ten persons to serve as directors for the term
beginning at the annual meeting on September 22, 2008:
Michael A. Brown, William T. Coleman, Frank E. Dangeard,
Geraldine B. Laybourne, David L. Mahoney, Robert S. Miller,
George Reyes, Daniel H. Schulman, John W. Thompson and
V. Paul Unruh. Ms. Laybourne was appointed to the Board in
October 2007 with such appointment to take effect on
January 1, 2008. Ms. Laybourne was recommended by the
Nominating and Governance Committee after one of our
non-management directors recommended her for its consideration.
Unless proxy cards are otherwise marked, the persons named as
proxies will vote all proxies FOR the election of each
nominee named in this section. Proxies submitted to Symantec
cannot be voted at the 2008 annual meeting for nominees other
than those nominees named in this proxy statement. However, if
any director nominee is unable or unwilling to serve at the time
of the annual meeting, the persons named as proxies may vote for
a substitute nominee designated by the Board. Alternatively, the
Board may reduce the size of the Board. Each nominee has
consented to serve as a director if elected, and the Board does
not believe that any nominee will be unwilling or unable to
serve if elected as a director. Each director will hold office
until the next annual meeting of stockholders and until his or
her successor has been duly elected and qualified or until his
or her earlier resignation or removal.
Nominees
for Director
The names of each nominee for director, their ages as of
July 4, 2008, and other information about each nominee is
shown below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Director
|
Nominee
|
|
Age
|
|
Principal Occupation
|
|
Since
|
|
John W. Thompson
|
|
|
59
|
|
|
Chairman of the Board of Directors and Chief Executive Officer
|
|
|
1999
|
|
Michael A. Brown
|
|
|
49
|
|
|
Director
|
|
|
2005
|
|
William T. Coleman
|
|
|
60
|
|
|
Founder, Chairman of the Board and Chief Executive Officer,
Cassatt Corporation
|
|
|
2003
|
|
Frank E. Dangeard
|
|
|
50
|
|
|
Former Chairman and Chief Executive Officer, Thomson S.A.
|
|
|
2007
|
|
Geraldine B. Laybourne
|
|
|
61
|
|
|
Founder and Former Chairman and
Chief Executive Officer, Oxygen Media
|
|
|
2008
|
|
David L. Mahoney
|
|
|
54
|
|
|
Director
|
|
|
2003
|
|
Robert S. Miller
|
|
|
66
|
|
|
Executive Chairman, Delphi Corporation
|
|
|
1994
|
|
George Reyes
|
|
|
54
|
|
|
Chief Financial Officer, Google Inc.
|
|
|
2000
|
|
Daniel H. Schulman
|
|
|
50
|
|
|
Chief Executive Officer, Virgin Mobile USA
|
|
|
2000
|
|
V. Paul Unruh
|
|
|
59
|
|
|
Director
|
|
|
2005
|
|
Mr. Thompson has served as Chairman of the Board and
Chief Executive Officer since April 1999, and as President from
April 1999 to January 2002. Mr. Thompson joined Symantec
after 28 years at International Business Machines
Corporation, a global information technology company, where he
held senior executive positions in sales, marketing and software
development. In his last assignment, he was general manager of
IBM Americas and a member of the companys Worldwide
Management Council. Mr. Thompson is a member of the board
of directors of Seagate Technology, Inc. and United Parcel
Service, Inc.
Mr. Brown was appointed to the Board in July 2005
following the acquisition of Veritas Software Corporation.
Mr. Brown had served on the Veritas board of directors
since 2003. Mr. Brown is currently the Chairman of Line 6,
Inc., a
11
provider of musical instruments, amplifiers and audio gear that
incorporate digital signal processing. From 1984 to 2002,
Mr. Brown held various senior management positions at
Quantum Corporation, a global storage company, most recently as
Chief Executive Officer from 1995 to 2002 and Chairman of the
Board from 1998 to 2003. Mr. Brown is a member of the board
of directors of Quantum Corporation, Nektar Therapeutics and one
private company.
Mr. Coleman was appointed to the Board in January
2003. Mr. Coleman is a Founder, Chairman of the Board and
Chief Executive Officer of Cassatt Corporation, a provider of
solutions to automate information technology operations.
Previously Mr. Coleman was co-founder of BEA Systems, Inc.,
an enterprise application and service infrastructure software
provider, where he served as Chairman of the Board from the
companys inception in 1995 until August 2002, Chief
Strategy Officer from October 2001 to August 2002, and Chief
Executive Officer from 1995 to October 2001. Mr. Coleman is
a member of the board of directors of Palm, Inc.
Mr. Dangeard joined the Board in January 2007.
Mr. Dangeard was the Chairman and Chief Executive Officer
of Thomson S.A., a provider of digital video technologies,
solutions and services, from September 2004 until
March 2008. From 2002 to September 2004, Mr. Dangeard
was Senior Executive Vice President of France Telecom, a global
telecommunications operator and non-executive Chairman of
Thomson. He joined Thomson in 1997 as Senior Executive Vice
President and became a member of the Thomson board of directors
in March 1999 and was appointed vice chairman in 2001. From 1989
to 1997, Mr. Dangeard was managing director of the
investment banking firm, SG Warburg & Co. Ltd (later
SBC Warburg) and from 1995, he was also chairman of SBC Warburg
(France). Prior to that, he was a lawyer at Sullivan &
Cromwell LLP in New York and London. Mr. Dangeard serves on
the board of Electricite de France and Sonae SGPS, S.A. He
graduated from the Ecole des Hautes Etudes Commerciales, from
the Paris Institut dEtudes Politiques and from Harvard Law
School.
Ms. Laybourne joined the Board in January 2008. Ms,
Laybourne founded Oxygen Media, a cable television network, in
1998 and served as its Chairman and Chief Executive Officer
until November 2007 when the network was acquired by NBC
Universal. Prior to founding Oxygen, Ms. Laybourne spent
16 years at Nickelodeon, a cable television network. From
1996 to 1998, Ms. Laybourne was President of Disney/ABC
Cable Networks, a cable television network, where she was
responsible for overseeing cable programming for the Walt Disney
Company and ABC. Ms. Laybourne is a member of the board of
directors of Insight Communications and Move.com and also serves
on the board of trustees of Vassar College. Ms. Laybourne
earned a Bachelor of Arts degree in art history from Vassar
College and a Master of Science degree in elementary education
from the University of Pennsylvania.
Mr. Mahoney was appointed to the Board in April
2003. Mr. Mahoney previously served as co-Chief Executive
Officer of McKesson HBOC, Inc., a healthcare services company,
and as Chief Executive Officer of iMcKesson LLC, also a
healthcare services company, from 1999 to 2001. Mr. Mahoney
is a member of the board of directors of Corcept Therapeutics
Incorporated, Tercica Incorporated and several non-profit
organizations.
Mr. Miller was appointed to the Board in September
1994. Since January 2007, Mr. Miller has served as
Executive Chairman of Delphi Corporation, an auto parts
supplier. From July 2005 until January 2007, Mr. Miller
served as Chairman and Chief Executive Officer of Delphi
Corporation. From January 2004 to June 2006, Mr. Miller was
non-executive Chairman of Federal Mogul Corporation, an auto
parts supplier. From 2001 to 2003, Mr. Miller was Chairman
and Chief Executive Officer of Bethlehem Steel Corporation, a
large steel producer. Prior to joining Bethlehem Steel,
Mr. Miller served as Chairman and Chief Executive Officer
on an interim basis upon the departure of Federal-Moguls
top executive in 2000. Delphi Corporation and certain of its
subsidiaries filed voluntary petitions for reorganization under
the United States Bankruptcy Code in October 2005, and Federal
Mogul Corporation and Bethlehem Steel Corporation and certain of
their subsidiaries, filed voluntary petitions for reorganization
under the United States Bankruptcy Code in October 2001.
Mr. Miller is a member of the board of directors of UAL
Corporation and two private companies.
Mr. Reyes has been a member of the Board since July
2000. Mr. Reyes became the Chief Financial Officer of
Google Inc., an advertising and Internet search solutions
provider, in July 2002. Prior to joining Google, he served as
Interim Chief Financial Officer for ONI Systems Corporation, an
optical networking company, from February to June 2002. Prior to
ONI Systems, Mr. Reyes spent 13 years at Sun
Microsystems, Inc., a provider of network computing products and
services, where he served in a number of finance roles, with his
last position as Vice President Treasurer from 1999
to 2001.
12
Mr. Schulman has been a member of the Board since
March 2000. Mr. Schulman has served as Chief Executive
Officer of Virgin Mobile USA, a cellular phone service provider,
since 2001, and also served as a member of the board of
directors of Virgin Mobile USA since 2001. From 2000 to 2001,
Mr. Schulman was President and Chief Executive Officer
of priceline.com Incorporated, an online travel company, after
serving as President and Chief Operating Officer since July 1999.
Mr. Unruh was appointed to the Board in July 2005
following the acquisition of Veritas. Mr. Unruh had served
on Veritas board of directors since 2003. Mr. Unruh
retired as Vice Chairman of the Bechtel Group, Inc., a global
engineering and construction services company, in June 2003.
During his
25-year
tenure with Bechtel, Mr. Unruh held various positions in
management including President of Bechtel Enterprises,
Bechtels finance, development and ownership arm, from 1997
to 2001 and Chief Financial Officer from 1992 to 1996.
Mr. Unruh is a member of the board of directors of Move,
Inc., Heidrick & Struggles International, Inc. and
three private companies. Mr. Unruh is a certified public
accountant.
Director
Compensation
The following table provides information for fiscal year 2008
compensation for all non-employee directors of the company who
served during the last fiscal year:
Fiscal
Year 2008 Director Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned
|
|
|
|
|
|
|
|
|
|
|
|
|
or Paid in
|
|
|
Stock
|
|
|
Option
|
|
|
|
|
|
|
Cash
|
|
|
Awards
|
|
|
Awards
|
|
|
Total
|
|
Name
|
|
($)(1)
|
|
|
($)(3)
|
|
|
($)(9)(10)
|
|
|
($)
|
|
|
Michael A. Brown
|
|
|
55,010
|
|
|
|
189,586
|
(4)(5)
|
|
|
29,497
|
|
|
$
|
274,093
|
|
William T. Coleman
|
|
|
35,010
|
|
|
|
189,586
|
(4)(5)
|
|
|
156,085
|
|
|
$
|
380,681
|
|
Frank E. Dangeard
|
|
|
10,013
|
|
|
|
252,902
|
(4)(6)
|
|
|
|
|
|
$
|
262,915
|
|
Geraldine B. Laybourne(2)
|
|
|
14,479
|
|
|
|
13,902
|
(7)
|
|
|
|
|
|
$
|
23,381
|
|
David L. Mahoney
|
|
|
50,010
|
|
|
|
189,586
|
(4)(5)
|
|
|
119,567
|
|
|
$
|
359,163
|
|
Robert S. Miller(8)
|
|
|
50,013
|
|
|
|
214,584
|
(4)(6)
|
|
|
156,085
|
|
|
$
|
420,682
|
|
George Reyes
|
|
|
40,010
|
|
|
|
189,586
|
(4)(5)
|
|
|
156,085
|
|
|
$
|
385,681
|
|
David J.
Roux*
|
|
|
15,013
|
|
|
|
214,584
|
(4)(6)
|
|
|
9,713
|
|
|
$
|
239,310
|
|
Daniel H. Schulman
|
|
|
55,010
|
|
|
|
189,586
|
(4)(5)
|
|
|
156,085
|
|
|
$
|
400,681
|
|
V. Paul Unruh
|
|
|
70,010
|
|
|
|
189,586
|
(4)(5)
|
|
|
29,497
|
|
|
$
|
289,093
|
|
|
|
|
* |
|
Former director. |
|
(1) |
|
Non-employee directors receive an annual retainer fee of $50,000
plus an additional annual fee of $10,000 (Compensation Committee
and Nominating and Governance Committee) or $15,000 (Audit
Committee) for membership on each committee. The chair of each
committee receives an additional annual fee of $10,000
(Compensation Committee and Nominating and Governance Committee)
or $20,000 (Audit Committee). As indicated below in
footnotes 5 and 6, the annual retainer fee is
paid in a combination of cash and shares of our common stock. |
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(2) |
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Ms. Laybourne was appointed to the Board on January 1,
2008. |
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(3) |
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Amounts shown in this column reflect our accounting expense for
these restricted stock unit awards and do not reflect whether
the recipient has actually realized a financial benefit from the
awards (such as by vesting in a restricted stock unit award).
This column represents the dollar amount recognized for
financial statement reporting purposes with respect to the 2008
fiscal year for the fair value of restricted stock units granted
to the
non-employee
directors in accordance with Financial Accounting Standard
No. 123 (revised 2004), Share-Based Payment
(SFAS 123R). Restricted stock units were not granted
to non-employee directors prior to fiscal 2007. Pursuant to SEC
rules, the amounts shown exclude the impact of estimated
forfeitures related to service-based vesting conditions. As Mr.
Roux ceased serving as a director on September 13, 2007,
9,906 of |
13
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his restricted stock unit awards were forfeited during fiscal
2008. For additional information about assumptions used in
valuing our equity compensation awards, refer to Note 15 of
the financial statements in our
Form 10-K
for the year ended March 28, 2008, as filed with the SEC. |
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(4) |
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Messrs. Brown, Coleman, Dangeard, Mahoney, Miller, Reyes,
Roux, Schulman, and Unruh were each granted 9,906 restricted
stock units on May 2, 2007, with a per share fair value of
$18.17 and a full grant date fair value of $179,992. As of
March 28, 2008, each of these non-employee directors held
9,906 outstanding restricted stock units, with the exception of
Mr. Roux. As Mr. Roux ceased serving as a director on
September 13, 2007, all of his RSUs were forfeited during
fiscal year 2008. |
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(5) |
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In lieu of cash, Messrs. Brown, Coleman, Mahoney, Reyes,
Schulman and Unruh each received 50% of their annual retainer
fee of $50,000 in the form of our common stock. Accordingly,
pursuant to the terms of the 2000 Director Equity Incentive
Plan, they were each granted 1,402 shares at a per share
fair value of $17.83, and a full fair value of $24,997. The
balance of Messrs. Browns, Colemans,
Mahoneys, Reyess, Schulmans and Unruhs
fees were paid in cash as reported in Fees Earned or Paid
in Cash in the table above. |
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(6) |
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In lieu of cash, Messrs. Dangeard, Miller, and Roux each
elected to receive 100% of their annual retainer fee of $50,000
in the form of our common stock. Accordingly, pursuant to the
terms of the 2000 Director Equity Incentive Plan, they were
each granted 2,804 shares at a per share fair value of
$17.83, and a full fair value of $49,995. The balance of
Messrs. Dangeards, Millers, and Rouxs
fees were paid in cash and is reported in Fees Earned or
Paid in Cash in the table above. |
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(7) |
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Because Ms. Laybourne was appointed to the Board after the
beginning of the fiscal year, she was granted a pro-rated award
of 3,684 restricted stock units on January 2, 2008, with a
per share fair value of $16.06 and a full grant date fair value
of $59,165. As of March 28, 2008, Ms. Laybourne held
3,684 outstanding restricted stock units. |
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(8) |
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Mr. Miller received an additional annual fee in the amount
of $25,000 for his role as Lead Independent Director. |
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(9) |
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Amounts shown in this column reflect our accounting expense for
these awards and do not reflect whether the recipient has
actually realized a financial benefit from the awards (such as
by exercising stock options). This column represents the dollar
amount recognized for financial statement reporting purposes
with respect to the 2008 fiscal year for the fair value of stock
options granted to the directors. The fair value was estimated
using the Black-Scholes option pricing model in accordance with
SFAS 123R. Pursuant to SEC rules, the amounts shown exclude
the impact of estimated forfeitures related to service-based
vesting conditions. For additional information about assumptions
used in valuing our equity compensation awards, refer to
Note 15 of the financial statements in our
Form 10-K
for the year ended March 28, 2008, as filed with the SEC. |
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(10) |
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In fiscal year 2008, there were no stock option grants to any
person who served as a non-employee director. The outstanding
stock option awards held by each
non-employee
director at 2008 fiscal year-end were: Mr. Brown (175,630),
Mr. Coleman (164,000), Mr. Mahoney (106,000),
Mr. Miller (148,000), Mr. Reyes (240,000),
Mr. Schulman (89,168) and Mr. Unruh (180,630).
Mr. Roux ceased serving as a director on September 13,
2007, and therefore, 203,114 of his stock option grants were
cancelled during fiscal 2008. |
The policy of the Board is that compensation for independent
directors should be a mix of cash and equity-based compensation.
Symantec does not pay employee directors for Board service in
addition to their regular employee compensation. Independent
directors may not receive consulting, advisory or other
compensatory fees from the company. The Compensation Committee,
which consists solely of independent directors, has the primary
responsibility to review and consider any revisions to
directors compensation.
Director Stock Ownership Guidelines: To better
align our directors interests with those of our
stockholders, the Compensation Committee instituted new stock
ownership guidelines in May 2007. The Committee eliminated the
previous 12 month minimum holding period for equity grants,
making the new guidelines as follows:
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Directors must maintain a minimum holding of 10,000 shares
of company stock;
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New directors will have three years to reach the minimum holding
level; and
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Notwithstanding the foregoing, directors may sell enough shares
to cover their income tax liability on vested grants.
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14
Annual Fees: In accordance with the
recommendation of the Compensation Committee, the Board
determined the non-employee directors compensation for
fiscal year 2008 as follows:
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$50,000 annual cash retainer
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$10,000 annual fee for committee membership ($15,000 for Audit
Committee membership)
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$10,000 annual fee for chairing a committee of the Board
($20,000 for chairing the Audit Committee)
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$25,000 annual fee for the Lead Independent Director
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The payment of the annual cash retainer is subject to the terms
of the 2000 Director Equity Incentive Plan, as amended,
which requires that at least 50% of the annual retainer fee be
paid in the form of unrestricted, fully-vested shares of our
common stock. We pay the annual retainer fee and any additional
annual fees to each director at the beginning of the fiscal
year. Directors who join the company after the beginning of the
fiscal year receive a prorated cash payment in respect of their
annual retainer fee and fees. These payments are considered
earned when paid. Accordingly, we do not require them to be
repaid in the event a director ceases serving in the capacity
for which he or she was compensated.
Annual Equity Awards. Each non-employee member
of the Board receives an annual award of restricted stock units
having a fair market value on the grant date equal to $180,000,
with this value prorated for new non-employee directors from the
date of such directors appointment to our Board to the
date of the first Board meeting in the following fiscal year.
The restricted stock unit awards granted for fiscal year 2008
were granted on May 2, 2007 and vested in full on
May 2, 2008. The restricted unit awards granted for fiscal
year 2009 were granted on April 30, 2008 and will vest in
full on April 30, 2009. Since the beginning of fiscal year
2007, we have not made option grants to our directors. Option
grants made to our non-employee directors in fiscal 2006 and
prior years were subject to a four-year vesting schedule. In the
event of a merger or consolidation in which Symantec is not the
surviving corporation or another similar change in control
transaction involving Symantec, all unvested stock option and
restricted stock unit awards made to non-employee directors
under the programs described above will accelerate and vest in
full.
Symantec stock ownership information for each of our directors
is shown under the heading Security Ownership of Certain
Beneficial Owners and Management in this proxy statement.
THE BOARD
RECOMMENDS A VOTE FOR ELECTION OF
EACH OF THE TEN NOMINATED DIRECTORS.
15
EQUITY
COMPENSATION PLAN INFORMATION
The following table gives information about Symantecs
common stock that may be issued upon the exercise of options,
warrants and rights under all of Symantecs existing equity
compensation plans as of March 28, 2008:
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Equity Compensation Plan Information
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Number of Securities
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Number of Securities
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Remaining Available for
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to be Issued Upon
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Weighted-Average
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Future Issuance Under
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Exercise of
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Exercise Price of
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Equity Compensation Plans
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Outstanding Options,
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Outstanding Options,
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(Excluding Securities
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Plan Category
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Warrants and Rights
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Warrants and Rights
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Reflected in Column (a))
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(a)
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(b)
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(c)
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Equity compensation plans approved by security holders
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69,550,040
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$
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15.53
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51,228,569
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(1)
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Equity compensation plans not approved by security holders
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835,529
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(2)(3)
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$
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6.49
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Total
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70,385,569
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15.42
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51,228,569
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(1) |
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Represents 9,618,489 shares remaining available for future
issuance under Symantecs 1998 Employee Stock Purchase
Plan, 209,599 shares remaining available for future
issuance under Symantecs 2002 Executive Officers
Stock Purchase Plan, 54,449 shares remaining available for
future issuance under Symantecs 2000 Director Equity
Incentive Plan and 41,346,032 shares remaining available
for future issuance under Symantecs 2004 Equity Incentive
Plan. Note that such numbers do not reflect the shares proposed
to be reserved under the amended and restated 2004 Equity
Incentive Plan and the 2008 Employee Stock Purchase Plan under
Proposal Nos. 2 and 3. |
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(2) |
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Excludes outstanding options and restricted stock unit awards to
acquire 26,770,874 shares as of March 28, 2008 that
were assumed as part of the Veritas acquisition. Excludes
outstanding options and restricted stock unit awards to acquire
3,238,151 shares as of March 28, 2008 that were
assumed as part of other acquisitions. The weighted average
exercise price of these outstanding options was $21.21 as of
March 28, 2008. In connection with these acquisitions,
Symantec has only assumed outstanding options and rights, but
not the plans themselves, and therefore, no further options or
rights may be granted under these acquired-company plans. |
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(3) |
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Represents 825,549 outstanding options to purchase shares under
Symantecs 2001 Non-Qualified Equity Incentive Plan, and
9,980 options outstanding under Symantecs 1999 Acquisition
Plan. As noted below, the 2001 Non-Qualified Equity Incentive
Plan was terminated in September 2004 in connection with the
adoption of the Symantec 2004 Equity Incentive Plan. A total of
4,000,000 shares of common stock were originally authorized
and reserved for issuance under the 1999 Acquisition Plan. As
noted below, the 1999 Acquisition Plan was terminated in October
2005. |
Material
Features of Equity Compensation Plans Not Approved by
Stockholders
2001
Non-Qualified Equity Incentive Plan
The 2001 Non-Qualified Equity Incentive Plan was terminated in
September 2004 in connection with the adoption of the Symantec
2004 Equity Incentive Plan. As of March 28, 2008, options
to purchase 825,549 shares were outstanding under the 2001
Non-Qualified Equity Incentive Plan.
Terms of Options. Symantecs Compensation
Committee determined many of the terms and conditions of each
option granted under the plan, including the number of shares
for which the option was granted, the exercise price of the
option and the periods during which the option may be exercised.
Each option is evidenced by a stock option agreement in such
form as the Committee approved and is subject to the following
conditions (as described in further detail in the plan):
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Vesting and Exercisability: Options and
restricted shares become vested and exercisable, as applicable,
within such periods, or upon such events, as determined by the
Compensation Committee in its discretion and as set forth in the
related stock option or restricted stock agreement. To date, as
a matter of practice,
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16
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options under the plan have generally been subject to a
four-year vesting period. Options terminate ten years or less
from the date of grant.
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Exercise Price: The exercise price of each
option granted was not less than 100% of the fair market value
of the shares of common stock on the date of the grant.
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Tax Status: All options granted under the plan
are non-qualified stock options.
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Method of Exercise: The option exercise price
is typically payable in cash or by check, but may also be
payable, at the discretion of the Committee, in other forms of
consideration.
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Termination of Employment: Options cease
vesting on the date of termination of service or death of the
participant. Options granted under the plan generally expire
three months after the termination of the optionees
service to Symantec or a parent or subsidiary of Symantec,
except in the case of death or disability, in which case the
options generally may be exercised up to 12 months
following the date of death or termination of service. However,
if the optionee is terminated for cause, the optionees
options expire upon termination of employment.
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Corporate Transactions. In the event of a
change of control of Symantec (as defined in the plan), the
buyer may either assume the outstanding awards or substitute
equivalent awards. In the event the buyer fails to assume or
substitute awards issued under the plan, all awards will expire
upon the closing of the transaction.
Term and Amendment of the Plan. The plan was
terminated in September 2004, except that outstanding options
granted thereunder will remain in place for the term of such
options.
1999
Acquisition Plan
The purpose of this plan was to issue stock options in
connection with Symantecs acquisition of URLabs in
September 1999.
Eligibility for Participation. Employees,
officers, consultants, independent contractors and advisors to
Symantec, or of any subsidiary or affiliate of Symantec, are
eligible to receive stock options under this plan. Options
awarded to officers may not exceed in the aggregate 30% of all
shares available for grant under the plan.
Terms of Options. Many of the terms of the
options are determined by the Compensation Committee, and are
generally the same in all material respects as the terms
described above with respect to Symantecs 2001
Non-Qualified Equity Incentive Plan, except that the 1999
Acquisition Plan does not contain a provision for the expiration
of employees options upon a termination for cause.
Term and Amendment of the Plan. The plan was
terminated by the Board on October 18, 2005, except that
outstanding options granted thereunder will remain in place for
the term of such options.
17
PROPOSAL NO. 2
AMENDMENT
AND RESTATEMENT OF 2004 EQUITY INCENTIVE PLAN
You are being asked to approve the amendment and restatement of
our 2004 Equity Incentive Plan
(the 2004 Plan), including the
reservation of an additional 50,000,000 shares of our
common stock for issuance thereunder (representing approximately
6.0% of our outstanding common stock as of July 4, 2008).
The 2004 Plan was originally approved at Symantecs 2004
Annual Meeting of Stockholders. The Board approved this
amendment and restatement of the 2004 Plan on April 29,
2008, subject to stockholder approval at the annual meeting.
We seek to increase the number of shares reserved for issuance
under the 2004 Plan by 50,000,000 shares. Our stockholders
previously approved the reservation of an aggregate of
58,000,000 shares for issuance under the 2004 Plan, plus an
additional number of shares that might transfer to the 2004 Plan
upon cancellation of awards granted under our 1996 Equity
Incentive Plan (the Prior Plan). We no longer
grant awards under the Prior Plan. As of July 4, 2008,
approximately 20,400,000 shares have already been
transferred to the 2004 Plan upon cancellation or forfeiture of
Prior Plan awards. While approximately 35,000,000 shares
remain subject to options still outstanding under the Prior
Plan, we estimate that less than half of these shares will ever
become available for grant under the 2004 Plan because
approximately 19,000,000 of these options were vested and
in the money as of July 4, 2008. Our usage of
shares under the 2004 Plan as of July 4, 2008 is as follows:
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4,895,366 shares are issued and outstanding as a result of
option exercises and settlement of RSUs (and are therefore not
available for future grant);
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38,896,594 shares are subject to outstanding options and
RSUs;
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23,016,199 shares are available for future issuance
(excluding shares that might in the future transfer from the
Prior Plan as noted above); and
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11,566,459 shares have become unavailable for issuance
since we deduct from the shares reserved under the 2004 Plan two
shares for every one RSU share we grant.
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The use of equity compensation has historically been a
significant part of our overall compensation philosophy at
Symantec and is a practice that we plan to continue. The 2004
Plan serves as an important part of this practice and is a
critical part of the compensation package that we offer our
personnel. We believe that the use of stock options, restricted
stock units and other equity-based incentives are critical for
us to attract and retain the most qualified personnel and to
respond to relevant market changes in equity compensation
practices. In addition, awards under the 2004 Plan provide our
employees an opportunity to acquire or increase their ownership
stake in us, and we believe this alignment with our
stockholders interests creates a strong incentive to work
hard for our growth and success.
Proposed
Increase in Reserved Shares
As of July 4, 2008, options to purchase a total of
89,393,731 shares of our common stock were outstanding
under all of our equity compensation plans at a weighted average
exercise price of $18.42 and with a weighted average remaining
life of 4.5 years. There were also a total of
10,916,087 shares subject to issuance upon vesting and
settlement of outstanding restricted stock unit awards issued
under our equity compensation plans. In addition to the shares
available for issuance under the 2004 Plan and the Prior Plan
described above, as of July 4, 2008, 40,119 shares remain
available for issuance under our 2000 Director Equity Incentive
Plan and 209,599 shares remain available for issuance under
our 2002 Executive Officers Stock Purchase Plan. The 2004
Plan is the only plan under which we currently have authority to
grant options or stock awards.
One of the important factors that we consider in administering
our equity compensation programs is our burn rate,
meaning the number of shares that we utilize under the 2004 Plan
each year. Our gross and net burn rates have been under 3% since
fiscal 2005. For fiscal year 2008, our gross burn rate was
2.52%, our net burn rate was 1.93%, and our overhang was 16.3%.
Please see Executive Compensation and Related
Information Compensation Discussion & Analysis
(CD&A) beginning on page 42 for more discussion
of our burn rates and overhang analysis.
The reservation of an additional 50,000,000 shares for
issuance under the 2004 Plan is consistent with our anticipated
burn rate over at least the next two years. The closing market
price of our common stock on July 25, 2008 was $19.45 per
share.
18
Summary
of Material Terms of 2004 Equity Incentive Plan (as amended and
restated)
The material terms of the 2004 Plan include the following:
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employees (including officers), consultants, independent
contractors, advisors and members of our Board (including
non-employee directors) are eligible to participate in the 2004
Plan;
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the types of awards that may be granted are stock options,
restricted stock awards, restricted stock units and stock
appreciation rights;
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shares that are subject to issuance upon exercise of an option
but cease to be subject to such option for any reason (other
than exercise of such option), shares that are subject to an
award that is granted but is subsequently forfeited or
repurchased by Symantec at the original issue price and shares
that are subject to an award that terminates without shares
being issued will again be available for grant and issuance
under the 2004 Plan;
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shares that are withheld to pay the exercise or purchase price
of an award or to satisfy any tax withholding obligations in
connection with an award, shares that are not issued or
delivered as a result of the net settlement of an outstanding
option or stock appreciation right and shares that are
repurchased on the open market with the proceeds of an option
exercise price will not be available again for grant and
issuance under the 2004 Plan;
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for purposes of determining the number of shares available for
grant under the 2004 Plan against the maximum number of shares
authorized, any full-value award (i.e., an award of restricted
stock or restricted stock units) will reduce the number of
shares available for issuance by two shares for every share
issued, and any other award (i.e., an option or stock
appreciation right) will reduce the number of shares available
for issuance by one share for every share issued;
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the per-share exercise price of stock options granted under the
2004 Plan must equal at least the fair market value of a share
of our common stock on the grant date of the option;
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the exercise price of an option or stock appreciation right may
not be reduced (repriced) without stockholder approval (other
than in connection with certain corporate transactions,
including stock splits, stock dividends, mergers, spin-offs and
certain other similar transactions);
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no person will be eligible to receive more than
2,000,000 shares in any calendar year pursuant to the grant
of awards under the 2004 Plan (no more than 400,000 of which can
be as awards of restricted stock or restricted stock units)
except that new employees are eligible to receive up to a
maximum of 3,000,000 shares in the calendar year in which
they commence employment (no more than 600,000 of which can be
as awards of restricted stock or restricted stock units);
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in the event of a stock dividend, recapitalization, stock split,
reverse stock split, subdivision, combination, reclassification
or similar change in the capital structure of Symantec without
consideration or if there is a change in the corporate structure
of Symantec, then (a) the number of shares reserved for
issuance under the 2004 Plan, (b) the limits on the number
of shares that may be issued to participants in a calendar year,
(c) the exercise price and number of shares subject to
outstanding options and (d) the purchase price and number
of shares subject to other outstanding awards, including
restricted stock awards, will be proportionately adjusted,
subject to any required action by our Board or our stockholders
and subject to compliance with applicable securities laws;
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stockholder approval is required for certain types of amendments
to the 2004 Plan; and
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the 2004 Plan will terminate on July 20, 2014 unless
terminated earlier.
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Summary
Description of 2004 Equity Incentive Plan (as amended and
restated)
The following is a summary of the principal provisions of the
2004 Plan, as proposed for approval. This summary does not
purport to be a complete description of all of the provisions of
the 2004 Plan. It is qualified in its entirety by reference to
the full text of the 2004 Plan. A copy of the 2004 Plan has been
filed with the SEC with this
19
proxy statement, and any stockholder who wishes to obtain a copy
of the 2004 Plan may do so by written request to the Corporate
Secretary at Symantecs headquarters in Cupertino,
California.
Purpose of the 2004 Plan. The primary purpose
of the 2004 Plan is to provide incentives to attract, retain and
motivate eligible persons whose contributions are important to
the success of Symantec, our subsidiaries and affiliates, by
offering them an opportunity to participate in our future
performance through awards of options, stock appreciation
rights, restricted stock units and restricted stock awards. To
date, we have issued only options and restricted stock units
under the 2004 Plan. In addition, the 2004 Plan is intended to
align the interests of our employees with the interests of
Symantecs stockholders by providing participants with the
opportunity to share in any appreciation in the value of our
stock that their efforts help bring about. The 2004 Plan is an
essential component of the total compensation package offered to
employees, reflecting the importance that Symantec places on
motivating and rewarding superior results with long-term,
performance-based incentives.
Shares Reserved for Issuance. The history and
status of the number of shares reserved for issuance, made
subject to awards and issued under the 2004 Plan are described
above. Shares that are subject to issuance upon exercise of an
option but cease to be subject to such option for any reason
(other than exercise of such option), shares that are subject to
an award that is granted but is subsequently forfeited or
repurchased by Symantec at the original issue price and shares
that are subject to an award that terminates without shares
being issued will again be available for grant and issuance
under the 2004 Plan. Shares that are withheld to pay the
exercise or purchase price of an award or to satisfy any tax
withholding obligations in connection with an award, shares that
are not issued or delivered as a result of the net settlement of
an outstanding option or stock appreciation right and shares
that are repurchased on the open market with the proceeds of an
option exercise price will not be available again for grant and
issuance under the 2004 Plan.
Administration. Symantecs Compensation
Committee administers the 2004 Plan except when our Board
decides to directly administer the 2004 Plan (either being the
Committee). The Committee determines the
persons who are to receive awards, the number of shares subject
to each award and the other terms and conditions of such awards.
The Committee also has the authority to interpret the provisions
of the 2004 Plan and any awards granted thereunder and to modify
awards granted under the 2004 Plan. The Committee may not,
however, reprice options or stock appreciation rights issued
under the 2004 Plan without prior approval of Symantecs
stockholders (other than in connection with certain corporate
transactions, including stock splits, stock dividends, mergers,
spin-offs
and certain similar transactions). To the extent permitted by
applicable laws, the Committee may delegate to one or more
officers of Symantec the authority to grant awards under the
2004 Plan to participants who are not officers, directors or
other employees subject to Section 16 of the Exchange Act.
Eligibility. The 2004 Plan provides that
awards may be granted to employees, officers, directors
(including non-employee directors), consultants, independent
contractors and advisors of Symantec or any parent, subsidiary
or affiliate of Symantec as the Committee may determine.
However, incentive stock options (ISOs) may
only be granted to employees of Symantec or any parent or
subsidiary of Symantec. The actual number of individuals who
will receive awards cannot be determined in advance because the
Committee has discretion to select the participants and
determine in each case the size of any award. As of July 4,
2008, there were approximately 17,800 employees and
consultants, including nine executive officers, and nine
non-employee directors eligible to receive discretionary
and/or
automatic awards under the 2004 Plan.
Section 162(m)
Considerations. Section 162(m) of the
Internal Revenue Code of 1986, as amended
(the Code) generally disallows a tax
deduction to public companies for compensation in excess of
$1 million paid to the companys Chief Executive
Officer or any of the three other most highly compensated
officers. Certain performance-based compensation is specifically
exempt from this deduction limit if it otherwise meets the
requirements of Section 162(m). Stock options and other
equity awards pursuant to which the recipients
compensation is based solely on the appreciation of the value of
the underlying shares from the date of grant until the date of
the income recognition event may qualify as performance-based
compensation if the company satisfies certain requirements in
connection with the plan under which the awards are granted.
Specifically, the plan must be stockholder-approved and must
contain a limit on the number of shares that may be granted to
any one individual under the plan during a specified period.
Accordingly, the 2004 Plan provides that no person will be
eligible to receive more than 2,000,000 shares in any
calendar year pursuant to the grant of awards under the 2004
20
Plan (no more than 400,000 of which can be as awards of
restricted stock or restricted stock units) except that new
employees of Symantec, or any parent, subsidiary or affiliate of
Symantec, are eligible to receive up to a maximum of
3,000,000 shares in the calendar year in which they
commence employment (no more than 600,000 of which can be as
awards of restricted stock or restricted stock units).
Additional requirements apply to certain forms of compensation,
such as restricted stock units and restricted stock awards, in
order for them to qualify as performance-based compensation,
including a requirement that payment of the value of such awards
be contingent upon achievement of performance goals that are
established in a manner specified under Section 162(m) of
the Code. The 2004 Plan permits Symantec to issue awards
incorporating such performance objectives and provides that
these performance objectives may be based upon: (a) net
revenue
and/or net
revenue growth; (b) earnings before income taxes and
amortization
and/or
earnings before income taxes and amortization growth;
(c) operating income
and/or
operating income growth; (d) net income
and/or net
income growth; (e) earnings per share (EPS)
and/or
earnings per share growth; (f) total stockholder return
and/or total
stockholder return growth; (g) return on equity;
(h) operating cash flow return on income; (i) adjusted
operating cash flow return on income; (j) economic value
added; and (k) individual business objectives
(collectively, the Performance Factors). To
the extent that the Committee determines that an award will be
granted subject to Performance Factors, such factors will be
specified with respect to a particular award by the Committee in
a manner designed to comply with Section 162(m).
Stock Options. As discussed above, the
Committee determines the terms and conditions of awards granted
under the 2004 Plan, including whether an option will be an ISO
or a non-qualified stock option (NQSO). As a
matter of practice, all options currently being granted are
NQSOs. Each option is evidenced by an agreement in such form as
the Committee approves and is subject to the following
conditions (as described in further detail in the 2004 Plan):
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Vesting and Exercisability: Options become
vested and exercisable, as applicable, within such periods, or
upon such events, as determined by the Committee and as set
forth in the related stock option agreement. Under the 2004
Plan, the maximum term of each option is ten years from the date
of grant. As a matter of practice, options have generally been
subject to a four-year vesting period with a one-year period
before any vesting occurs and are currently granted with a
maximum term of seven years from the date of grant.
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Exercise Price: Each stock option agreement
states the exercise price of the option, which may not be less
than 100% of the fair market value of Symantec common stock on
the date of the grant. The fair market value of our shares is
generally the closing price for our shares on the Nasdaq Global
Select Market on the relevant date as reported in The Wall
Street Journal.
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Method of Exercise: The exercise price of
options and the purchase price, if any, of other stock awards
may be paid by cash, check, wire transfer, cancellation of
indebtedness, surrender of shares previously held, broker
assisted
same-day
sales, net exercise, waiver of compensation and any other method
permitted by the Committee and applicable law.
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Termination of Employment: Options cease
vesting on the date of termination of service or the death or
disability of the participant. Options granted under the 2004
Plan generally expire three months after the termination of the
participants service to Symantec, except in the case of
death or disability, in which case the awards generally may be
exercised to the extent vested and exercisable up to
12 months following the date of death or termination of
service. However, if the participant is terminated for cause,
the participants options will expire upon termination.
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Change of Control: In the event of a change of
control of Symantec (as set forth in the 2004 Plan), the buyer
may either assume outstanding awards or substitute equivalent
awards. If the buyer fails to assume or substitute awards issued
under the 2004 Plan, all awards will expire upon the closing of
the transaction, and our Board will determine whether the change
of control will have any additional effect, including
acceleration of the vesting period of the awards. Formula
restricted stock unit grants to non-employee directors will
fully vest upon a change of control.
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Non-Employee Director Equity Awards. The 2004
Plan provides for an annual non-discretionary award of
restricted stock units with a value of $180,000 on the date of
grant to each non-employee director on the first
21
business day following the first regular Board meeting of each
fiscal year. The 2004 Plan also provides for the automatic grant
of restricted stock units with a value of $180,000, pro-rated
based on the number of days from the directors election
date through the date of the first regular Board meeting of the
following fiscal year, on the date of grant to each new
non-employee director on the first business day following the
directors election to the Board. The restricted stock
units granted under this program vest one year from the date of
grant as long as the non-employee director serves on the Board
on such vesting date.
Restricted Stock Units. Restricted stock units
represent the right to receive shares at a specified date in the
future, subject to forfeiture of such right due to termination
of services or failure to achieve specified performance
conditions (including Performance Factors) applicable to such
units. Restricted stock units will be evidenced by a written
agreement between us and the recipient, and the terms and
conditions applicable to restricted stock units may vary from
recipient to recipient. The Committee determines all terms of
restricted stock units (except with respect to the automatic
grant of restricted stock units to our non-employee directors)
including, without limitation, the number of shares subject to
the grant, the time or times during which the restricted stock
units may be settled, the consideration (cash or shares) to be
distributed upon settlement of the restricted stock units and
the effect a termination of recipients services will have
on the restricted stock units. Restricted stock units may vest
upon the passage of time in connection with services performed
for us, upon achievement of performance criteria or upon other
criteria as determined by the Committee. Payment upon settlement
of a restricted stock unit may be made in the form of cash,
shares or a combination thereof, either in a lump sum payment or
in installments, as the Committee shall determine.
Restricted Stock Awards. Each restricted stock
award is evidenced by a restricted stock agreement in such form
as the Committee approves which will contain provisions
regarding the number of shares the participant may be issued,
the purchase price, if any, and the restrictions to which the
shares will be subject. Shares subject to a restricted stock
award may become vested over time or upon completion of
performance goals (including Performance Factors) set out in
advance. Restricted stock awards shall immediately cease to vest
if a participant is terminated for any reason, unless provided
otherwise in the applicable restricted stock agreement or unless
otherwise determined by the Committee, and Symantec will
generally have the right to repurchase any such unvested shares.
Stock Appreciation Rights. Stock appreciation
rights (SARs) are awards in which the
participant is deemed granted a number of shares, subject to
vesting, at an exercise price of not less than 100% of the fair
market value of Symantec common stock on the date of grant. When
the SARs vest, then the participant can exercise the SARs.
Exercise, however, does not mean the number of shares deemed
granted are issued. Rather, the participant will receive cash or
shares, as determined by the Committee, having a value at the
time of exercise equal to (1) the number of shares deemed
exercised, times (2) the amount by which Symantecs
stock price on the date of exercise exceeds the exercise price
of SARs. Vesting may be based on the passage of time in
connection with services performed for us or upon achievement of
performance goals (including Performance Factors) as determined
by the Committee. Under the 2004 Plan, the maximum term of each
SAR is ten years from the date of grant.
Adjustment of Shares. In the event of a stock
dividend, recapitalization, stock split, reverse stock split,
subdivision, combination, reclassification or similar change in
the capital structure of the Company without consideration or if
there is a change in the corporate structure, then (a) the
number of shares reserved for issuance under the 2004 Plan,
(b) the limits on the number of shares that may be issued
to participants in a calendar year, (c) the exercise price
and number of shares subject to outstanding options and
(d) the purchase price and number of shares subject to
other outstanding awards, including restricted stock awards,
will be proportionately adjusted, subject to any required action
by our Board or our stockholders and subject to compliance with
applicable securities laws. Fractions of a share will not be
issued but will be rounded down to the nearest whole share, and
may be replaced by a cash payment equal to the fair market value
of such fraction of a share, as determined by the Committee.
Nontransferability of Awards. Awards granted
under the 2004 Plan will not be transferable by the participant,
other than by will or by the laws of descent and distribution or
as consistent with the award agreement for the award. All awards
will be exercisable during the participants lifetime only
by the participant or the participants guardian or legal
representative and after the participants death by the
legal representative of the participants heirs.
22
Amendment and Termination of the 2004
Plan. Our Board may at any time terminate or
amend the 2004 Plan in any respect, including without limitation
our Board may amend the non-employee director formula restricted
stock unit grants; provided, that our Board may not,
without the approval of the stockholders of Symantec, amend the
2004 Plan to increase the number of shares that may be issued
under the 2004 Plan, change the designation of employees or
class of employees eligible for participation in the 2004 Plan
or materially modify a provision of the 2004 Plan if the
modification requires stockholder approval under rules of the
NASDAQ Stock Market. In addition, except in connection with
certain corporate transactions involving the Company, including
stock splits, stock dividends, mergers, spin-offs and certain
other similar transactions, the Committee may not reduce the
exercise price of (reprice) options or stock appreciation rights
issued under the 2004 Plan without prior approval of
Symantecs stockholders. Unless earlier terminated, the
2004 Plan will terminate on July 20, 2014.
Summary
of Federal Income Tax Consequences of Awards Granted under the
2004 Equity Incentive Plan
The following is a general summary as of the date of this proxy
statement of the U.S. federal income tax consequences to
Symantec and participants in the 2004 Plan with respect to
awards granted under the 2004 Plan. U.S. federal tax laws
may change and U.S. federal, state and local tax
consequences for any participant will depend upon his or her
individual circumstances.
Tax
Treatment of the Participant
Incentive Stock Options. An optionee will
recognize no income upon grant of an ISO and will incur no tax
upon exercise of an ISO unless for the year of exercise the
optionee is subject to the alternative minimum tax
(AMT). If the optionee holds the shares
purchased upon exercise of the ISO (the ISO
Shares) for more than one year after the date the ISO
was exercised and for more than two years after the ISOs
grant date (the required holding period),
then the optionee generally will realize long-term capital gain
or loss (rather than ordinary income or loss) upon disposition
of the ISO Shares. This gain or loss will equal the difference
between the amount realized upon such disposition and the amount
paid for the ISO Shares upon the exercise of the ISO.
If the optionee disposes of ISO Shares prior to the expiration
of the required holding period (a disqualifying
disposition), then gain realized upon such
disposition, up to the difference between the option exercise
price and the fair market value of the ISO Shares on the date of
exercise (or, if less, the amount realized on a sale of such ISO
Shares), will be treated as ordinary income. Any additional gain
will be capital gain, and treated as long-term capital gain or
short-term capital gain depending upon the amount of time the
ISO Shares were held by the optionee.
Alternative Minimum Tax. The difference
between the exercise price and fair market value of the ISO
Shares on the date of exercise is an adjustment to income for
purposes of the AMT. The AMT (imposed to the extent it exceeds
the taxpayers regular tax) is currently 26% of an
individual taxpayers alternative minimum taxable income
(28% in the case of alternative minimum taxable income in excess
of $175,000). Alternative minimum taxable income is determined
by adjusting regular taxable income for certain items,
increasing that income by certain tax preference items and
reducing this amount by the applicable exemption amount. If a
disqualifying disposition of the ISO Shares occurs in the same
calendar year as exercise of the ISO, there is no AMT adjustment
with respect to those ISO Shares. Also, upon a sale of ISO
Shares that is not a disqualifying disposition, alternative
minimum taxable income is reduced in the year of sale by the
excess of the fair market value of the ISO Shares at exercise
over the amount paid for the ISO Shares.
Non-Qualified Stock Options. An optionee will
not recognize any taxable income at the time a NQSO is granted.
However, upon exercise of a NQSO, the optionee must include in
income as compensation an amount equal to the difference between
the fair market value of the shares on the date of exercise and
the optionees exercise price. The included amount must be
treated as ordinary income by the optionee and will be subject
to income tax withholding by Symantec if the optionee is an
employee. Upon resale of the shares by the optionee, any
subsequent appreciation or depreciation in the value of the
shares will be treated as long-term or short-term capital gain
or loss depending upon the amount of time the NQSO shares were
held by the optionee.
Restricted Stock Units. In general, no taxable
income is realized upon the grant of a restricted stock unit
award. The participant will generally include in ordinary
income, which will be subject to income tax withholding by
Symantec if the participant is an employee, the fair market
value of the shares of stock that are delivered to the
23
participant upon settlement, which generally occurs at the time
the restricted stock units vest. The 2004 Plan allows the
Company to withhold shares from the restricted stock unit award
to satisfy the Participants withholding tax obligation,
with Symantec retiring those shares and being required to tender
cash from its general funds to the applicable tax authorities in
an amount equal to the value of the shares withheld.
Restricted Stock. A participant receiving
restricted shares for services recognizes taxable income when
the shares become vested. Upon vesting, the participant will
include in ordinary income an amount, which will be subject to
income tax withholding by Symantec if the participant is an
employee, equal to the difference between the fair market value
of the shares at the time they become substantially vested and
any amount paid for the shares. Upon resale of the shares by the
participant, subsequent appreciation or depreciation in the
value of the shares is treated as long-term or short-term
capital gain or loss depending on the amount of time the shares
were held by the participant.
Stock Appreciation Rights. A grant of a stock
appreciation right has no federal income tax consequences at the
time of grant. Upon the exercise of stock appreciation rights,
the value of the shares or other consideration received is
generally taxable to the recipient as ordinary income, which
will be subject to income tax withholding by Symantec if the
recipient is an employee.
Section 409A. The American Jobs Creation
Act of 2004 added Section 409A to the tax code, generally
effective January 1, 2005. The IRS has issued proposed and
final regulations that, in part, give employers until the end of
2008 to effect written Section 409A implementation in
almost all circumstances. Section 409A covers most programs
that defer the receipt of compensation to a succeeding year. It
provides rules for elections to defer (if any) and for timing of
payouts. There are significant penalties placed on the
individual employee if compensation does not conform to the
strict requirements of Section 409A. While
Section 409A may affect the timing of our withholding
obligations, it does not affect our ability to deduct deferred
compensation. Section 409A generally would not apply to
stock options granted under the 2004 Plan. It may apply to
restricted stock units granted under the 2004 Plan. The 2004
Plan allows for us to defer the issuance of shares with respect
to 2004 Plan awards.
Tax
Treatment of Symantec
Subject to any withholding requirement, the standard of
reasonableness, and (if applicable) Section 162(m) of the
Code, Symantec generally will be entitled to a deduction to the
extent any participant recognizes ordinary income from an award
granted under the 2004 Plan.
ERISA
Information
The 2004 Plan is not subject to any of the provisions of the
Employee Retirement Income Security Act of 1974, as amended.
Accounting
Treatment
Symantec will recognize compensation expense in connection with
awards granted under the 2004 Plan as required under applicable
accounting standards, including under Statement of Financial
Accounting Standards No. 123(R). Symantec currently
recognizes compensation expense associated with equity awards
over an awards requisite service period and establishes
fair value of equity awards in accordance with applicable
accounting standards.
New Plan
Benefits
Except as described in Summary Description of 2004 Equity
Incentive Plan (as amended and restated)
Non-Employee Director Equity Awards above, future awards
to directors, executive officers, employees and other eligible
participants under the 2004 Plan are discretionary and cannot be
determined at this time. Further, since the number of shares
subject to the restricted stock units to be automatically
granted to non-employee directors under the 2004 Plan depends on
the fair market value of our common stock at future dates, it is
not possible to determine the exact number of shares that will
be subject to such future restricted stock unit awards.
24
As of July 4, 2008, the following named executive officers
had received grants of options and restricted stock units
relating to the number of the shares listed after his or her
name during the fiscal year ending April 3, 2009:
John W. Thompson 115,000 RSUs and 380,000
options; Enrique T. Salem 50,000 RSUs and 240,000
options; James A. Beer 30,000 RSUs and 100,000
options; Gregory W. Hughes 30,000 RSUs and 100,000
options; and Janice Chaffin 30,000 RSUs and 90,000
options. Former employees, Gregory S. Butterfield and
Thomas W. Kendra, did not receive grants of options or
restricted stock units during the 2009 fiscal year. During that
same period, all executive officers as a group were granted an
aggregate of 347,333 RSUs and 1,187,000 options and all
directors who are not executive officers, as a group, were
granted 94,068 RSUs and no options. Additional information about
equity awards made to our named executive officers and directors
during fiscal year 2008 and equity awards held by our named
executive officers as of the end of fiscal year 2008 are
contained in the following tables and their related footnotes
contained elsewhere in this proxy statement: Fiscal Year
2008 Director Compensation (beginning on page 13),
Grants of Plan-Based Awards in Fiscal 2008 (beginning on
page 56) and Outstanding Equity Awards At 2008 Fiscal
Year-End (beginning on page 58). Each executive officer and
each person who previously served as an executive officer during
fiscal year 2008 and remains employed by Symantec has an
interest in Proposal No. 2.
THE BOARD
RECOMMENDS A VOTE FOR APPROVAL OF
PROPOSAL NO. 2
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PROPOSAL NO. 3
ADOPTION
OF 2008 EMPLOYEE STOCK PURCHASE PLAN
At the annual meeting, we seek approval by our stockholders of
our new 2008 Employee Stock Purchase Plan (the New
ESPP) and the reservation of 20,000,000 shares of
our common stock for issuance under the New ESPP (representing
approximately 2.4% of our outstanding common stock as of
July 4, 2008). The New ESPP was adopted by our Board on
April 29, 2008 and will become effective immediately upon
stockholder approval. We anticipate that the first Offering
Period (as defined below) under the plan will begin on
February 16, 2009. The terms of the New ESPP are
substantially similar to the terms of our 1998 Employee Stock
Purchase Plan, as amended (the Old ESPP), and
are summarized below.
The purpose of the New ESPP is to continue providing our
employees and employees of our subsidiaries and affiliates with
the ability to acquire shares of our common stock at a discount
to the purchase date fair market value through accumulated
payroll deductions. This is a long-standing benefit program and
we believe it is important in helping us retain employees and
helping align the interests of our employees with those of our
stockholders. We seek approval of the New ESPP because the Old
ESPP terminates for all purposes when the final offering period
under the Old ESPP ends on February 15, 2009. As of
July 4, 2008, an aggregate of 28,985,911 shares of
common stock have been issued, and 9,618,489 shares remain
available for future issuance, under the Old ESPP. We anticipate
that approximately 4,500,000 shares will remain unissued under
the Old ESPP when it expires in January 2009.
If our stockholders approve the New ESPP, this approval will
satisfy the stockholder approval requirements under
Section 423 of the Code and so permit certain participants
to receive special tax treatment under Code Section 423
with respect to the purchase and sale of the shares purchased
under the plan. The New ESPP also allows us the flexibility to
create sub-plans which are designed to achieve tax, securities
law or other Company compliance objectives in particular
locations outside the United States and which are not required
to comply with the requirements of Code Section 423. We
believe this new feature expands our ability to design global
compensation programs by facilitating participation by employees
of Symantec or our subsidiaries or affiliates who are foreign
nationals or employed or reside outside the United States. If
the New ESPP is not approved by our stockholders, the Old ESPP
will terminate pursuant to its terms so that no new offering
periods will commence after January 1, 2009, its final
offering period will end on February 15, 2009 and we would
thereafter not be able to offer to eligible employees this means
of acquiring our common stock.
In 2005, our Board amended the terms of the Old ESPP to limit
the benefits offered to our eligible employees so as to
eliminate the lookback feature of the Old ESPP. This
means that we eliminated the pricing formula that had previously
applied allowing employees to purchase stock at a 15% discount
to market price measured either on the first business day or the
last business day of the Offering Period, whichever was lower.
We made this change in response to changes in the accounting
rules applicable to equity compensation plans in order to
decrease (but not eliminate) the expense we would recognize for
financial statement purposes with respect to the Old ESPP. We
intend at this time to continue the same structure under the New
ESPP as we have been using since 2005 under the Old ESPP.
The following is a summary of the principal provisions of the
New ESPP. This summary does not purport to be a complete
description of all of the provisions of the New ESPP. It is
qualified in its entirety by reference to the full text of the
New ESPP. A copy of the New ESPP has been filed with the SEC
with this proxy statement, and any stockholder who wishes to
obtain a copy of the New ESPP may do so by written request to
the Secretary at Symantecs headquarters in Cupertino,
California.
Summary
of our 2008 Employee Stock Purchase Plan
General;
Statutory Plan and Non-Statutory Plans
The New ESPP reserves 20,000,000 shares of common stock for
issuance to employees. It will be administered by our Board or a
committee appointed by the Board (the
Committee). At the present time, the New ESPP
is administered by the Compensation Committee of the Board. It
is governed by Delaware law, and all questions of interpretation
or application of the New ESPP are determined by the Committee.
26
The New ESPP allows us the ability to establish separate
sub-plans to permit the purchase of our common stock either
through the Statutory Plan, which is intended to
satisfy the requirements of Section 423 of the Code, or
through one or more Non-Statutory Plans which will
not comply with Section 423. Each of the Statutory Plan and
the Non-Statutory Plans shall be operated as separate and
independent plans, although the total number of shares
authorized to be issued under the New ESPP applies in the
aggregate to both the Statutory Plan and all Non-Statutory
Plans. Other than the share reserve, our Board may adopt special
provisions, rules and procedures for a particular Non-Statutory
Plan that are different from, and may in certain cases supersede
the provisions of the New ESPP, without seeking stockholder
approval.
Offering
Periods
The New ESPP will operate by offering eligible employees the
right to purchase stock through a series of successive or
overlapping offering periods (each an Offering
Period). While we may offer Offering Periods of any
duration up to 27 months, we currently intend to operate
the plan beginning in February 2009 through a series of
successive six-month Offering Periods that will begin each
February 16 and August 16 (or the first business day after that
date), and end, respectively, on the following August 15 and
February 15 (or the last business day preceding that date). The
New ESPP also permits us to provide for multiple purchase dates
within a single Offering Period. We intend at this time to
continue the structure we are using under the Old ESPP of having
only a single purchase date for each Offering Period. This
single purchase date will occur on the last business day of the
Offering Period, at which time all accrued payroll deductions of
each participant are applied to the purchase of shares on the
purchase terms described below.
Eligibility
and Participation
Employees (including officers and employee directors) who are
employed for at least 20 hours per week and more than five
months in any calendar year and who are employed by us as of the
third business day before the beginning of an Offering Period
are eligible to participate in that Offering Period, subject to
certain limitations imposed by Section 423(b) of the Code,
applicable local law for locations outside of the United States
and the plan itself. For example, no employee may be granted an
option under the New ESPP if immediately after the grant such
employee would own stock
and/or hold
outstanding options to purchase stock possessing 5% or more of
the total voting power or value of all classes of stock of
Symantec or our subsidiaries. As of July 4, 2008,
approximately 17,000 employees (including officers and
employee directors) were eligible to participate in the New
ESPP. As a result of such eligibility, each executive officer
and each person who previously served as an executive officer
during fiscal 2008 and remains employed by Symantec has an
interest in Proposal No. 3.
Eligible employees become participants in the New ESPP by
submitting an enrollment form authorizing payroll deductions
prior to the beginning of an Offering Period (unless payroll
deductions are not permitted under local law, in which case such
other payment methods as we may approve). Once a participant
enrolls in an Offering Period under the New ESPP, he or she is
automatically enrolled in subsequent Offering Periods unless he
or she withdraws from or becomes ineligible to participate in
the plan. Once an employee has enrolled in the New ESPP, amounts
are withheld from his or her compensation during each payroll
period as described below. An employee may elect to have not
less than 2% nor more than 10% of his or her compensation during
an Offering Period withheld to be used to purchase shares under
the New ESPP. Eligible compensation is defined in the New ESPP
as all compensation including base salary, wages, commissions,
overtime, shift premiums and bonuses, plus draws against
commissions but excluding amounts related to Company equity
compensation, except that for purposes of any Non-Statutory
Plan, compensation is defined as base salary. A participant may
decrease, but not increase, the rate of his or her payroll
deductions once during an ongoing Offering Period by completing
and filing a new authorization for payroll deductions form.
Grant
and Exercise of Option; Purchase Price
On the first trading date of an Offering Period (which is
referred to as the grant date or the Offering
Date), each participant is granted an option to
purchase up to that number of shares determined by dividing his
or her payroll deductions accumulated during the Offering Period
as of the last trading day of the Offering Period by the
purchase price applicable for that Offering Period. As we intend
to continue operating the New ESPP as we have
27
operated the Old ESPP, we expect the purchase price for each
Offering Period to be 85% of the fair market value of a share of
our common stock on the last trading day of the Offering Period
(the Purchase Date). For purposes of the New
ESPP, fair market value means the closing sale price
of our common stock on the Purchase Date, as reported in The
Wall Street Journal or other source deemed reliable by the
Committee. The New ESPP allows us to vary the purchase price
that applies to an Offering Period to provide for the greatest
discount allowed under Code Section 423 (which means that
the purchase price cannot be less than 85% of the fair market
value of our stock at the beginning or at the end of the
Offering Period, whichever value is lower).
Certain limitations on the number of shares that a participant
may purchase apply. For example, the option granted to an
employee may not permit him or her to purchase stock under the
New ESPP at a rate which exceeds $25,000 in fair market value of
such stock (determined as of the Offering Date) for each
calendar year in which the option is outstanding. In addition,
we have set 10,000 shares as the maximum number of shares
an employee may purchase on each purchase date. The New ESPP
allows us to increase or decrease this share limit without
stockholder approval. In addition, we will make a pro rata
reduction in the number of shares subject to options outstanding
under the New ESPP if the total number of shares that would
otherwise be purchased on a Purchase Date by all participants
exceeds the number of shares remaining available under the plan.
Provided the employee continues participating in the plan
through the end of an Offering Period, his or her option to
purchase shares is exercised automatically at the end of the
Offering Period, and the maximum number of shares that may be
purchased with accumulated payroll amounts at the applicable
purchase price are issued to the employee.
Rights to purchase stock under the New ESPP are generally not
transferable by the employee.
Termination
of Employment; Withdrawal from New ESPP
Termination of a participants employment for any reason,
including retirement or death, or the failure of the participant
to remain in the continuous employ of Symantec for at least
20 hours per week and more than five months in any calendar
year during the applicable Offering Period, cancels his or her
option to purchase and terminates his or her participation in
the New ESPP immediately. In such event, the payroll deductions
credited to the participants account will be returned
(without interest unless required by applicable law) to him or
her or, in the case of death, to the person or persons entitled
thereto as provided in the New ESPP.
A participant may withdraw from the New ESPP at any time during
an Offering Period prior to a date specified for administrative
reasons prior to the Purchase Date. Upon withdrawal, the
participants accumulated payroll amounts are returned to
him or her, without interest unless required by applicable law.
Adjustments
upon Changes in Capitalization; Corporate
Transactions
Subject to any required action by our stockholders, in the event
any change is made in Symantecs capitalization during an
Offering Period, such as a stock split, stock dividend,
subdivision, combination, reclassification or similar change
that results in an increase or decrease in the number of shares
of our common stock outstanding without receipt of consideration
by Symantec, proportionate adjustment shall be made to the
number of shares remaining available for issuance under the New
ESPP, the purchase price and number of shares subject to
then-outstanding options under the New ESPP, and the maximum
number of shares that may be purchased on any purchase date.
In the event of a proposed dissolution or liquidation of
Symantec, the Offering Period then in progress will terminate
immediately prior to the consummation of the transaction, unless
our Board provides otherwise in connection with the transaction.
In the event of a sale of all or substantially all of our
assets, or if we (or one of our affiliated companies) merge with
or into another corporation or engage in a similar acquisition
transaction, each then-outstanding option under the New ESPP
will be assumed or an equivalent substitute option substituted
by our successor entity, unless our Board elects in lieu of that
treatment to simply shorten the Offering Period then in progress
and allow each outstanding option to be automatically exercised
on a specified date preceding closing of the transaction. If our
Board sets an earlier Purchase Date in connection with an asset
sale, merger or similar transaction, the Offering Period then in
progress will terminate on that Purchase Date.
28
Amendment
and Termination of the New ESPP
Our Board may at any time amend or terminate the New ESPP
without the approval of the stockholders or employees, except
that a termination generally cannot adversely affect options
then outstanding (although the New ESPP provides for certain
exceptions to this rule). We will seek stockholder approval of
any plan amendment where stockholder approval is required under
applicable law, including if we seek to increase the number of
shares of common stock reserved for issuance under, or expand
the class of employees eligible to participate in, the New ESPP.
The New ESPP expires ten years from the date the stockholders
approve it, unless sooner terminated by the Board or unless we
obtain stockholder approval of an amendment that extends the
plans term.
New Plan
Benefits
Because benefits under the New ESPP will depend on the fair
market value of our common stock at various future dates, it is
not possible to determine the benefits that will be received by
employees if the New ESPP is approved by our stockholders.
During fiscal year 2008, three Named Executive Officers
participated in the Old ESPP.
U.S.
Federal Income Tax Consequences
The following is a brief summary of the general
U.S. federal income tax consequences to U.S. taxpayers
and Symantec of shares purchased under the Statutory Plan, which
is a sub-plan of the New ESPP. This summary is not complete and
does not discuss the tax consequences of a participants
death or the income tax laws of any state or foreign country in
which the participant may reside. Tax consequences for any
particular individual may be different.
The Statutory Plan and the options granted under the Statutory
Plan are intended to qualify for favorable federal income tax
treatment associated with rights granted under an employee
stock purchase plan that qualifies under provisions of
Section 423 of the Code.
Amounts of a participants compensation withheld for the
purchase of shares of our common stock under the Statutory Plan
will be subject to regular income and employment tax withholding
as if such amounts were actually received by the employee. Other
than this, no income will be taxable to a participant until sale
or other disposition of the acquired shares. Under current law,
no other withholding obligation applies to the events under the
Statutory Plan.
Tax treatment upon transfer of the purchased shares depends on
how long the participant holds the shares from the Purchase Date
to the transfer date. If the stock is disposed of more than two
years after the Offering Date, and more than one year after the
Purchase Date for the stock being transferred, then the
lesser of (i) the excess of the fair market value of
the stock at the time of such disposition over the purchase
price or (ii) the excess of the fair market value of the
stock as of the Offering Date over the purchase price
(determined as of the Offering Date) will be treated as ordinary
income. Any further gain will be taxed as a long-term capital
gain. Under current law, long-term capital gains are generally
subject to lower tax rates than ordinary income. If the fair
market value of the stock on the date of the disposition is less
than the purchase price paid for the shares, there will be no
ordinary income, and any loss recognized will be a capital loss.
If the stock is sold or disposed of before the expiration of
either of the holding periods described above, then the excess
of the fair market value of the stock on the Purchase Date for
the shares over the purchase price will be treated as ordinary
income at the time of the sale or disposition. The balance of
any gain will be treated as capital gain. Even if the stock is
disposed of for less than its Purchase Date fair market value,
the same amount of ordinary income is attributed to the
participant, and a capital loss is recognized equal to the
difference between the sales price and the fair market value of
the stock on such Purchase Date. Any capital gain or loss will
be short-term or long-term, depending on how long the stock has
been held.
There are no U.S. federal income tax consequences to
Symantec by reason of the grant or exercise of options under the
New ESPP. Symantec is entitled to a deduction to the extent
amounts are taxed as ordinary income to a participant.
29
Symantec may also grant options under Non-Statutory Plans to
employees of our designated subsidiaries and affiliates that do
not participate in the Statutory Plan. The specific terms of
such Non-Statutory Plans are not yet known, accordingly it is
not possible to discuss with certainty the relevant tax
consequences of these Non-Statutory Plans. The Non-Statutory
Plans will be sub-plans of the New ESPP that are generally not
intended to qualify under the provisions of Sections 421
and 423 of the Code. Therefore, it is likely that at the time of
the exercise of an option under a Non-Statutory Plan, an
employee subject to tax under the Code would recognize ordinary
income equal to the excess of the fair market value of the stock
on the date of exercise and the purchase price, Symantec would
be able to claim a tax deduction equal to this difference, and
Symantec would be required to withhold employment taxes and
income tax at the time of the purchase.
Accounting
Treatment
Based on Statement of Financial Accounting Standards
No. 123(R), Symantec recognizes compensation expense in
connection with options outstanding under the New ESPP. So long
as Symantec continues issuing shares under the New ESPP with a
purchase price at a discount to the fair market value of its
stock, Symantec will recognize compensation expense which will
be determined by the level of participation in the New ESPP. As
mentioned above, in 2005 we amended the structure of the Old
ESPP in a manner that we believe decreased the amount of
compensation expense we are required to recognize and we intend
to maintain that structure when we commence operation of the New
ESPP.
THE BOARD
RECOMMENDS A VOTE FOR APPROVAL OF
PROPOSAL NO. 3
30
PROPOSAL NO. 4
APPROVAL
OF THE MATERIAL TERMS OF THE
AMENDED AND RESTATED SYMANTEC SENIOR EXECUTIVE INCENTIVE
PLAN
You are being asked to approve certain material terms of the
Symantec Senior Executive Incentive Plan (as amended and
restated, the SEIP) to allow future
performance-based compensation awards under the SEIP to be fully
deductible by Symantec under Section 162(m) of the Code.
The Board approved an amendment and restatement of the SEIP on
April 29, 2008, subject to the stockholder approval of
certain material terms of the SEIP we are seeking at the annual
meeting under this Proposal No. 4. Stockholder
approval of this Proposal No. 4 will be effective with
respect to awards granted under the SEIP following the date of
the annual meeting and will not affect any awards granted prior
to August 21, 2008.
Background
The SEIP is a plan structured so as to qualify compensation paid
under it to certain executive officers as
performance-based compensation under federal tax
rules applicable to public companies. Section 162(m) of the
Code generally disallows a tax deduction to public companies for
compensation in excess of $1 million paid during a single
year to the companys Chief Executive Officer or any of the
three other most highly compensated executive officers. Certain
performance-based compensation is exempt from this deduction
limit if it meets the requirements of Section 162(m),
including a requirement that payment of the compensation be
contingent upon achievement of performance goals that are
established and administered in a manner specified under
Section 162(m). In addition, to qualify as
performance-based compensation, the compensation (or the plan
under which it is granted, including the possible performance
goals that may be used) must have been approved by stockholders,
there must be a limit on the amount of compensation that may be
paid to an employee during a specified period of time, and
achievement of the applicable performance goals must be
substantially uncertain at the time the individual awards are
established. Finally, Section 162(m) imposes certain
independence requirements on the members of the Board-level
committee administering the performance-based compensation
program.
We currently operate two cash incentive award programs under the
SEIP, our Annual Incentive Plan which has a performance period
that coincides with our fiscal year, and our Long-Term Incentive
Plan which has two-year performance periods. These programs are
described in more detail in our Compensation Discussion
& Analysis (beginning on page 42). Operating
these two programs under the SEIP allows us to fully deduct
amounts paid under them to our named executive officers. To
continue to operate the SEIP as a plan under which
performance-based compensation may be granted, we seek your
approval of the performance goals (set forth below) that may be
used in connection with the grant of awards under the SEIP.
Section 162(m) requires that stockholders re-approve such
performance goals every five years. Our stockholders are
considered to have last approved the SEIPs performance
goals when they originally approved the SEIP in August 2003.
Approval of this Proposal No. 4 will allow us to grant
tax-qualified awards under the SEIP until September 22,
2013.
Your approval of this Proposal No. 4 will constitute
approval of all the material terms of the SEIP for purposes of
Section 162(m), as described in this
Proposal No. 4.
If our stockholders do not approve this
Proposal No. 4, then the SEIP will continue in its
current form until the current stockholder approval of the plan
expires on August 21, 2008 (although certain amendments
made to the SEIP by our Compensation Committee that do not
require stockholder approval will be given effect) and, after
that date, we will no longer be able to grant awards that
qualify as performance-based compensation under
Section 162(m) from the SEIP. While we would continue to be
permitted to award and pay cash incentive bonuses to our
executive officers outside the SEIP regardless of whether our
stockholders approve this Proposal No. 4, we would
cease making awards under the SEIP following the annual meeting
if our stockholders in fact do not approve this
Proposal No. 4, and as a result, we might not be able
to deduct some or all of the cash bonus amounts paid to
executive officers in future years.
31
General
Information on, and Material Terms of, the SEIP
The SEIP is a component of Symantecs overall strategy to
pay its employees for delivering measurable results. The
purposes of the SEIP are to motivate senior executives (as
defined in the SEIP) by tying compensation to performance, to
reward exceptional performance that supports Symantec objectives
and to attract and retain top-performing senior executives.
Additional information about amounts paid under the SEIP to our
named executive officers during our last completed fiscal year
are contained in the Summary Compensation Table (beginning on
page 54) and the Grants of Plan-Based Awards Table
(beginning on page 56). Additional discussion about the
SEIP is included in the Compensation Discussion & Analysis
section (beginning on page 42).
The following is a summary of the principal provisions of the
SEIP, as amended and restated by this proposal. This summary is
qualified in its entirety by reference to the full text of the
SEIP. A copy of the SEIP has been filed with the SEC with this
proxy statement, and any stockholder who wishes to obtain a copy
of the SEIP may do so by written request to the Secretary at
Symantecs headquarters in Cupertino, California.
Performance Goals. To qualify awards as
performance-based compensation under Section 162(m), the
payment of the value of such awards must be made contingent upon
achievement of performance goals approved by the Compensation
Committee and our stockholders. The SEIP permits us to use one
or more of the following performance goals with respect to
awards:
|
|
|
|
|
income, including net income and
operating income
|
|
market share
|
|
cash flow, including cash flow from
operations
|
stockholder return
|
|
return on net assets
|
|
new product releases
|
earnings per share
|
|
return on equity
|
|
employee productivity and satisfaction
metrics
|
revenue, including growth in revenue
|
|
return on investment
|
|
strategic plan development and
implementation (including individual performance objectives that
relate to achievement of the Companys or any business
units strategic plan)
|
The above goals differ from the goals in the plan last approved
by the stockholders by the addition of the last goal regarding
strategic plan development and implementation.
The Compensation Committee may adjust its evaluation of actual
performance under a performance goal to exclude certain events
that occur during a performance period such as asset
write-downs; currency effects; litigation or claims judgments or
settlements; changes in tax law, accounting principles or other
laws or regulations affecting reported results; accruals for
reorganization or restructuring programs; and other
extraordinary non-recurring items described in published
accounting rules
and/or in
Managements Discussion and Analysis of Financial
Conditions and Results of Operations in our annual report to
stockholders for the year.
Annual Cash Limit. The maximum aggregate
amount of cash awards that may be granted during any single
fiscal year to any individual employee is $5,000,000. We do not
seek to increase this annual cash limit.
Administration. As stated above, the
Compensation Committee administers the SEIP. Compensation
Committee members must qualify as outside directors
under Section 162(m) in order for awards under the SEIP to
qualify as deductible performance-based compensation under the
Code. All of our Compensation Committee members meet this
requirement. Subject to the terms of the SEIP, the Compensation
Committee has the discretion to determine the key employees who
will receive awards as well as the amounts, terms and conditions
of each award, including the performance period and goal(s) that
apply to the award and whether or not the goal(s) are achieved.
The Compensation Committee may delegate its authority to
administer awards to a separate committee or to one or more
individuals who are not members of the Compensation Committee,
but only with respect to participants whom it believes will not
be considered covered persons under
Section 162(m).
Eligibility. Senior executive officers subject
to Section 16 of the Securities Exchange Act of 1934 are
eligible to participate in the SEIP, as well as other employees
who may be designated from time to time by the
32
Compensation Committee. In selecting participants for the SEIP,
the Compensation Committee will choose those senior executives
whom the Compensation Committee believes are most likely to make
significant contributions to Symantecs success. The actual
number of employees who will receive awards under the SEIP
cannot be determined in advance because eligibility for
participation is in the discretion of the Compensation
Committee. As of July 4, 2008, there are nine employees who
are executive officers subject to Section 16 of the
Exchange Act. Nine Symantec executive officers participated in
the SEIP during fiscal 2008. Although participation in future
years is in the discretion of the Compensation Committee, each
executive officer has an interest in Proposal No. 4.
Information about fiscal year 2009 awards is presented below
under New Plan Benefits.
SEIP Awards. Under the SEIP, the Compensation
Committee will determine the fiscal year or a performance period
of some other duration for measuring actual performance. The
Compensation Committee will establish for each performance
period the performance goals (from among those listed above)
that apply and the target levels of required performance, as
well as a formula for calculating a participants award
based on actual performance compared to the pre-established
performance goals. The Compensation Committee will establish the
performance goals at a time when the outcome of the goal is
substantially uncertain in a manner and at such time as is a
permitted method of establishing performance goals under
Section 162(m) (generally soon after the performance period
commences).
The Compensation Committee may set performance periods and
performance goals that differ from participant to participant.
For example, it may designate performance goals based on either
company-wide or business unit or segment results, as appropriate
for the participants specific responsibilities. The
Compensation Committee may also measure the performance goals
annually or cumulatively over a period of years or over a period
shorter than one year, on an absolute basis, or relative to a
pre-established target, to previous years results or to a
designated comparison group. After the end of each performance
period, the Compensation Committee will determine the extent to
which the performance goals for each participant were achieved.
The Compensation Committee will determine the actual award (if
any) for each participant by the level of actual performance
achieved. However, the Compensation Committee retains discretion
to eliminate or reduce the actual award payable to any
participant below that which otherwise would be payable under
the applicable formula at any time before the award is paid. The
Compensation Committee also has discretion to make certain
adjustments to take into account certain extraordinary events
occurring during the performance period (as described above).
In order to earn and receive payment of an award under the SEIP,
the participant must be an active employee and on
Symantecs payroll on either (a) the last day of the
fiscal year (or performance period) to which the award relates
or (b) the date of payment or vesting, in each case as
specified in the documents governing the specific award. The
Compensation Committee may make exceptions to this requirement
in the case of retirement, death or disability, or in the case
of a corporate change in control, although it may exercise this
discretion only if permitted under the requirements applicable
to performance-based compensation under Section 162(m).
Awards granted under the SEIP are not transferable by a
participant, except by will or the laws of descent and
distribution.
SEIP Amendments and Termination; Stockholder
Approval. The Board may amend or terminate the
SEIP at any time and for any reason. In order to maintain the
plans qualification under Section 162(m), certain
material amendments of the SEIP will require stockholder
approval. In addition, to maintain qualification of this plan
under Section 162(m) with respect to awards granted
thereafter, we will be required to obtain stockholder approval
of the performance goals no later than September 22, 2013.
SEIP Benefits. Because payments of cash awards
under the SEIP will be determined by comparing actual
performance to the performance goals established by the
Compensation Committee under this plan, it is not possible to
predict the amount of future benefits that will be paid under
the SEIP for any future performance period. The Summary
Compensation Table (beginning on page 54) sets forth the
dollar amount of awards that were earned by our named executive
officers with respect to our fiscal year 2008.
33
New Plan
Benefits
All awards to executive officers are based on actual performance
during fiscal 2009 and are made at the discretion of the
Compensation Committee. Therefore, the benefits and amounts that
will be received or allocated under the SEIP are not
determinable at this time. Cash incentive programs we currently
operate under the SEIP maintain the following performance goals:
for the one-year performance period under our Annual Incentive
Plan that coincides with our fiscal year 2009, earnings per
share, revenue and only with respect to certain persons a
measure related to business unit management; and for the
one-year performance period covering our fiscal year 2009 under
our Long-Term Incentive Plan, an operating cash flow metric.
Target amounts for our continuing named executive officers under
the Annual Incentive Plan and the
Long-Term
Incentive Plan for the respective performance periods beginning
on the start of our fiscal year 2009 are as follows:
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|
|
|
|
|
|
Target Amount
|
|
|
Target Amount
|
|
|
|
for Fiscal Year 2009
|
|
|
for Fiscal Year LTIP Period
|
|
|
|
Cash Awards under
|
|
|
Beginning on 3/29/08
|
|
Name and Principal Position
|
|
Annual Incentive Plan
|
|
|
for Cash Awards under LTIP
|
|
|
John W. Thompson,
|
|
$
|
1,200,000
|
|
|
$
|
2,000,000
|
|
Chairman of the Board and CEO
|
|
|
|
|
|
|
|
|
Enrique T. Salem,
|
|
$
|
625,000
|
|
|
$
|
1,000,000
|
|
Chief Operating Officer
|
|
|
|
|
|
|
|
|
James A. Beer,
|
|
$
|
528,000
|
|
|
$
|
470,000
|
|
Executive Vice President, Chief Financial Officer
|
|
|
|
|
|
|
|
|
Gregory W. Hughes,
|
|
$
|
380,688
|
|
|
$
|
330,000
|
|
Chief Strategy Officer
|
|
|
|
|
|
|
|
|
Janice Chaffin,
|
|
$
|
360,000
|
|
|
$
|
330,000
|
|
Group President, Consumer Business Unit
|
|
|
|
|
|
|
|
|
Thomas W. Kendra,
|
|
$
|
|
|
|
$
|
|
|
Former Group President, Security and Compliance Segment
|
|
|
|
|
|
|
|
|
Gregory S. Butterfield,
|
|
$
|
|
|
|
$
|
|
|
Former Group President, Altiris Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive officer group (9 persons)
|
|
$
|
4,176,688
|
|
|
$
|
5,320,000
|
|
Non-executive director group (9 persons)*
|
|
$
|
|
|
|
$
|
|
|
Non-executive officer employee group*
|
|
$
|
|
|
|
$
|
|
|
|
|
* |
Although we operate a similar bonus plan for employees who are
not executive officers, such bonus awards are not granted under
the SEIP.
|
Federal
Income Tax Information
The following is only a summary of the effect of
U.S. federal income taxation on participants and Symantec
with respect to the grant of awards under the SEIP. It does not
purport to be complete and does not discuss the tax consequences
arising in the context of the participants death or the
income tax laws of any municipality, state or foreign country in
which the participants income or gain may be taxable.
Cash awards granted under the SEIP will cause the participant to
have taxable ordinary income, in the year of receipt, equal to
the cash received. Any cash received will be subject to tax
withholding by Symantec.
The American Jobs Creation Act of 2004 added Section 409A
to the tax code, generally effective January 1, 2005. The
IRS has issued proposed and final regulations that, in part,
give employers until the end of 2008 to effect written
Section 409A implementation in almost all circumstances.
Section 409A covers most programs that defer
34
the receipt of compensation to a year following the year in
which the recipient first had a vested right to the
compensation. It provides rules for elections to defer (if any)
and for timing of payouts. There are significant penalties
placed on the individual employee for failure to comply with
Section 409A. While Section 409A may affect the timing
of our withholding obligations, it does not affect our ability
to deduct deferred compensation. We operate the SEIP in a manner
that exempts it from application of Section 409A, although
the SEIP allows us to offer deferral programs to participants
with respect to their plan awards. To the extent we adopt such
deferral programs from time to time, we would intend to operate
them so that the additional taxes and other penalties provided
for under Section 409A would not apply to amounts paid
under the SEIP.
As discussed above, our purpose in seeking stockholder approval
with respect to the SEIP under this Proposal No. 4 is
to qualify future SEIP awards as performance-based compensation
under Section 162(m) so that we may fully deduct amounts
paid under these awards.
THE BOARD RECOMMENDS A VOTE FOR APPROVAL
OF PROPOSAL NO. 4
35
PROPOSAL NO. 5
RATIFICATION
OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
The Audit Committee has selected KPMG as Symantecs
principal independent registered public accounting firm to
perform the audit of Symantecs consolidated financial
statements for fiscal year 2009. As a matter of good corporate
governance, the Audit Committee has decided to submit its
selection of independent audit firm to stockholders for
ratification. In the event that this selection of KPMG is not
ratified by a majority of the shares of common stock present or
represented at the annual meeting and entitled to vote on the
matter, the Audit Committee will review its future selection of
KPMG as Symantecs independent registered public accounting
firm.
The Audit Committee first approved KPMG as the companys
independent auditors in September 2002, and KPMG audited
Symantecs financial statements for Symantecs 2008
fiscal year. Representatives of KPMG are expected to be present
at the meeting, in which case they will be given an opportunity
to make a statement at the meeting if they desire to do so, and
will be available to respond to appropriate questions.
Principal
Accountant Fees and Services
The company regularly reviews the services and fees from its
independent registered public accounting firm. These services
and fees are also reviewed with the Audit Committee annually. In
accordance with standard policy, KPMG periodically rotates the
individuals who are responsible for the companys audit.
Symantecs Audit Committee has determined that the
providing of certain non-audit services, as described below, is
compatible with maintaining the independence of KPMG.
In addition to performing the audit of the companys
consolidated financial statements, KPMG provided various other
services during fiscal years 2008 and 2007. Symantecs
Audit Committee has determined that KPMGs provisioning of
these services, which are described below, does not impair
KPMGs independence from Symantec. The aggregate fees
billed for fiscal years 2008 and 2007 for each of the following
categories of services are as follows:
|
|
|
|
|
|
|
|
|
Fees Billed to Symantec
|
|
2008
|
|
|
2007
|
|
|
Audit fees(1)
|
|
$
|
10,223,009
|
|
|
$
|
9,837,445
|
|
Audit related fees(2)
|
|
|
|
|
|
|
|
|
Tax fees(3)
|
|
|
402,794
|
|
|
|
625,605
|
|
All other fees(4)
|
|
|
359,033
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total fees
|
|
$
|
10,984,836
|
|
|
$
|
10,463,050
|
|
|
|
|
|
|
|
|
|
|
The categories in the above table have the definitions assigned
under Item 9 of Schedule 14A promulgated under the
Securities Exchange Act of 1934, and with respect to
Symantecs 2008 and 2007 fiscal years, these categories
include in particular the following components:
(1) Audit fees include fees for audit
services principally related to the year-end examination and the
quarterly reviews of Symantecs consolidated financial
statements, consultation on matters that arise during a review
or audit, review of SEC filings, audit services performed in
connection with Symantecs acquisitions and statutory audit
fees.
(2) Audit related fees include fees
which are for assurance and related services other than those
included in Audit fees.
(3) Tax fees include fees for tax
compliance and advice.
(4) All other fees include fees for all
other non-audit services, principally for services in relation
to certain information technology audits.
An accounting firm other than KPMG performs internal audit
services for the company. Another accounting firm provides the
majority of Symantecs tax services.
36
Policy on
Audit Committee Pre-Approval of Audit and Permissible Non-Audit
Services of Independent Registered Public Accounting
Firm
The Audit Committees policy is to pre-approve all audit
and permissible non-audit services provided by the independent
registered public accounting firm. These services may include
audit services, audit-related services, tax services and other
services. Pre-approval is detailed as to the particular service
or category of services and is generally subject to a specific
budget. The independent registered public accounting firm and
management are required to periodically report to the Audit
Committee regarding the extent of services provided by the
independent registered public accounting firm in accordance with
this pre-approval, and the fees for the services performed to
date. The Audit Committee may also pre-approve particular
services on a
case-by-case
basis.
All of the services relating to the fees described in the table
above were approved by the Audit Committee.
THE BOARD RECOMMENDS A VOTE FOR APPROVAL
OF PROPOSAL NO. 5
37
OUR
EXECUTIVE OFFICERS
The names of our executive officers, their ages as of
July 4, 2008, and their positions are shown below.
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Position
|
|
John W. Thompson
|
|
|
59
|
|
|
Chairman of the Board of Directors and Chief Executive Officer
|
Enrique T. Salem
|
|
|
42
|
|
|
Chief Operating Officer
|
James A. Beer
|
|
|
47
|
|
|
Executive Vice President and Chief Financial Officer
|
Gregory W. Hughes
|
|
|
45
|
|
|
Chief Strategy Officer
|
Janice Chaffin
|
|
|
53
|
|
|
Group President, Consumer Business Unit
|
J. David Thompson
|
|
|
41
|
|
|
Group President, Information Technology and Services
|
Arthur F. Courville
|
|
|
49
|
|
|
Executive Vice President, General Counsel and Secretary
|
Rebecca Ranninger
|
|
|
49
|
|
|
Executive Vice President and Chief Human Resources Officer
|
George W. Harrington
|
|
|
56
|
|
|
Senior Vice President, Finance and Chief Accounting Officer
|
The Board chooses executive officers, who then serve at the
Boards discretion. There is no family relationship between
any of the directors or executive officers and any other
director or executive officer of Symantec.
For information regarding Mr. Thompson, please refer to
Proposal No. 1, Election of Directors,
above.
Mr. Salem has served as our Chief Operating Officer
since January 2008. From April 2007 to January 2008,
Mr. Salem had served as our Group President, Worldwide
Sales and Marketing. Mr. Salem previously served as our
Group President, Consumer Products from May 2006 to April 2008,
Senior Vice President, Consumer Products and Solutions from
February 2006 to May 2006, Senior Vice President, Security
Products and Solutions from January 2006 to February 2006,
and as Senior Vice President, Network and Gateway Security
Solutions from June 2004 to February 2006. Prior to joining
Symantec, from 2002 to June 2004, he was President and CEO of
Brightmail Incorporated, an anti-spam software company that was
acquired by Symantec. From 2001 to 2002, Mr. Salem served
as Senior Vice President of Products and Technology at Oblix
Inc., an identity-based security products developer, and from
1999 to 2001, he was Vice President of Technology and Operations
at Ask Jeeves Inc., an online search engine provider. From 1990
to 1999, Mr. Salem led the security business unit at
Symantec. Mr. Salem received a Bachelor of Arts in computer
science from Dartmouth College.
Mr. Beer has served as our Executive Vice President
and Chief Financial Officer since February 2006. From 1991
to February 2006, Mr. Beer held various management
positions in finance and operations at American Airlines Inc., a
passenger airline company, including leading the airlines
European and Asia Pacific businesses. He most recently served as
Senior Vice President and Chief Financial Officer of AMR
Corporation and AMRs principal subsidiary, American
Airlines, since January 2004. Mr. Beer holds a Bachelor of
Science in aeronautical engineering from Imperial College,
London University and a masters degree in business
administration from Harvard Business School.
Mr. Hughes has served as our Chief Strategy Officer
since January 2008. From April 2007 to January 2008,
Mr. Hughes served as our Group President, Global Services.
He joined Symantec through the companys merger with
Veritas in July 2005 and served as our Executive Vice President,
Services and Support, from July 2005 to April 2007. At
Veritas, Mr. Hughes most recently served as Executive Vice
President, Global Services from October 2003 to July 2005.
Mr. Hughes joined Veritas after a
10-year
career at McKinsey & Co., a global management
consulting service provider, where he most recently served as a
Partner. During his
10-year
career at McKinsey, he founded and led the North American
Software Industry practice and worked as a consultant to senior
executives across a range of industries on
information-technology related issues. Mr. Hughes holds a
Master of Business Administration degree from the Stanford
Graduate School of Business, and a bachelors degree in
electrical
38
engineering and a masters degree in electrical engineering
and computer science from Massachusetts Institute of Technology.
Ms. Chaffin has served as our Group President,
Consumer Business Unit since April 2007. From May 2006 to
April 2007, Ms. Chaffin served as our Executive Vice
President and Chief Marketing Officer. Ms. Chaffin joined
Symantec in May 2003 and served as our Senior Vice President and
Chief Marketing Officer from May 2003 to May 2006. Prior to
Symantec, Ms. Chaffin spent 21 years at
Hewlett-Packard Company, a global provider of products,
technologies, solutions and services, where she held a variety
of marketing and business management positions and most recently
served as Vice President of Enterprise Marketing and Solutions.
Ms. Chaffin is a member of the board of directors of
Informatica Corporation, an enterprise data integration software
and services provider. She graduated summa cum laude from the
University of California, San Diego with a bachelors
degree and earned a masters degree in business
administration from the University of California, Los Angeles,
where she was a Henry Ford Scholar.
Mr. Thompson has served as our Group President,
Information Technology and Services since January 2008. From
February 2006 to January 2008, he had served as Symantecs
Executive Vice President and Chief Information Officer. Prior to
joining Symantec, Mr. Thompson was Senior Vice President
and Chief Information Officer for Oracle Corporation, a global
enterprise software company, from January 2005 to
January 2006. Before joining Oracle, Mr. Thompson was
Vice President of Services and Chief Information Officer at
PeopleSoft, Inc., an enterprise application software products
company, from 1995 to January 2005.
Mr. Courville has served as our Executive Vice
President since May 2006, General Counsel since
February 2006 and as Secretary since 1999. He previously
served as Senior Vice President, Corporate Legal Affairs from
July 2005 to February 2006, and as Vice President and General
Counsel from 1999 to July 2005. Mr. Courville joined
Symantec in 1993, and was promoted to Director of the Legal
Department in 1994. In 1997, Mr. Courville took the
position of Director of Product Management for the Internet
Tools Business Unit of Symantec, where he was responsible for
all product management activities related to Java programming
and HTML editing products. Mr. Courville later returned to
the legal department as Senior Director before his appointment
as Vice President and General Counsel in 1999. Prior to joining
Symantec, Mr. Courville practiced law with the law firm of
Gibson, Dunn & Crutcher. Mr. Courville holds a
Bachelor of Arts in Economics from Stanford University, a law
degree from UC Berkeley School of Law and a Masters of Business
Administration from the Haas School of Business at the
University of California, Berkeley.
Ms. Ranninger has served as our Executive Vice
President and Chief Human Resources Officer since May 2006.
Ms. Ranninger previously served as Senior Vice President,
Human Resources from 2000 to May 2006. From 1997 to 2000, she
held the position of Vice President, Human Resources. Prior to
1997, Ms. Ranninger served for over six years as an
attorney in the legal department. Before joining Symantec in
1991, Ms. Ranninger was a business litigator with the law
firm of Heller Ehrman White & McAuliffe.
Ms. Ranninger graduated magna cum laude from Harvard
University with a bachelors degree, earned a
bachelors degree in jurisprudence from Oxford University
and a Juris Doctorate from Stanford University.
Mr. Harrington has served as our Senior Vice
President, Finance, and Chief Accounting Officer since
January 2007. In this capacity, Mr. Harrington serves
as the Companys principal accounting officer.
Mr. Harrington joined Symantec in May 2006, and served as
Senior Vice President, Finance Operations from May 2006 to
January 2007. Prior to joining Symantec, Mr. Harrington had
served as Senior Vice President and Chief Financial Officer of
BMC Software, Inc., a software solutions provider, from March
2004 to September 2005, and had served in a variety of senior
finance roles at International Business Machines Corporation, a
global information technology company, since 1981. As Vice
President of Finance for IBM Software Group, Mr. Harrington
was the senior executive responsible for all financial and IT
aspects of IBMs $13 billion software organization.
Mr. Harrington also served as the Chief Accountant for IBM.
In addition, he served as Vice President, Finance for IBM
Americas, responsible for all financial aspects of a
$38 billion IBM division. Mr. Harrington also served
in a range of finance leadership positions for IBMs
Americas, Asia Pacific and European operations.
Mr. Harrington earned a Bachelor of Arts in Political
Science and a Masters in Business Administration from Brigham
Young University.
39
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of July 4,
2008, with respect to the beneficial ownership of Symantec
common stock by (i) each stockholder known by Symantec to
be the beneficial owner of more than 5% of Symantec common
stock, (ii) each member of the Board , (iii) the named
executive officers of Symantec included in the Summary
Compensation Table appearing on page 54 of this proxy
statement and (iv) all current executive officers and
directors of Symantec as a group.
Beneficial ownership is determined under the rules of the SEC
and generally includes voting or investment power with respect
to securities. Unless otherwise indicated below, the persons and
entities named in the table have sole voting and sole investment
power with respect to all shares beneficially owned, subject to
community property laws where applicable. Percentage ownership
is based on 837,672,679 shares of Symantec common stock
outstanding as of July 4, 2008 (excluding shares held in
treasury). Shares of common stock subject to stock options and
restricted stock units vesting on or before September 2,
2008 (within 60 days of July 4, 2008) are deemed
to be outstanding and beneficially owned for purposes of
computing the percentage ownership of such person but are not
treated as outstanding for purposes of computing the percentage
ownership of others.
|
|
|
|
|
|
|
|
|
|
|
Amount and
|
|
|
|
|
|
|
Nature of
|
|
|
|
|
|
|
Beneficial
|
|
|
Percent
|
|
Name and Address of Beneficial Owner
|
|
Ownership
|
|
|
of Class
|
|
|
5% Beneficial Owner
|
|
|
|
|
|
|
|
|
UBS (AG)(1)
|
|
|
71,772,291
|
|
|
|
8.6
|
%
|
Southeastern Asset Management(2)
|
|
|
49,448,975
|
|
|
|
5.9
|
%
|
Barclays Global Investors(3)
|
|
|
47,475,038
|
|
|
|
5.7
|
%
|
Directors and Executive Officers
|
|
|
|
|
|
|
|
|
John W. Thompson(4)
|
|
|
9,117,023
|
|
|
|
1.1
|
%
|
Enrique T. Salem(5)
|
|
|
537,946
|
|
|
|
*
|
|
James A. Beer(6)
|
|
|
265,561
|
|
|
|
*
|
|
Gregory W. Hughes(7)
|
|
|
1,084,055
|
|
|
|
*
|
|
Janice Chaffin(8)
|
|
|
628,493
|
|
|
|
*
|
|
Michael A. Brown(9)
|
|
|
201,645
|
|
|
|
*
|
|
William T. Coleman(10)
|
|
|
181,189
|
|
|
|
*
|
|
Frank E. Dangeard
|
|
|
16,936
|
|
|
|
*
|
|
Geraldine B. Laybourne
|
|
|
1,433
|
|
|
|
*
|
|
David L. Mahoney(11)
|
|
|
144,514
|
|
|
|
*
|
|
Robert S. Miller(12)
|
|
|
266,266
|
|
|
|
*
|
|
George Reyes(13)
|
|
|
289,723
|
|
|
|
*
|
|
Daniel H. Schulman(14)
|
|
|
112,661
|
|
|
|
*
|
|
V. Paul Unruh(15)
|
|
|
203,204
|
|
|
|
*
|
|
Former Executive Officers
|
|
|
|
|
|
|
|
|
Gregory S. Butterfield
|
|
|
28,612
|
|
|
|
*
|
|
Thomas W. Kendra(16)
|
|
|
598,264
|
|
|
|
*
|
|
All Symantec executive officers and directors as a group
(18 persons)(17)
|
|
|
14,130,845
|
|
|
|
1.7
|
%
|
|
|
|
* |
|
Less than 1%. |
|
(1) |
|
Based solely on a Schedule 13G filing made by UBS on
February 11, 2008. Reflects the securities beneficially
owned by the UBS Global Asset Management business group of UBS
AG and its subsidiaries and affiliates on behalf of its clients.
This shareholders address is Bahnhofstrasse 45, PO BOX
CH-8021, Zurich, Switzerland. |
40
|
|
|
(2) |
|
Based solely on a Schedule 13G filing made by Southeastern
Asset Management on February 13, 2008. Reflects the
securities beneficially owned by the Southeastern Asset
Management on behalf of its clients. This shareholders
address is 6410 Poplar Avenue, Suite 900, Memphis,
Tennessee 38119. |
|
(3) |
|
Based solely on a Schedule 13G filing made by Barclays
Global Investors on February 6, 2008. Reflects the
securities beneficially owned by the Barclays Global Investors
on behalf of its clients. This shareholders address is 45
Fremont Street, San Francisco, CA 94105. |
|
(4) |
|
Includes 7,678,545 shares subject to options that will be
exercisable as of September 2, 2008. |
|
(5) |
|
Includes 385,731 shares subject to options that will be
exercisable as of September 2, 2008. |
|
(6) |
|
Includes 234,375 shares subject to options that will be
exercisable as of September 2, 2008. |
|
(7) |
|
Includes 1,010,482 shares subject to options that will be
exercisable as of September 2, 2008. |
|
(8) |
|
Includes 550,520 shares subject to options that will be
exercisable as of September 2, 2008. |
|
(9) |
|
Includes 172,380 shares subject to options that will be
exercisable as of September 2, 2008. |
|
(10) |
|
Includes 160,250 shares subject to options that will be
exercisable as of September 2, 2008. |
|
(11) |
|
Includes 102,250 shares subject to options that will be
exercisable as of September 2, 2008. |
|
(12) |
|
Includes 144,250 shares subject to options that will be
exercisable as of September 2, 2008. |
|
(13) |
|
Includes 236,250 shares subject to options that will be
exercisable as of September 2, 2008. |
|
(14) |
|
Includes 80,250 shares subject to options that will be
exercisable as of September 2, 2008. |
|
(15) |
|
Includes 177,380 shares subject to options that will be
exercisable as of September 2, 2008. |
|
(16) |
|
Includes 465,520 shares subject to options that will be
exercisable as of September 2, 2008. |
|
(17) |
|
Includes 11,800,886 shares subject to options that will be
exercisable as of September 2, 2008. |
Symantec has adopted a policy that executive officers and
members of the Board hold an equity stake in the company. The
policy requires each executive officer to hold a minimum number
of shares of Symantec common stock. Newly appointed executive
officers are not required to immediately establish their
position, but are expected to make regular progress to achieve
it. The Compensation Committee reviews the minimum number of
shares held by the executive officers and directors from time to
time. The purpose of the policy is to more directly align the
interests of our executive officers and directors with our
stockholders.
Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16 of the Exchange Act requires Symantecs
directors and officers, and any persons who own more than 10% of
Symantecs common stock, to file initial reports of
ownership and reports of changes in ownership with the SEC. Such
persons are required by SEC regulation to furnish Symantec with
copies of all Section 16(a) forms that they file.
Based solely on its review of the copies of such forms furnished
to Symantec and written representations from the directors and
executive officers, Symantec believes that all
Section 16(a) filing requirements were met in fiscal year
2008.
41
EXECUTIVE
COMPENSATION AND RELATED INFORMATION
COMPENSATION
DISCUSSION & ANALYSIS (CD&A)
INTRODUCTION
Our
Compensation Philosophy
Our executive compensation programs are intended to further our
success as a market leader in the information technology
industry. In structuring and overseeing these programs, we focus
on achievement of corporate and individual performance
objectives, attracting and retaining highly-qualified senior
leadership, and enhancement of long-term stockholder value.
A number of principles and circumstances inform our executive
compensation decisions. We believe that we have an excellent
executive management team and recognize that that team plays a
critical role in enabling us to achieve superior Company
performance. An important principle driving our compensation
programs is our belief that it benefits all our constituencies
for managements compensation to be tied to the
Companys current and long-term performance. As a result,
at-risk pay comprises a significant portion of our executive
compensation, in particular for individuals holding more senior
and influential positions at Symantec.
We believe it is important to continue to attract, appropriately
motivate and retain highly-qualified executives who are
energetically committed to Symantecs success. We look to
relevant market and industry practices to structure compensation
packages that are competitive in the markets in which we compete
for executive talent. While we strive for a basic level of
internal pay equity among our management team members, we also
believe that it is important to reward outstanding individual
performance, team success, and Company-wide results.
We are also sensitive to our need to balance the interests of
our executives with those of our stockholders, especially when
our compensation decisions might increase our cost structure or
stockholder dilution. We work hard to appropriately balance the
interests of all our constituencies our executive
officers, the remainder of our employee base, our stockholders,
our business partners and our community.
Summary
of Compensation Matters During Fiscal 2008
Fiscal 2008 was a successful year for the company during which
we achieved strong performance on the core financial metrics
linked to our executive compensation programs
revenue, earnings per share and cash flow from operations. Our
executive officers were compensated consistent with our
pay-for-results compensation philosophy and in keeping with the
terms of our compensation arrangements. Specifically, as
discussed more fully below, we exceeded our revenue and EPS
targets under our Executive Annual Incentive Plan and our cash
flow from operations target under our FY08 Long Term Incentive
Plan (the LTIP).
Roles
of Our Compensation Committee, Executive Officers and
Consultants in our Compensation Process
The Committee, which is comprised of independent directors,
establishes and oversees the overall strategy for employee
compensation, including our executive compensation programs. For
more details about the Committees functions and additional
information about Committee members, see the Corporate
Governance Standards and Director Independence section
(beginning on page 5) and the Board Committees and
Their Functions section (beginning on page 7).
The Committee is responsible for overseeing all of the
Companys compensation programs, including general employee
and Board of Director compensation. This CD&A describes how
the Committee approached and fulfilled that responsibility in
fiscal 2008 with respect to our named executive officers, or
NEOs. For fiscal 2008, our NEOs who remained executive officers
of Symantec at the end of the year were:
|
|
|
|
|
John W. Thompson, Chairman and Chief Executive Officer
|
|
|
|
Enrique T. Salem, Chief Operating Officer
|
|
|
|
James A. Beer, Executive Vice President and Chief Financial
Officer
|
42
|
|
|
|
|
Gregory W. Hughes, Chief Strategy Officer
|
|
|
|
Janice Chaffin, Group President, Consumer Business Unit
|
We refer to the five executives above in some cases as our
continuing named executive officers, or NEOs. In
addition, consistent with SEC rules and regulations, our named
executive officers for fiscal 2008 include the following two
individuals who were no longer serving as executive officers as
of the end of the year:
|
|
|
|
|
Gregory S. Butterfield, Former Group President, Altiris Segment
and Interim Group President, Data Center Management Segment
|
|
|
|
Thomas W. Kendra, Former Group President, Security and Data
Management Segment.
|
The independent directors of the Board evaluate the CEOs
performance and the Committee then reviews and recommends to the
independent members of the Board all compensation arrangements
for the CEO. After discussion, the independent members of the
Board approve the CEOs compensation. The Committee also
discusses the performance of the other named executive officers
with the CEO, reviews the compensation recommendations that the
CEO submits for the other named executive officers, makes any
appropriate adjustments, and approves their compensation.
The Committee retains Mercer, an outside consulting firm, to
provide advice and ongoing recommendations on executive
compensation matters. Mercer provides the Committee with advice
on executive and general compensation matters, and the
Compensation Committee oversees Mercers engagement. Mercer
representatives meet informally with the Committee Chair and the
Chief Human Resources Officer and formally with the Committee
during the Committees regular meetings, including from
time to time in executive sessions without any members of
management present. We have worked with Mercer since fiscal
2004, and paid them approximately $220,000 for their services
with respect to fiscal 2008.
The Committee establishes our compensation philosophy and
approves our compensation programs and solicits input and advice
from several of our executive officers and Mercer. As mentioned
above, our CEO provides the Board and Committee with feedback on
the performance of our executive officers and makes compensation
recommendations for the executives to the Committee for their
approval. Our CEO, CFO, Chief Human Resources Officer, and Vice
President, Legal, regularly attend the Committees meetings
to provide: their perspectives on competition in the industry,
the needs of the business, information regarding the
Companys performance, and other advice specific to their
areas of expertise. In addition, at the Committees
direction, Mercer works with our Chief Human Resources Officer
and other members of management to obtain information necessary
for Mercer to make their own recommendations as well as to
evaluate managements recommendations.
FACTORS
WE CONSIDER IN DETERMINING OUR COMPENSATION PROGRAMS
We apply a number of compensation policies and analytic tools in
implementing our compensation principles. These policies and
tools guide the Committee in determining the mix and value of
the compensation components for our named executive officers.
They include:
A Total Rewards Approach: Elements of the
total rewards offered to our executive officers include base
salary, short- and long-term incentives including equity awards,
health benefits, a deferred compensation program, and a
consistent focus on individual professional growth and
opportunities for new challenges.
In determining the mix of these components and the value of each
component, the Committee takes into account the executives
role, the competitive market, individual and Company
performance, business unit performance (where applicable),
internal pay equity and historical compensation. Details of the
various programs and how they support the overall business
strategy are outlined in Compensation Components. In
making its determinations with regard to compensation, the
Committee reviews the various compensation elements for the CEO
and the other named executive officers (including base salary,
target annual bonus, target and accrued award payments under the
Long Term Incentive Plans, and the value of all vested and
unvested equity awards).
Focus on Pay-for-Performance: Our executive
compensation program is designed to reward executives for
results. As described below, the pay mix for named executive
officers emphasizes variable pay in the form of short-
43
and long-term cash and equity awards. Short-term results are
measured by annual financial performance, specifically revenue,
earnings per share and, for our business unit leaders, business
unit performance. Long-term results are measured by
(a) share price appreciation, and (b) achievement of
operating cash flow targets.
Appropriate Market Positioning: Our current
policy is to target the base salary and annual short-term cash
incentive structure for named executive officers at the
65th percentile of the relevant market composite, as
described below, with target long-term incentive opportunities
and benefits for named executive officers at the
50th percentile of the relevant market composite. Base
salary and short-term cash incentives are positioned at the
65th percentile in order to attract and retain high caliber
talent in the highly competitive technology market. The
50th percentile target long-term incentive strategy allows
us to be competitive in the market, while providing alignment
with stockholders and significant upside through strong
performance. As described below, the pay mix for executives
emphasizes long-term performance through a majority of pay
opportunity coming in the form of long-term award vehicles. By
using these targets, we believe that upside opportunity in the
short- and long-term incentive plans is available with
outstanding financial performance, while keeping our burn rate
and dilution, as discussed in more detail below, within a range
that we deem acceptable. The Committee may set the actual
components for an individual named executive officer above or
below the positioning benchmark based on factors such as
experience, performance achieved, specific skills or
competencies, the desired pay mix (e.g., emphasizing short- or
long-term results), and our budget.
Competitive Market Assessments: Market
competitiveness is one factor that the Committee considers each
year in determining an individual named executive officers
salary, incentive opportunity, long-term equity awards and pay
mix. The Committee relies on various data sources to evaluate
the market competitiveness of each pay element, including
publicly-disclosed data from a peer group of companies (see
discussion below) and published survey data from a broader set
of information technology companies that are similar in size to
Symantec and that the Committee and its advisors, including
Mercer, believe represent Symantecs competition in the
broader talent market. The peer groups proxy statements
provide detailed pay data for the top five positions. Survey
data provides compensation information from a broader group of
information technology companies, with positions matched based
on specific job scope and responsibilities. The Committee
considers data from these sources in developing a market
composite which it uses as a framework for making compensation
decisions for each named executive officers position.
Peer Group: Symantec is a prominent
participant in the information technology industry. This
industry is characterized by rapid rates of change, intense
competition from small and large companies, and significant
cross-over in leadership talent needs. As such, we compete for
executive talent with leading software and services companies as
well as in the broad information technology industry. Further,
because we believe that stockholders measure our performance
against a wide array of technology peers, the Committee uses a
peer group that consists of a broader group of high technology
companies in different market segments but of a comparable size
to us. The Committee uses the peer group, as well as other
relevant market data, to develop a market composite for purposes
of establishing named executive officer pay levels (as described
above). In addition, the peer group performance is used as input
for setting performance targets for our annual incentive plan.
For fiscal 2008, the Committee, based on the advice of Mercer,
included the following companies in the peer group: Adobe
Systems, Analog Devices, Apple, Cisco Systems, Computer
Associates, Electronic Arts, EMC, Freescale Semiconductor,
Harris Interactive, Juniper Networks, Lexmark, Network
Appliance, Oracle, Qualcomm, Seagate Technology, and Yahoo!
Appropriate Pay Mix: The percentage of an
executive officers compensation opportunity that is
at-risk or variable instead of fixed is based primarily on the
officers level of influence at Symantec. Executive
officers generally have a greater portion of their pay at risk
through short- and long-term incentive programs than the rest of
our employee population because of their relatively greater
responsibility and ability to influence the Companys
performance. This is achieved by having higher target short-term
incentive opportunities and higher equity grant levels relative
to base salary than employees who are not senior executives.
Form and Mix of Long-Term Equity Incentive
Compensation: We currently use two forms of
equity for long-term equity incentive compensation: stock
options and restricted stock units (RSUs). (See Equity
Incentive Awards below for more information regarding the
specific features of each form). Starting in fiscal 2007, we
44
increased the proportion of RSUs granted to senior executives
relative to options. For fiscal 2008, named executive officers
who received equity incentive compensation awards generally
received approximately 50% of the value of such compensation in
the form of RSUs and 50% in stock options. (See further
discussion below under Equity Incentive Awards.)
These percentages (and other percentage-based equity awards
value discussed below) are based on the grant date fair value of
the shares of common stock underlying the RSUs and the grant
date fair value of the options using the Black-Scholes option
pricing method. The awards made to named executive officers
other than the CEO are determined by the Committee after seeing
recommendations made by the CEO. In determining its
recommendations to the independent directors of the Board, in
the case of CEO compensation, and in making compensation
decisions with respect to other NEOs, the Committee may consider
factors such as the individuals tenure at the Company,
industry experience, current pay mix, long-term equity and cash
awards previously granted to the individual, retention
considerations, business unit performance (as applicable),
individual performance, and other factors.
COMPENSATION
COMPONENTS
Compensation for our named executive officers includes the
following components:
Base
Salary
The annual base salary for our named executive officers is our
primary form of fixed (not at-risk) compensation. The Committee
reviews named executive officers salaries annually as part
of its overall competitive market assessment and may make
adjustments based on positioning relative to market, individual
role and contribution levels, and our overall salary budget. The
Committee reviews the CEOs salary in executive session
(i.e., without any executives present), and changes are
considered in light of market pay assessments and the
Committees annual CEO performance evaluation. In setting
the base salaries for the other named executive officers, the
Committee also considers the recommendations of the CEO based
upon his annual review of their performance.
With respect to fiscal 2008, the Committee did not increase the
salaries of the named executive officers, except that upon his
promotion to Chief Operating Officer in January 2008,
Mr. Salems salary was increased by $150,000 to bring
his salary within the competitive range for such position.
Specific information regarding fiscal 2008 salary amounts is
contained in the Summary Compensation Table beginning on
page 54. Our chief executive officer requested for the
fourth consecutive year that the Committee not increase his base
salary for fiscal 2009 and the Committee decided not to increase
the base salaries of the Companys other named executive
officers for fiscal 2009.
Executive
Annual Incentive Plans
The Executive Annual Incentive Plans for our executive officers
are adopted pursuant to the Senior Executive Incentive Plan
(SEIP) approved by our stockholders in 2003. We are seeking
stockholder approval of certain material terms of the SEIP as
required under applicable tax rules so that amounts paid under
future SEIP awards may be fully deductible (see
Proposal No. 4). The Executive Annual Incentive Plans
adopted under the SEIP are annual cash incentive plans that
reward named executive officers (and other participants) for
generating strong financial results for our Company in the short
term. To support collaboration within the senior leadership, all
named executive officers earn incentive compensation based on
performance against pre-determined corporate goals described
further below. The Committee may choose to measure the named
executive officers achievement against specific business
unit or individual performance targets as well.
Executive Annual Incentive Plan Target
Opportunities: Under the Executive Annual
Incentive Plans for a given fiscal year, each named executive
officer has an award opportunity, expressed as a percentage of
base salary with threshold and target levels. The Committee uses
peer group and survey data as input in determining the target
bonus levels for our Executive Annual Incentive Plans. In
addition, the award opportunities for fiscal 2008 were
determined based on a market composite, the desired pay mix,
internal pay equity goals, and the role of the named executive
officer. For fiscal 2008, the target opportunity for the CEO was
125% of his base salary and 80% of base salary for the other
named executive officers. Each named executive officer must
achieve threshold performance for each metric established in the
named executive officers executive annual incentive plan
in order to receive payment
45
for such metric. To motivate participants to drive for superior
performance, the award opportunity is otherwise uncapped in
amount, in that overachievement of performance goals can result
in payments in excess of target, although the Executive Annual
Incentive Plan has an overall cap of $5 million that any
single named executive officer may be paid for a single fiscal
year.
Executive Annual Incentive Plan Performance Measures and
Target Setting: Executive Annual Incentive
Plan performance targets are established on or about the
beginning of each plan year. Our management develops proposed
goals with reference to a variety of factors, including our
historical performance, internal budgets, market and peer
performance, and external expectations for our performance. The
Committee reviews, adjusts as necessary, and approves the goals,
the range of performance, and the weighting of the goals.
Following the end of each fiscal year, the Committee reviews our
actual performance against the performance measures established
in the fiscal years Executive Annual Incentive Plans
(after making any appropriate adjustments to such measures to
account for corporate events such as acquisitions or other
actions that may affect the achievement of such measures),
determines the extent of achievement and approves annual cash
incentives, if warranted. The determination of named executive
officer incentives is formulaic, though the Committee has the
discretion to reduce awards. It did not exercise such discretion
for fiscal 2008.
The performance measures in the Fiscal Year 2008 Executive
Annual Incentive Plans for the named executive officers were
non-GAAP earnings per share (EPS) and revenue achievement which,
for our CEO, CFO and COO, were weighted equally. For our Group
Presidents who are responsible for a business unit, in addition
to revenue and EPS metrics, the FY08 Executive Annual Incentive
Plans also included business unit contribution margin as a
performance metric. For this group, the business unit
contribution performance metric had a 30% weighting, with the
revenue and EPS metrics equally weighted at 35%. The incentive
plans for Messrs. Kendra and Butterfield and
Ms. Chaffin included the business contribution weighting as
set forth above. Mr. Hughes became our Chief Strategy
Officer in January 2008 after serving as Group President, Global
Services for the first three quarters of fiscal 2008. As a
result, the incentive plan for Mr. Hughes included the
business unit contribution performance metric for the Services
segment for the first three quarters of the year and did not
include such metric for the fourth quarter. In addition,
Mr. Butterfield became our Interim Group President, Data
Center Management Group in November 2007, in addition to his
role as our Group President, Altiris segment; however,
Mr. Butterfields bonus opportunity under the
incentive plan was not adjusted to take into account these
additional responsibilities.
We used the above performance metrics because:
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Over time, EPS and revenue measures have strongly correlated
with stockholder value creation for Symantec;
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Improvement in EPS and revenue measures aligns with our overall
growth strategy;
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The EPS and revenue measures are transparent to investors;
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The EPS and revenue measures balance growth and profitability;
and
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The business unit performance metrics drive behavior in a manner
that aligns enterprise and business unit results.
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For each performance metric, the Committee established a
threshold and target performance level that represents 50% and
100% of target funding levels, respectively. If results for a
goal are below threshold, the funding level for that goal is 0%,
and participants will be paid no incentive for that goal. At
target, the goal is funded 100%. Above target, the payout for
revenue achievement increases by 10% of the target opportunity
for each additional 1% above target revenue achievement levels.
Results above target EPS provided an additional 10% payout for
each approximate increment of $0.023 in EPS for fiscal 2008.
Fiscal
Year 2008 Results
For fiscal 2008, our non-GAAP revenue target was
$5.896 billion and our non-GAAP EPS target was $1.20
per share. The Company performed at 100.7% of the revenue goal
($5.937 billion), resulting in a payout for that portion of
the plan at 100% of the plan target amount, and performed at
106.2% of the EPS goal ($1.27 per share), resulting in a payout
for that portion of the plan at 130% of the plan target amount.
These levels of achievement compare to our
46
reported increases in non-GAAP revenue and non-GAAP EPS of
approximately 13% and 26%, respectively, from fiscal 2007 to
fiscal 2008. As business cycles shifted during fiscal 2008,
business unit performance experienced more volatility in
contribution margin results compared to targeted levels. The
Company does not intend to disclose the specific targets for the
business unit contribution margin, as its segment-level business
plan is highly confidential. Disclosing specific business
unit-level objectives would provide competitors and third
parties with insights into the Companys internal planning
processes which might allow our competitors to predict certain
business strategies and cause us competitive harm. The amounts
paid out with respect to the business unit metrics, as a
percentage of the target payout amounts, were as follows:
Consumer Products segment, 45%; Data Center Management segment,
200%; Security and Compliance segment, 80%; Altiris segment,
95%; and Services segment, 200%. The Committee believed when it
established these business unit performance metrics under the
fiscal 2008 Annual Incentive Plans that while actual results
were uncertain it was reasonably likely that the Company would
achieve at or close to the target goals.
For our CEO, CFO and COO, the metric achievements for FY08
described above resulted in a payout of 115% of the
officers respective target bonus amount; and for
Mr. Hughes, Ms. Chaffin, Mr. Butterfield and
Mr. Kendra, this achievement resulted in a 134%, 94%, 95%
and 105% payout against target bonus amount, respectively (in
each case, amounts paid are reflected in the Summary
Compensation Table beginning on page 54).
Long Term
Incentive Plans (LTIP)
In May 2007, the Committee approved our FY08 LTIP, which became
effective on April 1, 2007. Under the terms of the FY08
LTIP, executives are eligible to receive performance-based
compensation based upon the level of attainment of target
operating cash flow through the Companys fiscal year
ending March 31, 2008. The FY08 LTIP was adopted pursuant
to the SEIP approved by our stockholders in 2003. We are seeking
stockholder approval of certain material terms of the SEIP as
required under applicable tax rules so that amounts paid under
future SEIP awards may be fully deductible (see
Proposal No. 4).
As we currently operate the SEIP, the long-term incentive metric
is measured at the end of the performance period (i.e., the end
of fiscal 2008) and, subject to satisfaction of continuing
service requirements, will be paid following the last day of the
second fiscal year following the end of the performance period
(i.e., the end of fiscal 2010). By basing the LTIP payout on
operating cash flow, the plan focuses on a specific, measurable
corporate goal that is aligned with generating stockholder
value, and provides performance-based compensation based upon
the actual achievement of the goal. We believe that the
exclusive metric of operating cash flow, as opposed to revenue
or EPS, will appropriately focus our executives on tangible cost
reduction opportunities that are not subject to some of the
timing issues associated with the accounting rules relating to
revenues and net income, which can lead to fluctuations in
results that are not necessarily directly tied to our business
success. Our CEO declined participation in the FY08 LTIP. For
our continuing named executive officers who participated in the
FY08 LTIP, the target LTIP awards represented the following
percentages of then-current base salary: Messrs. Salem and
Hughes, 95%; Mr. Beer, 68%; and Ms. Chaffin, 100%. A
participant is eligible for 25% of the target LTIP award if at
least 85% of budgeted operating cash flow is attained with
respect to the performance period and for up to 200% of the
target LTIP award if at least 120% of budgeted operating cash
flow is attained with respect to the performance period. A
participant must be an employee of the Company on the payment
date to receive the payment. Subject to certain exceptions, a
participant who terminates his or her employment with the
Company before the payment date will not be eligible to receive
the payment or any prorated portion thereof. The Committee
implemented the FY08 LTIP in order to provide an ongoing
retention and performance incentive by balancing option and RSU
vesting periods (four and two years respectively) with another
component which will enhance retention of senior managers.
For FY08, our operating cash flow target was $1.789 billion
and we achieved 102.4% of our target ($1.832 billion),
resulting in payouts of 105% of target bonus amounts for our
continuing named executive officers who remain our employees as
of the end of fiscal 2010. Accordingly, Messrs. Salem, Beer
and Hughes and Ms. Chaffin will each receive a payout of
$472,500 if they remain employed by us on such date. This level
of achievement against target compares to our reported increase
in cash flow from operations of approximately 9% from fiscal
2007 to fiscal 2008. Messrs. Kendra and Butterfield will
not receive any payouts under the FY08 LTIP because they will
not be employees of Symantec on the payout date.
47
Equity
Incentive Awards
The primary purpose of our equity incentive awards is to align
the interests of the named executive officers with those of the
stockholders by rewarding the named executive officers for
creating stockholder value over the long-term. By compensating
our executives with the Companys equity, our executives
hold a stake in the Companys financial future. The gains
realized in the long term depend on our executives ability
to drive the financial performance of the Company. Equity
incentive awards are also a useful vehicle for attracting and
retaining executive talent in our competitive talent market.
Our 2004 Equity Incentive Plan provides for the award of stock
options, stock appreciation rights, restricted stock, and
restricted stock units. We granted named executive officers
stock options and restricted stock units (RSUs) in fiscal 2008
(as described in more detail below). The Company offers all
employees the opportunity to participate in an Employee Stock
Purchase Plan which allows for purchase of stock at a discount
to market through a payroll deduction process. This plan is
designed to comply with Internal Revenue Code Section 423.
During fiscal 2008, three named executive officers participated
in our Employee Stock Purchase Plan.
We are currently seeking approval of our stockholders of an
amendment and restatement of our 2004 Equity Incentive Plan (see
Proposal No. 2 above) and adoption of a new Employee
Stock Purchase Plan designed to qualify under Code
Section 423 (see Proposal No. 3 above). We
believe it is important to continue both of these equity
compensation programs, as more fully discussed in the respective
Proposals in this Proxy Statement.
We seek to provide equity incentive awards which are competitive
with companies in our peer group and the other information
technology companies that the Committee includes in its market
composite. As such, we establish target equity incentive award
grant guideline levels for the named executive officers based on
market pay assessments. When making annual equity awards to
named executive officers, we consider corporate results during
the past year, the role, responsibility and performance of the
individual named executive officer, the competitive market
assessment described above, prior equity awards, and the level
of vested and unvested equity awards then held by each
participating officer. In making equity awards, we also
generally take into consideration gains recognizable by the
executive from equity awards made in prior years. Mercer
provides the Committee with market data on these matters, as
well as providing to the Committee summaries of the prior grants
made to the individual named executive officers.
For fiscal 2008, approximately 50% of the named executive
officers equity incentive award value was granted in the
form of RSUs and approximately 50% in the form of stock options
(except for the grants in fiscal 2008 to Mr. Salem, as
noted below in Equity Grant Practices, which were
somewhat more heavily weighted towards stock options).
On April 25, 2006, the Committee approved an equity grant
for the CEO of options to acquire 400,000 shares of common
stock and 100,000 RSUs. On May 1, 2007, the Committee
approved an equity grant for the CEO of options to acquire
225,000 shares of common stock and 65,000 RSUs.
Mr. Thompson declined each of these equity grants in full
and indicated to the Committee that he believed previous stock
option grants made to him by the Committee were sufficient to
achieve the Committees objectives of retaining him,
aligning his financial interests with those of stockholders, and
focusing him on improving the Companys overall financial
results. On April 29, 2008, the Committee approved, and
Mr. Thompson accepted, an equity grant of options to
purchase 380,000 shares and 115,000 RSUs.
Burn Rate and Dilution: We closely
manage how we use our equity to compensate employees. We think
of gross burn rate as the total number of shares
granted under all of our equity incentive plans during a period
divided by the average number of shares of common stock
outstanding during that period and expressed as a percentage. We
think of net burn rate as the total number of shares
granted under all of our equity incentive plans during a period,
minus the total number of shares returned to such plans through
awards cancelled during that period, divided by the average
number of shares of common stock outstanding during that period,
and expressed as a percentage. Overhang we think of
as the total number of shares underlying options and awards
outstanding plus shares available for issuance under all of our
equity incentive plans at the end of a period divided by the
average number of shares of common stock outstanding during that
period and expressed as a percentage. For purposes of these
calculations, each full-value award grant (i.e., RSU) is treated
as the equivalent of the grant of two options in order
48
to recognize the economic difference in the equity vehicle
types. Our annual gross and net burn rates have been under 3%
since fiscal 2005. The Committee targets an annual gross burn
rate of approximately 3% to allow for effective attraction,
retention and motivation of senior management and the broader
employee base, while staying within parameters acceptable to
stockholders. The Committee determines the percentage of equity
to be made available for our equity programs with reference to
the companies in our market composite. In addition, the
Committee considers the accounting costs that will be reflected
in our financial statements when establishing the forms of
equity to be granted and the size of the overall pool available.
For fiscal 2008, our gross burn rate was 2.52%, our net burn
rate was 1.93%, and our overhang was 16.3%.
Stock Options: Options provide an
incentive for executives to drive long-term share price
appreciation through the development and execution of effective
long-term strategies. Stock option value is only realized if the
trading price of our common stock increases, and option holder
interests are therefore aligned with stockholder interests.
Stock options are issued with exercise prices at 100% of the
grant-date fair market value to assure that executives will
receive a benefit only when the trading price increases. Option
awards generally have value for the executive only if the
executive remains employed for the period required for the
shares to vest. Options granted in fiscal 2008 vest 25% after
the first year and on a monthly basis thereafter for the next
36 months, and, if not exercised, expire in a maximum of
seven years (or earlier in the case of termination of
employment). Vesting options over four years provides retention
value, and is in line with market practices among companies in
our market composite and other option recipients within the
Company. (Details of stock options granted to the named
executive officers in fiscal 2008 are disclosed in the Grants of
Plan-Based Awards table included on page 56.)
Restricted Stock Units (RSUs): RSUs
represent the right to receive one share of Symantec common
stock for each RSU upon the settlement date, which is the date
on which certain conditions, such as continued employment with
us for a pre-determined length of time, are satisfied. Starting
in fiscal 2007, we elected to substitute a significant
percentage of the named executive officers equity
incentive award value, which had historically been provided with
only stock options, with RSUs. This change was made to enhance
the retention of named executive officers and balance the more
volatile rewards associated with stock options. The Committee
believes that RSUs align the interests of the named executive
officers with the interests of the stockholders because the
value of these awards appreciate if the trading price of our
common stock appreciates, and also have retention value even
during periods in which our trading price does not appreciate,
which supports continuity in the senior management team.
Shares of our stock are issued to RSU holders as the awards
vest. The vesting schedule for RSUs granted to our named
executive officers in fiscal 2008 (other than the promotional
grant of 30,000 RSUs to Mr. Salem in February 2008, which
include a four-year vesting schedule) provided that 50% of the
awards vests after the first year and 50% after the second year.
The vesting schedule for the RSUs was intended to complement the
four-year vesting period that applies to stock options and the
three-year performance cycle for the LTIP awards described
below. The combination of these three components provides an
ongoing retention and performance incentive for our senior
management. (Details of RSUs granted to the named executive
officers in fiscal 2008 are disclosed in the Grants of
Plan-Based Awards table on page 56.)
Equity Grant Practices: The Committee
generally approves grants to the named executive officers at its
first meeting of each fiscal year. The grant date for all stock
options granted to employees, including the named executive
officers, is the 10th day of the month following the
meeting (or the business day closest to such day if such day is
not a business day). The exercise price for stock options is the
closing price of our common stock, as reported on the Nasdaq
Global Select Market, on the date of grant. The Committee does
not coordinate the timing of equity awards with the release of
material nonpublic information. The Committee may approve grants
to named executive officers at other times during the year, in
which case, the grant date is the 10th day of the month
following the date on which the Committee approves the grant and
the exercise price of any options so granted is the closing
price on the grant date. RSUs may be granted from time to time
throughout the year, but all RSUs generally vest on either June
1 or December 1 for administrative reasons. In connection with
his promotion to our Chief Operating Officer in January 2008,
the Committee at a regular meeting granted Mr. Salem in
February 2008 30,000 RSUs which vest in four equal annual
installments concluding in March 2012 and 100,000 stock options
with a standard four-year vesting schedule.
49
Change of Control and Severance
Arrangements: The vesting of certain stock
options and RSUs held by our named executive officers will
accelerate if they experience an involuntary (including
constructive) termination of employment under certain
circumstances, as described further under Potential
Payments Upon Termination or Change in Control, beginning
on page 60.
Retention
and Other Awards
Certain business conditions may warrant using additional
compensation approaches to attract, retain or motivate
executives. Such conditions include acquisitions and
divestitures, attracting or retaining specific or unique talent,
and recognition for exceptional contributions. In these
situations, the Committee considers the business needs and the
potential costs and benefits of special rewards. For example,
the Committee approved promotional grants of options and RSUs to
Mr. Salem upon his January 2008 promotion to Chief
Operating Officer, and approved a sign-on bonus for
Mr. Beer pursuant to his offer letter with Symantec in
February 2006.
Other
Benefits
All named executive officers are eligible to participate in our
401(k) plan (which includes our matching contributions), health
and dental coverage, life insurance, disability insurance, paid
time off, and paid holidays on the same terms as are available
to all employees generally. These rewards are designed to be
competitive with overall market practices, and are in place to
attract and retain the talent needed in the business. In
addition, selected officers may be eligible to participate in
the deferred compensation plan, and to receive other benefits
described below.
Deferred Compensation: Symantecs
named executive officers are eligible to participate in a
nonqualified deferral plan. The deferral plan provides the
opportunity to defer up to 75% of base salary and 100% of cash
bonuses for payment at a future date. This plan is provided to
be competitive in the executive talent market, and to provide
executives with a tax-efficient alternative for receiving
earnings. None of the named executive officers currently
participate in this plan.
Additional Benefits: Other benefits
available to named executive officers are Company-paid life
insurance, reimbursement for up to $10,000 for financial
planning services and an allowance for personal travel for the
CEO on Company aircraft. The Committee believes that these
perquisites allow the named executive officers to focus more of
their time and attention on their employment, which benefits the
Company, and that they are provided in the marketplace for
executive talent. The value of the perquisites we provide are
taxable to the named executive officers and the incremental cost
to us for providing these perquisites is reflected in the
Summary Compensation Table. (These benefits are disclosed in the
All Other Compensation column of the Summary Compensation Table
on page 54).
Change in Control Agreements: Our
Executive Retention Plan provides participants with accelerated
vesting of equity awards in the event the individuals
employment is terminated without cause, or is constructively
terminated, within 12 months of a change in control of the
Company (as defined in the plan). The intent of the plan is to
enable named executive officers to have a balanced perspective
in making overall business decisions in the context of a
potential acquisition of the Company, as well as to be
competitive with market practices. The Committee believes that
change in control benefits, if structured appropriately, serve
to minimize the distraction caused by a potential transaction
and reduce the risk that key talent would leave the Company
before a transaction closes. We do not provide for
gross-ups of
excise tax values under Section 4999 of the Internal
Revenue Code. Rather, we allow the named executive officer to
reduce the benefit received or defer the accelerated vesting of
options to avoid excess payment penalties. Details of each
individual named executive officers benefits, including
estimates of amounts payable in specified circumstances, are
disclosed under Potential Payments Upon Termination or
Change in Control beginning on page 60 below.
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SUPPLEMENTARY
POLICIES AND CONSIDERATIONS
We use several additional policies to ensure that the overall
compensation structure is responsive to stockholder interests
and competitive with the market. Specific policies include:
Stock
Ownership Requirements
To ensure that our executive management teams interests
are aligned with our stockholders, we instituted stock ownership
requirements in October 2005. Minimum ownership levels are based
on the executives salary grade:
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CEO: 150,000 shares
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CFO/COO: 85,000 shares
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Group Presidents and Executive Vice Presidents:
35,000 shares
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Each person holding one of the positions listed above is
required to acquire and thereafter maintain the stock ownership
required within four years of becoming an executive of the
Company (or four years following the adoption date of these
guidelines).
Stock options and unvested restricted stock or restricted stock
units do not count toward stock ownership requirements. Until an
executive meets the applicable stock ownership requirement, the
executive is encouraged to retain a percentage of any shares
received as a result of the exercise of any stock option or
other equity award, net of the applicable exercise price and tax
withholdings.
As of July 4, 2008, John W. Thompson, Enrique T. Salem,
Gregory W. Hughes and Janice Chaffin had reached the stated
ownership requirements. James A. Beer has yet to reach the
required ownership level, but is within the four-year window
since his commencement of employment in February 2006. See the
table below for individual ownership levels relative to the
executives ownership requirement.
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Ownership
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Additional Shares
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Requirement
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Holdings as of
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Required as of
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Named Executive Officer
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(# of shares)
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July 4, 2008
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July 4, 2008
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John W. Thompson
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150,000
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1,328,479
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Enrique T. Salem
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85,000
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152,215
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James A. Beer
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85,000
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31,186
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53,814
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Gregory W. Hughes
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35,000
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73,573
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Janice Chaffin
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35,000
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77,973
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Certain
Other Securities Matters
Our Insider Trading Policy provides that no director or
executive officer may maintain a margin arrangement involving
Symantecs securities while in possession of material
non-public information about Symantec, engage in any short sale
transaction involving Symantecs securities or purchase or
write any put or call option involving Symantecs
securities.
In addition, our Insider Trading Policy requires that our Chief
Executive Officer, Chief Financial Officer, and each of our
directors conduct open market transactions in our securities
only through use of stock trading plans adopted pursuant to
Rule 10b5-1
of the Securities Exchange Act of 1934.
Rule 10b5-1
allows insiders to sell and diversify their holdings in our
stock over a designated period by adopting pre-arranged stock
trading plans at a time when they are not aware of material
nonpublic information about us, and thereafter sell shares of
our common stock in accordance with the terms of their stock
trading plans without regard to whether or not they are in
possession of material nonpublic information about the Company
at the time of the sale. All other executives are strongly
encouraged to trade using 10b5-1 plans.
Tax and
Accounting Considerations on Compensation
The financial reporting and income tax consequences to the
Company of individual compensation elements are important
considerations for the Committee when it reviews compensation
practices and makes compensation decisions.
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While structuring compensation programs that result in more
favorable tax and financial reporting treatment is a general
principle, the Committee balances these goals with other
business needs that may be inconsistent with obtaining the most
favorable tax and accounting treatment for each component of its
compensation.
Deductibility by Symantec. Under
Section 162(m) of the Internal Revenue Code, we may not
receive a federal income tax deduction for compensation that is
not performance-based (as defined in the Section 162(m)
rules) paid to the Chief Executive Officer and the next three
most highly compensated executive officers to the extent that
any of these persons receives more than $1,000,000 in
nonperformance-based compensation in any one year. While the
Committee considers the Companys ability to deduct
compensation amounts paid or to be paid to its executive
officers in determining appropriate levels or manner of
compensation, it may from time to time approve additional
amounts of compensation that are not fully deductible under
Section 162(m).
Salaries for officers do not qualify as performance-based
compensation; however, as no officer received salary in excess
of $1,000,000 during fiscal 2008, the entire amount of salaries
paid to our named executive officers is deductible. We believe
that all of the stock options granted to the executive officers
under our 1996 Equity Incentive Plan and 2004 Equity Incentive
Plan qualify under Section 162(m) as performance-based
compensation and that all amounts of compensation related to
options held by our executive officers should be fully
deductible. Our RSU grants vest on a time-based vesting schedule
and therefore are not considered performance-based under the
Section 162(m) rules. Accordingly, amounts of compensation
related to RSUs held by our executive officers may not be fully
deductible (depending upon the value of our stock, and the
amount of other nonperformance-based compensation an officer has
during the year in which any portion of an RSU vests).
Tax Implications for
Officers. Section 409A of the Internal
Revenue Code imposes additional income taxes on executive
officers for certain types of deferred compensation that do not
comply with Section 409A. The Company attempts in good
faith to structure compensation so that it either conforms with
the requirements of or qualifies for an exception under Code
Section 409A. Section 280G of the Internal Revenue
Code imposes an excise tax on payments to executives of
severance or change of control compensation that exceed the
levels specified in the Section 280G rules. Our named
executive officers could receive the amounts shown in the
section entitled Potential Payments Upon Termination or
Change in Control (beginning on page 60 below) as
severance or change of control payments that could implicate
this excise tax. As mentioned above, we do not offer our
officers as part of their change of control benefits any gross
ups related to this excise tax under Code Section 4999.
Accounting Considerations. The
Compensation Committee also considers the accounting and cash
flow implications of various forms of executive compensation. In
its financial statements, the Company records salaries and
performance-based compensation incentives as expenses in the
amount paid, or to be paid, to the named executive officers.
Accounting rules also require the Company to record an expense
in its financial statements for equity awards, even though
equity awards are not paid as cash to employees. The accounting
expense of equity awards to employees is calculated in
accordance with SFAS 123R. The Compensation Committee
believes, however, that the many advantages of equity
compensation, as discussed above, more than compensate for the
non-cash accounting expense associated with them.
Compensation
Committee Interlocks and Insider Participation
The members of Symantecs Compensation Committee during
fiscal year 2008 were Messrs. Schulman, Brown, Coleman and
Mahoney and Ms. Laybourne (who was appointed to the
Committee in January 2008 following her appointment to our
Board). None of the members of Symantecs Compensation
Committee in fiscal year 2008 was at any time during fiscal year
2008 or at any other time an officer or employee of Symantec or
any of its subsidiaries, and none had or have any relationships
with Symantec that are required to be disclosed under
Item 404 of
Regulation S-K.
None of Symantecs executive officers has served as a
member of the Board, or as a member of the compensation or
similar committee, of any entity that has one or more executive
officers who served on our Board or Compensation Committee
during fiscal year 2008.
Compensation
Committee Report
The information contained in the following report of
Symantecs Compensation Committee is not considered to be
soliciting material, filed or
incorporated by reference in any past or future filing by
Symantec under the
52
Securities Exchange Act of 1934 or the Securities Act of 1933
unless and only to the extent that Symantec specifically
incorporates it by reference.
The Compensation Committee has reviewed and discussed with
management the Compensation Discussion and Analysis
(CD&A) contained in this proxy statement. Based
on this review and discussion, the Compensation Committee has
recommended to the Board that the CD&A be included in this
proxy statement and incorporated into our Annual Report on
Form 10-K
for the fiscal year ended March 28, 2008.
By: The Compensation Committee of the Board of Directors:
Michael A. Brown
William T. Coleman
Geraldine B. Laybourne
David L. Mahoney
Daniel H. Schulman (Chair)
53
Summary
of Compensation
The following table shows for the fiscal year ended
March 28, 2008, compensation awarded to or paid to, or
earned by, our Chief Executive Officer, our Chief Financial
Officer and the three most highly compensated executive officers
who were serving as executive officers (other than as our Chief
Executive Officer or Chief Financial Officer) at March 28,
2008 and two additional individuals for whom disclosure would
have been required had they continued serving as an executive
officer through March 28, 2008 (the Named Executive
Officers).
Summary
Compensation Table for Fiscal 2008
|
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|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
Incentive Plan
|
|
|
All Other
|
|
|
|
|
|
|
Fiscal
|
|
|
Salary
|
|
|
Bonus
|
|
|
Awards
|
|
|
Awards
|
|
|
Compensation
|
|
|
Compensation
|
|
|
Total
|
|
Name and Principal Position
|
|
Year
|
|
|
($)
|
|
|
($)
|
|
|
($)(1)
|
|
|
($)(2)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
John W. Thompson
|
|
|
2008
|
|
|
|
800,000
|
|
|
|
|
|
|
|
|
|
|
|
3,415,203
|
(3)
|
|
|
1,150,000
|
(4)
|
|
|
273,641
|
(5)
|
|
|
5,638,844
|
|
Chairman of the Board of Directors and Chief Executive Officer
|
|
|
2007
|
|
|
|
800,000
|
|
|
|
|
|
|
|
|
|
|
|
3,523,104
|
(3)
|
|
|
350,000
|
(4)
|
|
|
108,611
|
(6)
|
|
|
4,781,715
|
|
James A. Beer
|
|
|
2008
|
|
|
|
660,000
|
|
|
|
|
|
|
|
840,845
|
|
|
|
639,896
|
|
|
|
1,079,700
|
(7)
|
|
|
17,022
|
(8)
|
|
|
3,237,463
|
|
Executive Vice President, Chief Financial Officer
|
|
|
2007
|
|
|
|
650,000
|
|
|
|
760,000
|
(9)
|
|
|
423,047
|
|
|
|
449,840
|
|
|
|
|
|
|
|
48,326
|
(10)
|
|
|
2,331,213
|
|
Gregory W. Hughes
|
|
|
2008
|
|
|
|
475,860
|
|
|
|
|
|
|
|
1,397,513
|
|
|
|
1,103,271
|
|
|
|
983,098
|
(11)
|
|
|
43,434
|
(12)
|
|
|
4,003,178
|
|
Chief Strategy Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enrique T. Salem
|
|
|
2008
|
|
|
|
509,659
|
|
|
|
|
|
|
|
1,303,963
|
|
|
|
919,970
|
|
|
|
941,386
|
(13)
|
|
|
21,482
|
(14)
|
|
|
3,696,460
|
|
Chief Operating Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Janice Chaffin
|
|
|
2008
|
|
|
|
450,000
|
|
|
|
|
|
|
|
1,286,219
|
|
|
|
805,339
|
|
|
|
810,900
|
(15)
|
|
|
40,778
|
(16)
|
|
|
3,393,236
|
|
Group President, Consumer Business Unit
|
|
|
2007
|
|
|
|
420,000
|
|
|
|
63,000
|
(17)
|
|
|
858,878
|
|
|
|
1,281,015
|
|
|
|
268,200
|
(18)
|
|
|
31,940
|
(19)
|
|
|
2,923,033
|
|
Thomas W. Kendra
|
|
|
2008
|
|
|
|
460,000
|
|
|
|
|
|
|
|
1,286,219
|
|
|
|
1,449,152
|
|
|
|
384,560
|
(4)
|
|
|
11,336
|
(20)
|
|
|
3,591,267
|
|
Former Group President, Security and Compliance Segment
|
|
|
2007
|
|
|
|
450,500
|
|
|
|
1,356,124
|
(21)
|
|
|
858,878
|
|
|
|
1,392,019
|
|
|
|
126,140
|
(4)
|
|
|
21,434
|
(22)
|
|
|
4,205,095
|
|
Gregory S. Butterfield
|
|
|
2008
|
|
|
|
480,066
|
|
|
|
882,688
|
(23)
|
|
|
989,726
|
|
|
|
728,040
|
|
|
|
401,865
|
(24)
|
|
|
6,318
|
(25)
|
|
|
3,488,703
|
|
Former Group President, Altiris Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Amounts shown in this column reflect our accounting expense for
these awards and do not reflect whether the recipient has
actually realized a financial benefit from the awards (such as
by vesting in a restricted stock unit award). This column
represents the dollar amount recognized for financial statement
reporting purposes with respect to the applicable fiscal year
for the fair value of restricted stock units and restricted
stock awards held by the NEOs in accordance with SFAS 123R.
Pursuant to SEC rules, the amounts shown exclude the impact of
estimated forfeitures related to service-based vesting
conditions. No stock awards were forfeited by any of the NEOs
during fiscal 2007 or 2008. For additional information on the
valuation assumptions with respect to grants made in fiscal
2008, refer to Note 15 of the financial statements in our
Form 10-K
for the year ended March 28, 2008, as filed with the SEC.
For information on the valuation assumptions with respect to
grants made prior to fiscal 2008, refer to Note 11 of the
financial statements in our
Form 10-K
for the respective year. |
|
(2) |
|
Amounts shown in this column reflect our accounting expense for
these awards and do not reflect whether the recipient has
actually realized a financial benefit from the awards (such as
by exercising stock options). This column represents the dollar
amount recognized for financial statement reporting purposes
with respect to the applicable fiscal year for the fair value of
stock options granted to the NEOs. The fair value was estimated
using the Black-Scholes option pricing model in accordance with
FAS 123R. Pursuant to SEC rules, the amounts shown exclude
the impact of estimated forfeitures related to service-based
vesting conditions. For additional information on the valuation
assumptions with respect to grants made in fiscal 2008, refer to
Note 15 of the financial statements in our
Form 10-K
for the year ended March 28, 2008, as filed with the SEC.
For information on the valuation assumptions with respect to
grants made prior to fiscal 2008, refer to Note 11 on the
financial statements in our
Form 10-K
for the respective year. |
|
(3) |
|
This amount represents stock option awards granted to
Mr. Thompson prior to fiscal 2007; Mr. Thompson
declined his long term equity incentive grants in fiscal 2007
and 2008. |
|
(4) |
|
This amount represents the NEOs executive annual bonus
under the NEOs Executive Annual Incentive Plan for the
applicable fiscal year, which was earned in such fiscal year and
paid in the following fiscal year. |
54
|
|
|
(5) |
|
This amount includes (a) $22,906 for coverage of expenses
related to Mr. Thompsons attendance at the
Companys sales achievers trip and Board retreat,
(b) $14,386 for term executive life insurance and
individual long term disability insurance premium payments made
by the Company, (c) $6,000 for the Companys
contributions to Mr. Thompsons account under its
401(k) plan and (d) $184,689 for incremental costs incurred
by the Company in connection with personal use of the company
aircraft. Incremental costs include variable costs directly
related to the personal use of the company aircraft, such as
fuel, hourly usage rates and federal excise taxes. |
|
(6) |
|
This amount includes (a) term executive life insurance and
individual long term disability insurance premium payments made
by the Company, and (b) $88,225 for incremental costs
incurred by the Company in connection with
Mr. Thompsons personal use of the company aircraft.
Incremental costs include variable costs directly related to the
personal use of the company aircraft, such as fuel, hourly usage
rates and federal excise taxes. |
|
(7) |
|
This amount includes (a) $607,200 for Mr. Beers
executive annual bonus under his Executive Annual Incentive Plan
for fiscal 2008, which was earned in fiscal 2008 and paid in
fiscal 2009, and (b) $472,500 accrued on
Mr. Beers behalf for performance during fiscal 2008
under the FY08 LTIP. Mr. Beer will be eligible to receive
the FY08 LTIP award if he remains employed by the Company
through the payment date, which is the last day of fiscal 2010. |
|
(8) |
|
This amount includes coverage of expenses related to attendance
at the Board retreat, reimbursement for tax services and the
Companys contributions to Mr. Beers account
under its 401(k) plan. |
|
(9) |
|
Pursuant to his offer letter, Mr. Beer was paid the
following bonuses in the 2007 fiscal year: (a) $260,000,
representing 50% of his annual bonus as calculated under his
FY07 Executive Annual Incentive Plan, and (b) $500,000,
upon the six month anniversary of his employment commencement
date. |
|
(10) |
|
This amount includes $46,295 in relocation expenses. Relocation
expenses include reimbursements made to Mr. Beer for his
out-of-pocket expenses, amounts that were paid directly to third
party vendors and tax gross up for such expenses. |
|
(11) |
|
This amount represents (a) $510,598 for
Mr. Hughes executive annual bonus under his Executive
Annual Incentive Plan for fiscal 2008, which was earned in
fiscal 2008 and paid in fiscal 2009, and (b) $472,500
accrued on Mr. Hughes behalf for performance during
fiscal 2008 under the FY08 LTIP. Mr. Hughes will be
eligible to receive the FY08 LTIP award if he remains employed
by the Company through the payment date, which is the last day
of fiscal 2010. |
|
(12) |
|
This amount represents $37,826 for coverage of expenses related
to attendance at the Companys sales achievers trip
and Board retreat, the Companys contributions to
Mr. Hughes account under its 401(k) plan and
reimbursement for tax services. |
|
(13) |
|
This amount represents (a) $468,886 for
Mr. Salems executive annual bonus under his Executive
Annual Incentive Plan for fiscal 2008, which was earned in
fiscal 2008 and paid in fiscal 2009, and (b) $472,500
accrued on Mr. Salems behalf for performance during
fiscal 2008 under the FY08 LTIP. Mr. Salem will be eligible
to receive the FY08 LTIP award if he remains employed by the
Company through the payment date, which is the last day of
fiscal 2010. |
|
(14) |
|
This amount includes coverage of expenses related to
Mr. Salems attendance at the Companys sales
achievers trip and Board retreat. |
|
(15) |
|
This amount represents (a) $338,400 for
Ms. Chaffins executive annual bonus under her
Executive Annual Incentive Plan for fiscal 2008, which was
earned in fiscal 2008 and paid in fiscal 2009, and
(b) $472,500 accrued on Ms. Chaffins behalf for
performance during fiscal 2008 under the FY08 LTIP.
Ms. Chaffin will be eligible to receive the FY08 LTIP award
if she remains employed by the Company through the payment date,
which is the last day of fiscal 2010. |
|
(16) |
|
This amount includes $26,158 for coverage of expenses related to
attendance at the Companys sales achievers trip and
Board retreat, the Companys contributions to
Ms. Chaffins account under its 401(k) plan and
reimbursement for tax services. |
55
|
|
|
(17) |
|
This amount represents the portion of Ms. Chaffins
FY06 Executive Supplemental Incentive Plan bonus resulting from
a 35% multiplier applied to her base bonus of $180,000 (included
in the amount reported for her under Non-Equity Incentive
Plan Compensation). |
|
(18) |
|
This amount includes (a) $88,200 for
Ms. Chaffins executive annual bonus under her
Executive Annual Incentive Plan for fiscal 2007, which was
earned in fiscal 2007 and paid in fiscal 2008, and
(b) $180,000 paid to Ms. Chaffin upon the one year
anniversary of the Veritas acquisition pursuant to her FY06
Executive Supplemental Incentive Plan. |
|
(19) |
|
This amount represents coverage of expenses related to
Ms. Chaffins attendance at the Companys sales
achievers trip. |
|
(20) |
|
This amount includes coverage of expenses related to attendance
at the Companys sales achievers trip and Board
retreat, golf membership, the Companys contributions to
Mr. Kendras account under its 401(k) plan and
reimbursement for tax services. |
|
(21) |
|
This amount includes (a) two payments of $303,062 made to
Mr. Kendra in July 2006 and January 2007 as the last two
installments of the $1,818,370 payable to him pursuant to his
offer letter; and (b) $750,000 paid to Mr. Kendra upon
the one year anniversary of the Veritas acquisition pursuant to
his FY06 Executive Supplemental Incentive Plan. |
|
(22) |
|
This amount includes coverage of expenses related to
Mr. Kendras attendance at the Companys sales
achievers trip and Board retreat, golf club membership and
reimbursement for tax services. |
|
(23) |
|
This amount represents $588,688 paid to Mr. Butterfield
upon the closing of Symantecs acquisition of Altiris, Inc.
(the Altiris Closing), and (b) $294,000 paid to
Mr. Butterfield upon the six month anniversary of the
Altiris Closing. |
|
(24) |
|
This amount represents (a) $384,225 for
Mr. Butterfields executive annual bonus under his
Executive Annual Incentive Plan for fiscal 2008, which was
earned in fiscal 2008 and paid in fiscal 2009, and
(b) $17,640 for Mr. Butterfields executive bonus
under his Altiris, Inc. 2007 Executive Annual Bonus Plan. |
|
(25) |
|
This amount includes coverage of expenses related to attendance
at the Companys sales achievers trip and Board
retreat and the Companys contributions to
Mr. Butterfields account under its 401(k) plan. |
The following table shows for the fiscal year ended
March 28, 2008, certain information regarding grants of
plan-based awards to the Named Executive Officers from our
incentive plans:
Grants of
Plan-Based Awards in Fiscal 2008
|
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|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Awards:
|
|
|
|
|
|
Grant Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
Exercise or
|
|
|
Fair Value
|
|
|
|
|
|
|
Estimated Future Payouts Under Non-Equity
|
|
|
Shares of
|
|
|
Securities
|
|
|
Base Price
|
|
|
of Stock
|
|
|
|
|
|
|
Incentive Plan Awards
|
|
|
Stock or
|
|
|
Underlying
|
|
|
of Option
|
|
|
and Option
|
|
|
|
Grant
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Units
|
|
|
Options
|
|
|
Awards
|
|
|
Awards
|
|
Name
|
|
Date
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
(#)
|
|
|
(#)
|
|
|
($/Sh)
|
|
|
($)
|
|
|
John W. Thompson
|
|
|
|
|
|
$
|
500,000
|
(1)
|
|
$
|
1,000,000
|
(1)
|
|
$
|
5,000,000
|
(1)
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
$
|
|
|
James A. Beer
|
|
|
5/10/2007(2
|
)
|
|
$
|
264,000
|
(1)
|
|
$
|
528,000
|
(1)
|
|
$
|
5,000,000
|
(1)
|
|
|
50,000
|
|
|
|
150,000
|
|
|
$
|
19.48
|
|
|
$
|
1,833,665
|
|
|
|
|
|
|
|
$
|
112,500
|
(3)
|
|
$
|
450,000
|
(3)
|
|
$
|
900,000
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gregory W. Hughes
|
|
|
5/10/2007(2
|
)
|
|
$
|
173,688
|
(1)(4)
|
|
$
|
380,688
|
(1)
|
|
$
|
5,000,000
|
(1)
|
|
|
50,000
|
|
|
|
150,000
|
|
|
$
|
19.48
|
|
|
$
|
1,833,665
|
|
|
|
|
|
|
|
$
|
112,500
|
(4)
|
|
$
|
450,000
|
(3)
|
|
$
|
900,000
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enrique T. Salem
|
|
|
5/10/2007(2
|
)
|
|
$
|
190,000
|
(1)(5)
|
|
$
|
380,000
|
(1)(5)
|
|
$
|
5,000,000
|
(1)
|
|
|
50,000
|
|
|
|
150,000
|
|
|
$
|
19.48
|
|
|
$
|
1,833,665
|
|
|
|
|
2/8/2008(2
|
)
|
|
$
|
112,500
|
(3)
|
|
$
|
450,000
|
(3)
|
|
$
|
900,000
|
(3)
|
|
|
30,000
|
|
|
|
100,000
|
|
|
$
|
17.90
|
|
|
$
|
1,022,080
|
|
Janice Chaffin
|
|
|
5/10/2007(2
|
)
|
|
$
|
164,250
|
(1)
|
|
$
|
360,000
|
(1)
|
|
$
|
5,000,000
|
(1)
|
|
|
50,000
|
|
|
|
150,000
|
|
|
$
|
19.48
|
|
|
$
|
1,833,665
|
|
|
|
|
|
|
|
$
|
112,500
|
(3)
|
|
$
|
450,000
|
(3)
|
|
$
|
900,000
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas W. Kendra
|
|
|
5/10/2007(2
|
)
|
|
$
|
167,900
|
(1)
|
|
$
|
368,000
|
(1)
|
|
$
|
5,000,000
|
(1)
|
|
|
50,000
|
|
|
|
150,000
|
|
|
$
|
19.48
|
|
|
$
|
1,833,665
|
|
(former executive officer)
|
|
|
|
|
|
$
|
112,500
|
(3)(6)
|
|
$
|
450,000
|
(3)(6)
|
|
$
|
900,000
|
(3)(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gregory S. Butterfield
|
|
|
5/10/2007(2
|
)
|
|
$
|
164,250
|
(1)
|
|
$
|
360,000
|
(1)
|
|
$
|
5,000,000
|
(1)
|
|
|
50,000
|
|
|
|
115,000
|
|
|
$
|
19.48
|
|
|
$
|
1,633,077
|
|
(former executive officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
56
|
|
|
(1) |
|
Represents threshold, target and maximum payouts with respect to
each applicable metric under the FY08 Executive Annual Incentive
Plan. |
|
(2) |
|
Represents grant date of stock awards and option awards. |
|
(3) |
|
Represents threshold, target and maximum payouts under the FY08
LTIP. Payment under this plan is contingent upon employment
through the end of fiscal 2010. |
|
(4) |
|
Threshold amount for Mr. Hughes represents amounts based on
Mr. Hughes position as Group President, Global
Services as of May 1, 2007 along with equally weighted
earnings per share and revenue metrics. This position contained
a business unit contribution metric with a 30% weighting under
the FY08 Executive Annual Incentive Plan. In January 2008,
Mr. Hughes was appointed our Chief Strategy Officer, a
position without a business unit contribution metric under the
FY08 Executive Annual Incentive Plan. Mr. Hughes
actual payout for fiscal 2008 (as reflected in the Summary
Compensation Table) represents a weighting including the
services business unit component for the first three quarters of
fiscal 2008 and only the earnings per share and revenue metrics
for the fourth quarter. |
|
(5) |
|
Threshold and target amounts are based on 50% and 80%,
respectively, of Mr. Salems annual salary which was
$475,000 as of May 1, 2007 and was increased to an annual
salary of $625,000 in January 2008 without retroactive effect.
Actual payouts (reflected in the Summary Compensation Table)
were based on Mr. Salems total base earnings of
$509,659 for fiscal 2008. |
|
(6) |
|
Mr. Kendras employment with Symantec ended prior to
the LTIP payout date, therefore he will not receive any payouts
under the FY08 LTIP. |
For a summary of the terms of the FY08 Executive Annual
Incentive Plan, see Compensation Discussion &
Analysis (CD&A) Compensation
Components Executive Annual Incentive Plans
beginning on page 45. For a summary of the terms of the
FY08 LTIP, see Compensation Discussion & Analysis
(CD&A) Compensation Components Long
Term Incentive Plans (LTIP) beginning on page 47.
57
The following table shows for the fiscal year ended
March 28, 2008, certain information regarding outstanding
equity awards at fiscal year end for the Named Executive
Officers.
Outstanding
Equity Awards At Fiscal Year-End 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Market Value
|
|
|
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
of Shares or
|
|
|
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Units of
|
|
|
Units of
|
|
|
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
|
|
|
Stock That
|
|
|
Stock That
|
|
|
|
|
|
|
Options
|
|
|
Options
|
|
|
Exercise
|
|
|
Option
|
|
|
Have Not
|
|
|
Have Not
|
|
|
|
|
|
|
(#)
|
|
|
(#)
|
|
|
Price
|
|
|
Expiration
|
|
|
Vested
|
|
|
Vested
|
|
Name
|
|
Grant Date
|
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
($)
|
|
|
Date
|
|
|
(#)
|
|
|
($)
|
|
|
John W. Thompson
|
|
|
1/1/2000
|
|
|
|
735,200
|
|
|
|
|
|
|
$
|
7.33
|
|
|
|
1/1/2010
|
|
|
|
|
|
|
$
|
|
|
|
|
|
12/18/2000
|
|
|
|
2,378,072
|
|
|
|
|
|
|
$
|
4.32
|
|
|
|
12/18/2010
|
|
|
|
|
|
|
$
|
|
|
|
|
|
12/5/2001
|
|
|
|
3,987,824
|
|
|
|
|
|
|
$
|
8.21
|
|
|
|
12/5/2011
|
|
|
|
|
|
|
$
|
|
|
|
|
|
10/20/2004
|
|
|
|
427,081
|
|
|
|
72,919
|
(1)
|
|
$
|
27.68
|
|
|
|
10/20/2014
|
|
|
|
|
|
|
$
|
|
|
|
|
|
10/20/2005
|
|
|
|
453,125
|
|
|
|
296,875
|
(2)
|
|
$
|
22.68
|
|
|
|
10/20/2012
|
|
|
|
|
|
|
$
|
|
|
James A. Beer
|
|
|
3/3/2006
|
|
|
|
150,000
|
|
|
|
150,000
|
(3)
|
|
$
|
16.98
|
|
|
|
3/3/2013
|
|
|
|
50,000
|
(16)
|
|
$
|
841,000
|
|
|
|
|
5/10/2007
|
|
|
|
|
|
|
|
150,000
|
(5)
|
|
$
|
19.48
|
|
|
|
5/10/2014
|
|
|
|
50,000
|
(17)
|
|
$
|
841,000
|
|
Gregory W. Hughes
|
|
|
11/4/2003
|
|
|
|
562,099
|
|
|
|
|
|
|
$
|
32.96
|
|
|
|
11/4/2010,
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/4/2013 (23
|
)
|
|
|
|
|
|
|
|
|
|
|
|
2/15/2005
|
|
|
|
210,787
|
|
|
|
42,158
|
(12)
|
|
$
|
21.85
|
|
|
|
2/15/2012
|
|
|
|
|
|
|
$
|
|
|
|
|
|
11/15/2004
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
5,269
|
(21)
|
|
$
|
88,625
|
|
|
|
|
7/2/2005
|
|
|
|
58,332
|
|
|
|
29,168
|
(11)
|
|
$
|
21.22
|
|
|
|
7/2/2015
|
|
|
|
|
|
|
$
|
|
|
|
|
|
10/20/2005
|
|
|
|
21,145
|
|
|
|
13,855
|
(2)
|
|
$
|
22.68
|
|
|
|
10/20/2012
|
|
|
|
|
|
|
$
|
|
|
|
|
|
4/4/2006
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
100,000
|
(20)
|
|
$
|
1,682,000
|
|
|
|
|
5/12/2006
|
|
|
|
57,291
|
|
|
|
67,709
|
(4)
|
|
$
|
17.02
|
|
|
|
5/12/2013
|
|
|
|
|
|
|
$
|
|
|
|
|
|
5/10/2007
|
|
|
|
|
|
|
|
150,000
|
(5)
|
|
$
|
19.48
|
|
|
|
5/10/2014
|
|
|
|
50,000
|
(17)
|
|
$
|
841,000
|
|
Enrique T. Salem
|
|
|
6/22/2004
|
|
|
|
183,336
|
|
|
|
7,500
|
(14)
|
|
$
|
1.61, $20.36
|
(24)
|
|
|
6/22/2014,
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7/15/2013,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/5/2012
|
(25)
|
|
|
|
|
|
|
|
|
|
|
|
10/20/2005
|
|
|
|
42,291
|
|
|
|
27,709
|
(2)
|
|
$
|
22.68
|
|
|
|
10/20/2012
|
|
|
|
|
|
|
$
|
|
|
|
|
|
4/4/2006
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
100,000
|
(20)
|
|
$
|
1,682,000
|
|
|
|
|
5/12/2006
|
|
|
|
80,208
|
|
|
|
94,792
|
(13)
|
|
$
|
17.02
|
|
|
|
5/12/2013
|
|
|
|
|
|
|
$
|
|
|
|
|
|
5/10/2007
|
|
|
|
|
|
|
|
150,000
|
(5)
|
|
$
|
19.48
|
|
|
|
5/10/2014
|
|
|
|
50,000
|
(17)
|
|
$
|
841,000
|
|
|
|
|
2/8/2008
|
|
|
|
|
|
|
|
100,000
|
(15)
|
|
$
|
17.90
|
|
|
|
2/8/2015
|
|
|
|
30,000
|
(22)
|
|
$
|
504,600
|
|
Janice Chaffin
|
|
|
5/6/2003
|
|
|
|
330,000
|
|
|
|
|
|
|
$
|
11.36
|
|
|
|
5/6/2013
|
|
|
|
|
|
|
$
|
|
|
|
|
|
10/20/2004
|
|
|
|
59,790
|
|
|
|
10,210
|
(1)
|
|
$
|
27.68
|
|
|
|
10/20/2014
|
|
|
|
|
|
|
$
|
|
|
|
|
|
12/15/2005
|
|
|
|
39,375
|
|
|
|
30,625
|
(10)
|
|
$
|
17.74
|
|
|
|
12/15/2012
|
|
|
|
|
|
|
$
|
|
|
|
|
|
4/4/2006
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
100,000
|
(20)
|
|
$
|
1,682,000
|
|
|
|
|
5/12/2006
|
|
|
|
57,291
|
|
|
|
67,709
|
(4)
|
|
$
|
17.02
|
|
|
|
5/12/2013
|
|
|
|
|
|
|
$
|
|
|
|
|
|
5/10/2007
|
|
|
|
|
|
|
|
150,000
|
(5)
|
|
$
|
19.48
|
|
|
|
5/10/2014
|
|
|
|
50,000
|
(17)
|
|
$
|
841,000
|
|
Thomas W. Kendra
|
|
|
1/14/2004
|
|
|
|
300,000
|
|
|
|
|
|
|
$
|
17.71
|
|
|
|
1/14/2014
|
|
|
|
|
|
|
$
|
|
|
(former executive officer)
|
|
|
10/20/2004
|
|
|
|
59,791
|
|
|
|
10,209
|
(1)
|
|
$
|
27.68
|
|
|
|
10/20/2014
|
|
|
|
|
|
|
$
|
|
|
|
|
|
10/20/2005
|
|
|
|
45,312
|
|
|
|
29,688
|
(2)
|
|
$
|
22.68
|
|
|
|
10/20/2012
|
|
|
|
|
|
|
$
|
|
|
|
|
|
4/4/2006
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
100,000
|
(20)
|
|
$
|
1,682,000
|
|
|
|
|
5/12/2006
|
|
|
|
80,208
|
|
|
|
94,792
|
(4)
|
|
$
|
17.02
|
|
|
|
5/12/2013
|
|
|
|
|
|
|
$
|
|
|
|
|
|
5/10/2007
|
|
|
|
|
|
|
|
150,000
|
(5)
|
|
$
|
19.48
|
|
|
|
5/10/2014
|
|
|
|
50,000
|
(17)
|
|
$
|
841,000
|
|
Gregory S. Butterfield
|
|
|
5/18/2005
|
|
|
|
3,179
|
|
|
|
3,179
|
(7)
|
|
$
|
9.91
|
|
|
|
5/18/2015
|
|
|
|
|
|
|
$
|
|
|
(former executive
|
|
|
2/8/2006
|
|
|
|
3,973
|
|
|
|
3,974
|
(8)
|
|
$
|
9.21
|
|
|
|
2/18/2016
|
|
|
|
|
|
|
$
|
|
|
officer)
|
|
|
8/3/2006
|
|
|
|
14,940
|
|
|
|
14,306
|
(9)
|
|
$
|
10.74
|
|
|
|
8/3/2016
|
|
|
|
14,306
|
(19)
|
|
$
|
240,627
|
|
|
|
|
5/10/2007
|
|
|
|
|
|
|
|
115,000
|
(6)
|
|
$
|
19.48
|
|
|
|
5/10/2014
|
|
|
|
50,000
|
(18)
|
|
$
|
841,000
|
|
|
|
|
(1) |
|
Unvested options vest in equal installments monthly on the 20th
of each month ending on 10/20/2008. |
|
(2) |
|
Unvested options vest in equal installments monthly on the 20th
of each month ending on 10/20/2009. |
58
|
|
|
(3) |
|
Unvested options vest in equal installments monthly on the 28th
of each month ending on 2/28/2010. |
|
(4) |
|
Unvested options vest in equal installments monthly on the 12th
of each month ending on 5/12/2010. |
|
(5) |
|
Options vest at a rate of 25% on 5/10/2008 and 2.0833% on the
10th of each month ending 5/10/2011. |
|
(6) |
|
Options vest at a rate of 50% on 4/6/2009 and 2.0833% on the 6th
of each month ending 4/6/2011. |
|
(7) |
|
Options for 6,358 shares accelerated on 4/6/2007, options
for 3,179 shares accelerated on 10/6/2007 and options for
3,179 shares remain unvested as of 3/28/2008. |
|
(8) |
|
Options for 7,948 shares accelerated on 4/6/2007, options
for 3,973 shares accelerated on 10/6/2007 and options for
3,974 shares remain unvested as of 3/28/2008. |
|
(9) |
|
Options for 28,613 shares accelerated on 4/6/2007, options
for 14,306 shares accelerated on 10/6/2007 and options for
14,306 shares remain unvested as of 3/28/2008. |
|
(10) |
|
Unvested options vest in equal installments monthly on the 15th
of each month ending on 12/15/2009. |
|
(11) |
|
Unvested options vest monthly on the 2nd of each month ending on
7/2/2009. |
|
(12) |
|
Unvested options vest in equal installments monthly on the 15th
of each month ending on 11/15/2008. |
|
(13) |
|
Unvested options vest in equal installments monthly on the 12th
of each month ending on 5/12/2010. |
|
(14) |
|
Unvested options vest in equal installments monthly on the 22nd
of each month ending on 6/22/2008. |
|
(15) |
|
Options vest at a rate of 25% on 2/8/2009 and 2.0833% on the 8th
of each month ending 2/8/2012. |
|
(16) |
|
25,000 shares to vest on 3/03/2009 and 25,000 shares
to vest on 03/03/2010. |
|
(17) |
|
25,000 shares to vest on 6/1/2008 and 25,000 shares to
vest on 6/1/2009. |
|
(18) |
|
25,000 shares to vest on 4/6/2009, 12,500 shares to
vest on 4/6/2010, and 12,500 shares to vest on 4/6/2011. |
|
(19) |
|
14,306 shares to vest on 4/6/2008. |
|
(20) |
|
100% of shares to vest on 4/04/2008. |
|
(21) |
|
2,635 shares to vest on 5/15/2008 and 2,634 shares to vest
on 11/15/2008. |
|
(22) |
|
7,500 shares to vest on 3/1/2009, 7,500 shares to vest
on 3/1/2010, 7,500 shares to vest on 3/1/2011, and
7,500 shares to vest on 3/1/2012. |
|
(23) |
|
Options for 558,306 shares expire on 11/4/2010, and options
for 3,793 shares expire on 11/4/2013. |
|
(24) |
|
151,836 shares granted at $1.61 and 120,000 shares
granted at $20.36. |
|
(25) |
|
106,162 shares expire on 12/5/2012, 45,674 shares
expire on 7/15/2013, and 120,000 shares expire on
6/22/2014. |
The following table shows for the fiscal year ended
March 28, 2008, certain information regarding option
exercises and stock vested during the last fiscal year with
respect to the Named Executive Officers:
Option
Exercises and Stock Vested in Fiscal 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
Shares
|
|
|
|
|
|
Shares
|
|
|
|
|
|
|
Acquired
|
|
|
Value Realized
|
|
|
Acquired
|
|
|
Value Realized
|
|
|
|
on Exercise
|
|
|
on Exercise
|
|
|
on Vesting
|
|
|
on Vesting
|
|
Name
|
|
(#)
|
|
|
($)
|
|
|
(#)
|
|
|
($)
|
|
|
John W. Thompson
|
|
|
224,800
|
|
|
$
|
2,939,375
|
|
|
|
|
|
|
$
|
|
|
James A. Beer
|
|
|
|
|
|
$
|
|
|
|
|
25,000
|
|
|
$
|
421,250
|
|
Gregory W. Hughes
|
|
|
|
|
|
$
|
|
|
|
|
5,270
|
|
|
$
|
97,442
|
|
Enrique T. Salem
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
Janice Chaffin
|
|
|
30,000
|
|
|
$
|
289,795
|
|
|
|
|
|
|
$
|
|
|
Thomas W. Kendra
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
$
|
|
|
(former executive officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gregory S. Butterfield
|
|
|
275,000
|
|
|
$
|
3,461,644
|
|
|
|
14,306
|
|
|
$
|
291,699
|
|
(former executive officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
59
Potential
Payments Upon Termination or
Change-In-Control
Set forth below is a description of the plans and agreements
that could result in potential payouts to the named executive
officers in the case of their termination of employment
and/or a
change in control of Symantec.
Symantec
Executive Retention Plan
In January 2001, the Board approved the Symantec Executive
Retention Plan, to deal with employment termination resulting
from a change in control of the company. The plan was modified
by the Board in July 2002, April 2006 and June 2007. Under the
terms of the plan, all equity compensation awards (including,
among others, options and restricted stock units) granted by the
company to the companys Section 16(b) officers
(including the named executive officers) would become fully
vested and, if applicable, exercisable following a change in
control of the Company (as defined in the plan) after which the
officers employment is terminated without cause or
constructively terminated by the acquirer within 12 months
after the change in control.
Symantec
Corporation Severance Plan
During fiscal 2008, we adopted the Symantec Corporation
Severance Plan, effective as of July 1, 2007, to provide
severance benefits to certain eligible employees of Symantec.
Individual employees must meet certain criteria in order to
participate in the plan, including, among other criteria,
(i) the employee is not entitled to severance under any
other plan, fund, program, policy, arrangement or individualized
written agreement providing for severance benefits that is
sponsored or funded by Symantec and (ii) the employee was
involuntarily terminated from active employment because of
market conditions or division performance resulting in
elimination of their position, and not solely because of poor
work performance.
Under the terms of the plan, eligible employees at the Vice
President level or above receive severance payments calculated
as follows: (i) severance payments equal to ten weeks of
base pay if such employee has been employed by Symantec for one
year or less; or (ii) severance payments equal to ten weeks
of base pay plus the amount calculated by multiplying two weeks
of base pay times the number of years of such employees
employment by Symantec after the first year of employment,
prorated through the termination date. If an eligible employee
timely elects COBRA continuation coverage under Symantecs
group insurance plans, Symantec will also subsidize the full
amount of premiums for such eligible employees for the period of
time upon which severance payments are paid under the plan.
Symantec will subsidize premiums for continuation coverage at
the same level of coverage in effect immediately before
termination of employment for the applicable employee. Eligible
employees at the Vice President level are also entitled to
receive six months of outplacement services, including
counseling and guidance.
Payment of severance payments and COBRA premiums and provision
of outplacement assistance pursuant to the Symantec Corporation
Severance Plan is subject to the applicable employees
returning a release of claims against Symantec.
John
W. Thompson
In accordance with an employment agreement dated April 11,
1999 between Mr. Thompson and Symantec, in the event
Mr. Thompson resigns with good reason (i.e., material
reduction in responsibilities, position or salary) or is
terminated without cause (as defined in the agreement), he is
entitled to a severance payment equal to twice his annual base
salary, the vesting of his outstanding options will be
accelerated by two years and he will be entitled to
reimbursement of COBRA premiums for the maximum period permitted
by law. We also began maintaining a $5,000,000 term executive
life insurance policy on Mr. Thompson for the benefit of
his family and coverage under our long term disability plan that
would pay Mr. Thompson up to $20,000 per month following
the 180th day after any disability.
In the event that Mr. Thompsons employment is
terminated due to his death or disability, the vesting of his
outstanding options will be accelerated by two years.
Additionally, in the case of his death, his designated
beneficiary will be entitled to a single lump sum death benefit
of $5,000,000 (in accordance with Symantecs life insurance
plan), and in the case of his disability, he will be entitled to
disability payments of up to $20,000 a month after 180 days
of continued disability (in accordance with Symantecs long
term disability plan). If Mr. Thompson
60
had died or if the Board had determined that he was disabled as
of March 28, 2008, his beneficiaries would have received
$5,000,000, or he would have thereafter begun receiving payments
of $25,000 per month for 60 months followed by payments of
$10,000 per month for 36 months, as the case may be, under
these arrangements.
The following table summarizes the value of the payouts to
Mr. Thompson pursuant to Mr. Thompsons
employment agreement, the Symantec Executive Retention Plan,
assuming a qualifying termination as of March 28, 2008
(intrinsic values of equity awards are based upon the closing
price for a share of our common stock of $16.82 on
March 28, 2008 minus the exercise price):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
|
|
|
WithoutCause
|
|
|
|
|
|
|
or Constructive
|
|
|
|
|
|
|
Termination
|
|
|
|
|
|
|
Within
|
|
|
|
|
|
|
12 Months of a
|
|
|
|
|
Resignation with Good Reason or
|
|
Change of
|
|
|
|
|
Termination Without Cause
|
|
Control
|
|
Termination Due to Death
|
|
Termination Due to Disability
|
|
|
Option
|
|
COBRA
|
|
Option
|
|
Option
|
|
Death
|
|
Option
|
|
Long Term Disability
|
Severance Pay
|
|
Vesting
|
|
Premiums
|
|
Vesting
|
|
Vesting
|
|
Benefit
|
|
Vesting
|
|
Benefits
|
|
$
|
1,600,000
|
|
|
$
|
0
|
|
|
$
|
28,077
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
5,000,000
|
|
|
$
|
0
|
|
|
|
$25,000/month for 60 months and
$10,000/month for 36 months thereafter
|
|
James
A. Beer
On February 10, 2006, Symantec entered into an employment
letter agreement with Mr. Beer. The employment letter
agreement provides for severance in the event
Mr. Beers employment is terminated without cause
within the first three years of employment, which severance is
comprised of an amount equal to 12 months of his base
salary at the time of termination and full vesting of his
initial grant of 100,000 restricted stock units. The payment of
the foregoing severance benefits is subject to
Mr. Beers returning a release of claims against
Symantec.
The following table summarizes the value of the payouts to
Mr. Beer pursuant to Mr. Beers employment letter
agreement, the Symantec Executive Retention Plan and the
Symantec Corporation Severance Plan, assuming a qualifying
termination as of March 28, 2008 (intrinsic values of
equity awards are based upon the closing price for a share of
our common stock of $16.82 on March 28, 2008 minus the
exercise price):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary Termination
|
|
|
|
|
Because of Market
|
|
Termination Without
|
|
Termination Without Cause or
|
Conditions or Division
|
|
Cause Prior to
|
|
Constructive Termination Within
|
Performance
|
|
February 28, 2009
|
|
12 Months of a Change of Control
|
COBRA Premiums
|
|
Severance Pay
|
|
RSU Vesting
|
|
Option Vesting
|
|
RSU Vesting
|
|
$
|
4,491
|
|
|
$
|
660,000
|
|
|
$
|
841,000
|
|
|
$
|
0
|
|
|
$
|
1,682,000
|
|
Gregory
W. Hughes
Symantec entered into an employment agreement, dated
December 15, 2004 with Mr. Hughes, which became
effective on July 2, 2005. Pursuant to that agreement, if
the employment of Mr. Hughes is terminated by Symantec
without cause (as defined in Mr. Hughess agreement)
or is terminated due to death or permanent disability, or if
Mr. Hughes resigns with good reason (i.e. material
reduction in responsibilities, position or salary), then
Mr. Hughes is entitled to the following:
|
|
|
|
|
All unvested stock options and restricted stock units assumed by
Symantec in its acquisition of Veritas will vest in full at the
time of termination of employment. The exercise period specified
in each of the applicable stock option or restricted stock unit
agreements will apply for exercise after termination of
employment.
|
|
|
|
Full payment of premiums for COBRA continuation health care
coverage for the executive, his spouse and his other eligible
dependents under Symantecs group health plan, until the
earlier of
(i) 12-months
after the first day of the first month after termination of
employment or (ii) the first date that executive receives
coverage under another employers program providing
substantially the same level of benefits without exclusion for
pre-existing medical conditions.
|
61
The following table summarizes the value of the payouts to
Mr. Hughes pursuant to Mr. Hughes employment
agreement, the Symantec Executive Retention Plan, and the
Symantec Corporation Severance Plan assuming a qualifying
termination as of March 28, 2008 (intrinsic values of
equity awards are based upon the closing price for a share of
our common stock of $16.82 on March 28, 2008 minus the
exercise price):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Without
|
Involuntary Termination
|
|
|
|
Cause or Constructive
|
Because of Market
|
|
Termination Without Cause or
|
|
Termination within 12
|
Conditions or Division
|
|
Resignation With Good Reason, or
|
|
Months of a Change
|
Performance
|
|
Termination Due to Death or Disability
|
|
of Control
|
Severance Pay
|
|
Option Vesting
|
|
RSU Vesting
|
|
COBRA Premiums
|
|
Option Vesting
|
|
RSU Vesting
|
|
$
|
154,837
|
|
|
$
|
0
|
|
|
$
|
88,625
|
|
|
$
|
18,899
|
|
|
$
|
0
|
|
|
$
|
2,523,000
|
|
Enrique
T. Salem
The following table summarizes the value of the payouts to
Mr. Salem pursuant to the Symantec Executive Retention Plan
and the Symantec Corporation Severance Plan, assuming a
qualifying termination as of March 28, 2008 (intrinsic
values of equity awards are based upon the closing price for a
share of our common stock of $16.82 on March 28, 2008 minus
the exercise price):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Without Cause or
|
|
|
Constructive Termination
|
Involuntary Termination Because of
|
|
Within 12 Months of a
|
Market Conditions or Division Performance
|
|
Change of Control
|
Severance Pay
|
|
COBRA Premiums
|
|
Option Vesting
|
|
RSU Vesting
|
|
$
|
190,625
|
|
|
$
|
6,376
|
|
|
$
|
0
|
|
|
$
|
3,027,600
|
|
Janice
Chaffin
The following table summarizes the value of the payouts to
Ms. Chaffin pursuant to the Symantec Executive Retention
Plan and the Symantec Corporation Severance Plan, assuming a
qualifying termination as of March 28, 2008 (intrinsic
values of equity awards are based upon the closing price for a
share of our common stock of $16.82 on March 28, 2008 minus
the exercise price):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Without Cause or
|
|
|
Constructive Termination
|
|
|
Within 12 Months of a
|
Involuntary Termination Because of Market Conditions or
Division Performance
|
|
Change of Control
|
Severance Pay
|
|
COBRA Premiums
|
|
Option Vesting
|
|
RSU Vesting
|
|
$
|
154,039
|
|
|
$
|
6,895
|
|
|
$
|
0
|
|
|
$
|
2,523,000
|
|
Gregory
S. Butterfield
On January 26, 2007, Symantec entered into an employment
letter agreement with Mr. Butterfield. Pursuant to that
agreement, in the event that Mr. Butterfield resigns for
good reason (i.e. material reduction in position or salary,
relocation, material breach of the employment letter agreement
by Symantec) or if the employment of Mr. Butterfield is
terminated other than for cause (as defined in the employment
letter agreement, with reference to Mr. Butterfields
employment agreement with Altiris dated July 26,
2006) or is terminated due to death or disability before
April 6, 2009, then Mr. Butterfield is entitled to the
following:
|
|
|
|
|
All unvested stock options, restricted share awards or other
equity awards assumed by Symantec in its acquisition of Altiris
will vest in full at the time of termination of employment. Any
right of repurchase held by Symantec with respect to such equity
awards will fully lapse at such time.
|
|
|
|
Severance payments in the following amounts, to be paid within
30 days of termination of employment: (i) an amount
equal to two years of Mr. Butterfields base salary as
of April 6, 2007; and (ii) an amount equal to two
times Mr. Butterfields annual bonus with a bonus
target of 40% of his annual base salary as of April 6, 2007.
|
62
|
|
|
|
|
Full payment of premiums for COBRA continuation healthcare
coverage for Mr. Butterfield and his eligible dependents
under Symantecs group health plan for the first
18 months of continuation coverage following termination of
employment, or until the earlier date on which
(i) Mr. Butterfield is no longer eligible to receive
continuation coverage under COBRA, or
(ii) Mr. Butterfield obtains substantially similar
coverage under another employers group insurance plan.
|
In the event that Mr. Butterfield resigns for good reason
(i.e. material reduction in position or salary, relocation,
material breach of the employment letter agreement by Symantec)
or if the employment of Mr. Butterfield is terminated other
than for cause (as defined in the employment letter agreement)
or is terminated due to death or disability before April 6,
2009, then Mr. Butterfield is entitled to the following:
|
|
|
|
|
Twenty-five percent of the Symantec common stock subject to
Mr. Butterfields initial option grant to purchase
115,000 shares and initial grant of 50,000 restricted stock
units will vest at the time of termination of employment.
|
|
|
|
The one-time payment of $900,000 shall be paid within
30 days of termination of employment.
|
The payment of the foregoing severance benefits is subject to
Mr. Butterfields returning a release of claims
against Symantec. The following table summarizes the value of
the payouts to Mr. Butterfield pursuant to
Mr. Butterfields employment letter agreement,
assuming a qualifying termination as of March 28, 2008
(intrinsic values of equity awards are based upon the closing
price for a share of our common stock of $16.82 on
March 28, 2008 minus the exercise price):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Other Than for Cause
|
|
Termination Other Than for Cause
|
(as defined in Altiris Agreement), or
|
|
(as defined in Symantec Agreement), or
|
Resignation for Good Reason, or
|
|
Resignation for Good Reason, or
|
Termination Due to Death or Disability
|
|
Termination Due to Death or Disability
|
Severance Pay
|
|
Option Vesting
|
|
RSU Vesting
|
|
COBRA Premiums
|
|
Severance Pay
|
|
Option Vesting
|
|
RSU Vesting
|
|
$
|
1,120,000
|
|
|
$
|
139,189
|
|
|
$
|
240,627
|
|
|
$
|
28,908
|
|
|
$
|
900,000
|
|
|
$
|
0
|
|
|
$
|
210,250
|
|
Thomas
W. Kendra
The following table summarizes the value of the payouts to
Mr. Kendra pursuant to the Symantec Executive Retention
Plan and the Symantec Corporation Severance Plan, assuming a
qualifying termination as of March 28, 2008 (intrinsic
values of equity awards are based upon the closing price for a
share of our common stock of $16.82 on March 28, 2008 minus
the exercise price):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary Termination Because of
|
|
|
Market Conditions or Division Performance
|
|
Termination Without Cause or Constructive Termination Within
12 Months of a Change of Control
|
Severance Pay
|
|
COBRA Premiums
|
|
Option Vesting
|
|
RSU Vesting
|
|
$
|
145,254
|
|
|
$
|
6,261
|
|
|
$
|
0
|
|
|
$
|
2,523,000
|
|
63
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Related-Person
Transactions Policy and Procedures
Symantec has adopted a written related person transactions
policy which provides for the companys policies and
procedures regarding the identification, review, consideration
and approval or ratification of related person
transactions. The Nominating and Governance Committee
reviews transactions that may be related person
transactions, which are transactions between Symantec and
any related persons in which the aggregate amount involved
exceeds or may be expected to exceed $120,000, and in which the
related person has or will have a direct or indirect material
interest. For purposes of the policy, a related person is any
Symantec executive officer, director, nominee for director, or
stockholder holding more than 5% of any class of Symantecs
voting securities, in each case, since the beginning of the
previous fiscal year, and their immediate family members.
Under the policy, absent any facts or circumstances indicating
special or unusual benefits to the related person, the following
transactions are deemed not to be related person
transactions (meaning the related person is deemed to not
have a direct or indirect material interest in the transaction):
|
|
|
|
|
compensation to executive officers determined by Symantecs
Compensation Committee;
|
|
|
|
any transaction with another company at which a related person
is a director or an employee (other than an executive officer)
if the aggregate amount involved does not exceed the greater of
$2,000,000, or three percent of that companys total annual
gross revenues, provided that the transaction involves the
purchase of either companys goods and services and the
transaction is subject to usual trade terms and is in the
ordinary course of business and the related person is not
involved in the negotiation of the transaction;
|
|
|
|
any compensation paid to a director if the compensation is
required to be reported in Symantecs proxy statement;
|
|
|
|
any transaction where the related persons interest arises
solely from the ownership of the companys common stock and
all holders of the companys common stock received the same
benefit on a pro rata basis;
|
|
|
|
any charitable contribution, grant or endowment by Symantec or
the Symantec Foundation to a charitable organization, foundation
or university at which a related persons only relationship
is as a director or an employee (other than an executive
officer), if the aggregate amount involved does not exceed
$1,000,000, or any non-discretionary matching contribution,
grant or endowment made pursuant to a matching gift program;
|
|
|
|
any transaction where the rates or charges involved are
determined by competitive bids;
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any transaction involving the rendering of services as a common
or contract carrier, or public utility, at rates or charges
fixed in conformity with law or governmental authority; or
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any transaction involving services as a bank depositary of
funds, transfer agent, registrar, trustee under a trust
indenture, or similar services.
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Under the policy, members of Symantecs legal department
review transactions involving related persons that do not fall
into one of the above categories. If they determine that a
related person could have a significant interest in a
transaction, the transaction is referred to the Nominating and
Governance Committee. In addition, transactions may be
identified through Symantecs Code of Conduct or other
Symantec policies and procedures, and reported to the Nominating
and Governance Committee. The Nominating and Governance
Committee determines whether the related person has a material
interest in a transaction and may approve, ratify, rescind or
take other action with respect to the transaction.
Certain
Related Person Transactions
In May 2008, Symantec entered into a dry-lease agreement for an
aircraft with a company owned by Mr. Thompson, our Chairman
and CEO. Pursuant to the agreement, Symantec leases the aircraft
on a non-exclusive basis from Mr. Thompsons company
from time to time solely for Mr. Thompsons
business-related travel, at a dry-lease rate of $1,250 per
flight hour. Pursuant to an agreement with an unrelated party,
Symantec has also agreed to pay the variable operating costs of
Mr. Thompsons business travel on this aircraft. The
arrangement was approved by the Nominating and Governance
Committee of our Board. The Nominating and Governance Committee
has determined that the amounts billed by
Mr. Thompsons company for our use of the aircraft are
at or below the market rates charged by third-party commercial
charter companies for similar aircraft. Symantec did not make
any payments under this arrangement during fiscal 2008.
64
REPORT OF
THE AUDIT COMMITTEE
The information contained in the following report of
Symantecs Audit Committee is not considered to be
soliciting material, filed or
incorporated by reference in any past or future filing by
Symantec under the Securities Exchange Act of 1934 or the
Securities Act of 1933 unless and only to the extent that
Symantec specifically incorporates it by reference.
The Audit Committee is comprised solely of independent
directors, as defined in the Marketplace Rules of the NASDAQ
Stock Market, and operates under a written charter which was
most recently amended by the Board on July 24, 2007. The
Audit Committee oversees Symantecs financial reporting
process on behalf of the Board. Management has primary
responsibility for the financial statements and the reporting
process, including the systems of internal controls. In
fulfilling its oversight responsibilities, the Audit Committee
reviewed the audited financial statements that were included in
Symantecs Annual Report on
Form 10-K
for the fiscal year ended March 28, 2008 with management,
including a discussion of the quality, not just the
acceptability, of the accounting principles, the reasonableness
of significant judgments, and the clarity of the disclosures in
the financial statements.
The Audit Committee reviewed with Symantecs independent
registered public accounting firm, who are responsible for
expressing an opinion on the conformity of those audited
financial statements with generally accepted accounting
principles, their judgments as to the quality, not just the
acceptability, of Symantecs accounting principles and such
other matters as are required to be discussed with the Audit
Committee under Statement on Auditing Standards No. 114,
The Auditors Communications With Those Charged with
Governance. In addition, the Audit Committee has discussed
with the independent registered public accounting firm the
registered public accounting firms independence from
management and Symantec, including the matters in the written
disclosures required by professional standards. The Audit
Committee also received and reviewed the independence letter
from the independent registered public accounting firm required
by Independence Standards Board Standard No. 1.
The Audit Committee discussed with Symantecs internal
accountants and independent registered public accounting firm
the overall scope and plans for their respective audits. The
Audit Committee meets with the internal accountants and
independent registered public accounting firm, with and without
management present, to discuss the results of their
examinations, their evaluations of Symantecs internal
controls, and the overall quality of Symantecs financial
reporting.
The Audit Committee also received the report of management
contained in Symantecs Annual Report on
Form 10-K
for the fiscal year ended March 28, 2008, as well as
KPMGs Report of Independent Registered Public Accounting
Firm included in Symantecs Annual Report on
Form 10-K
related to its audit of (i) the consolidated financial
statements and financial statement schedule and (ii) the
effectiveness of internal control over financial reporting. The
Audit Committee continues to oversee Symantecs efforts
related to its internal control over financial reporting and
managements preparations for the evaluation in fiscal 2009.
In reliance on the reviews and discussions referred to above,
the Audit Committee recommended to the Board (and the Board has
approved) that the audited financial statements be included in
Symantecs Annual Report on
Form 10-K
for the fiscal year ended March 28, 2008 for filing with
the SEC.
By: The Audit Committee of the Board of Directors:
David L. Mahoney
Robert S. Miller
George Reyes
V. Paul Unruh (Chair)
65
ADDITIONAL
INFORMATION
Stockholder
Proposals for the 2009 Annual Meeting
Requirements for Stockholder Proposals to be Brought Before
an Annual Meeting. Symantecs bylaws provide
that, for stockholder nominations to the Board or other
proposals to be considered at an annual meeting, the stockholder
must have given timely notice thereof in writing to the
Corporate Secretary at Symantec Corporation, 20330 Stevens Creek
Boulevard, Cupertino, California 95014, Attn: Corporate
Secretary.
To be timely for the 2009 annual meeting, a stockholders
notice must be delivered to or mailed and received by the
Corporate Secretary of the company at the principal executive
offices of the company between June 24, 2009 and
July 24, 2009. A stockholders notice to the Corporate
Secretary must set forth as to each matter the stockholder
proposes to bring before the annual meeting the information
required by Symantecs bylaws.
Requirements for Stockholder Proposals to be Considered for
Inclusion in the Companys Proxy
Materials. Stockholder proposals submitted
pursuant to
Rule 14a-8
under the Exchange Act and intended to be presented at
Symantecs 2009 annual meeting must be received by the
company not later than April 13, 2009 in order to be
considered for inclusion in Symantecs proxy materials for
that meeting.
Available
Information
Symantec will mail without charge, upon written request, a copy
of Symantecs Annual Report on
Form 10-K
for fiscal year 2008, including the financial statements,
schedule and list of exhibits, and any exhibit specifically
requested. Requests should be sent to:
Symantec
Corporation
20330 Stevens Creek Boulevard
Cupertino, California 95014
Attn: Investor Relations
The Annual Report is also available at www.symantec.com.
Householding
Stockholders Sharing the Same Last Name and Address
The SEC has adopted rules that permit companies and
intermediaries (such as brokers) to implement a delivery
procedure called householding. Under this procedure,
multiple stockholders who reside at the same address may receive
a single copy of our annual report and proxy materials,
including the Notice of Internet Availability, unless the
affected stockholder has provided contrary instructions. This
procedure reduces printing costs and postage fees, and helps
protect the environment as well.
This year, a number of brokers with account holders who are
Symantec stockholders will be householding our
annual report and proxy materials, including the Notice of
Internet Availability. A single Notice of Internet Availability
and, if applicable, a single set of annual report and other
proxy materials will be delivered to multiple stockholders
sharing an address unless contrary instructions have been
received from the affected stockholders. Once you have received
notice from your broker that it will be householding
communications to your address, householding will
continue until you are notified otherwise or until you revoke
your consent. Stockholders may revoke their consent at any time
by contacting Broadridge ICS, either by calling toll-free
(800) 542-1061,
or by writing to Broadridge ICS, Householding Department, 51
Mercedes Way, Edgewood, New York, 11717.
Upon written or oral request, Symantec will promptly deliver a
separate copy of the Notice of Internet Availability and, if
applicable, annual report and other proxy materials to any
stockholder at a shared address to which a single copy of any of
those documents was delivered. To receive a separate copy of the
Notice of Internet Availability and, if applicable, annual
report and other proxy materials, you may write or call
Symantecs Investor Relations department at 20330 Stevens
Creek Boulevard, Cupertino, California 95014, Attn: Investor
Relations, telephone number
(408) 517-8324.
66
Any stockholders who share the same address and currently
receive multiple copies of Symantecs Notice of Internet
Availability or annual report and other proxy materials who wish
to receive only one copy in the future can contact their bank,
broker or other holder of record to request information about
householding or Symantecs Investor Relations department at
the address or telephone number listed above.
OTHER
MATTERS
The Board does not presently intend to bring any other business
before the meeting and, so far as is known to the Board, no
matters are to be brought before the meeting except as specified
in the notice of the meeting. As to any business that may arise
and properly come before the meeting, however, it is intended
that proxies, in the form enclosed, will be voted in respect
thereof in accordance with the judgment of the persons voting
such proxies.
67
SYMANTEC CORPORATION
2004 EQUITY INCENTIVE PLAN
As Adopted by the Board on July 20, 2004
and as amended thereafter
1. Purpose. The purpose of this Plan is to provide incentives to attract, retain and motivate
eligible persons whose present and potential contributions are important to the success of the
Company, its Parent, Subsidiaries and Affiliates, by offering them an opportunity to participate in
the Companys future performance through awards of Options, Stock Appreciation Rights, Restricted
Stock Units, and Restricted Stock Awards. Capitalized terms not defined in the text are defined in
Section 25.
2. Shares Subject to the Plan.
2.1 Number of Shares Available. Subject to Sections 2.2 and 18, the total number of Shares
reserved and available for grant and issuance pursuant to this Plan will be one hundred eight
million (108,000,000) Shares plus up to fifty-five million four hundred thousand (55,400,000)
shares subject to awards granted under the Companys 1996 Equity Incentive Plan that cancel,
forfeit (e.g., upon the Participants Termination) or otherwise expire by their terms on or
following the adoption of this Plan.
Any award other than an Option or a SAR shall reduce the number of Shares available for
issuance under this Plan by two Shares for every Share issued. Subject to Sections 2.2 and 18,
Shares that: (a) are subject to issuance upon exercise of an Option but cease to be subject to such
Option for any reason other than exercise of such Option; (b) are subject to an Award granted
hereunder but are forfeited or are repurchased by the Company at the original issue price; or (c)
are subject to an Award that otherwise terminates without Shares being issued will again be
available for grant and issuance in connection with future Awards under this Plan. The following
Shares may not again be made available for future grant and issuance as Awards under the Plan: (i)
Shares that are withheld to pay the exercise or purchase price of an Award or to satisfy any tax
withholding obligations in connection with an Award, (ii) Shares not issued or delivered as a
result of the net settlement of an outstanding Option or SAR or (iii) shares of the Companys
Common Stock repurchased on the open market with the proceeds of an Option exercise price. At all
times the Company shall reserve and keep available a sufficient number of Shares as shall be
required to satisfy the requirements of all outstanding Awards granted under this Plan.
2.2 Adjustment of Shares. In the event that the number of outstanding Shares is changed by a
stock dividend, recapitalization, stock split, reverse stock split, subdivision, combination,
reclassification or similar change in the capital structure of the Company without consideration or
there is a change in the corporate structure (including, without limitation, a spin-off), then (a)
the number of Shares reserved for issuance under this Plan, (b) the Exercise Prices of and number
of Shares subject to outstanding Options, (c) the number of Shares that may be granted pursuant to
Section 3 below, and (d) the Purchase Price and number of Shares subject to other outstanding
Awards, including Restricted Stock Awards, will be proportionately adjusted, subject to any
required action by the Board or the stockholders of the Company and compliance with applicable
securities laws; provided, however, that fractions of a Share will not be issued but will be
rounded down to the nearest whole Share, and may be replaced by a cash payment equal to the Fair
Market Value of such fraction of a Share, as determined by the Committee.
3. Eligibility. ISOs (as defined in Section 5 below) may be granted only to employees
(including officers and directors who are also employees) of the Company or of a Parent or
Subsidiary of the Company. All other Awards may be granted to employees, officers, directors,
consultants, independent contractors and advisors of the Company or any Parent, Subsidiary or
Affiliate of the Company; provided such consultants, contractors and advisors render bona fide
services not in connection with the offer and sale of securities in a capital-raising transaction;
and provided further, that unless otherwise determined by the Board, non-employee directors shall
receive Restricted Stock Units only pursuant to the formula award provisions set forth in Section
6. No person will be eligible to receive more than 2,000,000 Shares in any calendar year under this
Plan, pursuant to the grant of Awards hereunder, of which no more than 400,000 Shares shall be
covered by Awards of Restricted Stock and Restricted Stock Units, other than new employees of the
Company or of a Parent or Subsidiary of the Company (including new employees who are also officers
and directors of the Company or any Parent or Subsidiary of the Company), who are eligible to
receive up to a maximum of 3,000,000 Shares in the calendar year in which they commence their
employment, of
which no more than 600,000 Shares shall be covered by Awards of Restricted Stock and Restricted
Stock Units. For purposes of these limits only, each Restricted Stock Unit settled in Shares (but
not those settled in cash), shall be deemed to cover one Share. A person may be granted more than
one Award under this Plan.
4. Administration.
4.1 Committee Authority. This Plan will be administered by the Committee or by the Board
acting as the Committee. Subject to the general purposes, terms and conditions of this Plan, and to
the direction of the Board, except as provided in Section 6, the Committee will have full power to
implement and carry out this Plan. Without limitation, the Committee will have the authority to:
(a) construe and interpret this Plan, any Award Agreement and any other agreement or document
executed pursuant to this Plan;
(b) prescribe, amend and rescind rules and regulations relating to this Plan or any Award;
(c) select persons to receive Awards;
(d) determine the form and terms of Awards;
(e) determine the number of Shares or other consideration subject to Awards;
(f) determine whether Awards will be granted singly, in combination with, in tandem with, in
replacement of, or as alternatives to, other Awards under this Plan or any other incentive or
compensation plan of the Company or any Parent, Subsidiary or Affiliate of the Company;
(g) grant waivers of Plan or Award conditions;
(h) determine the vesting, exercisability and payment of Awards;
(i) correct any defect, supply any omission or reconcile any inconsistency in this Plan, any
Award or any Award Agreement;
(j) amend any Award Agreements executed in connection with this Plan;
(k) determine whether an Award has been earned; and
(l) make all other determinations necessary or advisable for the administration of this Plan.
4.2 Committee Discretion. Any determination made by the Committee with respect to any Award
will be made in its sole discretion at the time of grant of the Award or, unless in contravention
of any express term of this Plan or Award, at any later time, and such determination will be final
and binding on the Company and on all persons having an interest in any Award under this Plan. To
the extent permitted by applicable laws, the Committee may delegate to one or more officers of the
Company the authority to grant an Award under this Plan to Participants who are not Insiders of the
Company.
4.3 Section 162(m), Rule 16b-3 and Stock Exchange Requirements. If two or more members of the
Board are Outside Directors, the Committee will be comprised of at least two (2) members of the
Board, at least two (2) of whom are Outside Directors. To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3 promulgated under the Exchange Act (Rule
16b-3), Awards to officers and directors shall be made by the entire Board or a Committee of two
or more non-employee directors within the meaning of Rule 16b-3. In addition, the Plan will be
administered in a manner that complies with any applicable Nasdaq Global Select Market or stock
exchange listing requirements.
2
5. Options. The Committee may grant Options to eligible persons and will determine whether
such Options will be Incentive Stock Options within the meaning of the Code (ISOs) or
Nonqualified Stock Options (NQSOs),
the number of Shares subject to the Option, the Exercise Price of the Option (subject to Section
5.4 below), the circumstances upon and the period during which the Option may be exercised, and all
other terms and conditions of the Option, subject to the following:
5.1 Form of Option Grant. Each Option granted under this Plan will be evidenced by an Award
Agreement which will expressly identify the Option as an ISO or an NQSO (Stock Option Agreement),
and will be in such form and contain such provisions (which need not be the same for each
Participant) as the Committee may from time to time approve, and which will comply with and be
subject to the terms and conditions of this Plan. To the extent that any Option designated as an
ISO in the Award Agreement fails to qualify as such under applicable law, it shall be treated
instead as a NQSO.
5.2 Date of Grant. The date of grant of an Option will be the date on which the Committee
makes the determination to grant such Option, unless a later date is otherwise specified by the
Committee at the time it acts to approve the grant. The Stock Option Agreement and a copy of this
Plan will be delivered to the Participant within a reasonable time after the granting of the
Option.
5.3 Exercise Period. Options will be exercisable within the times or upon the events
determined by the Committee as set forth in the Stock Option Agreement governing such Option;
provided, however, that no Option will be exercisable after the expiration of ten (10) years from
the date the Option is granted; and provided further that no ISO granted to a person who directly
or by attribution owns more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or of any Parent or Subsidiary of the Company (Ten Percent
Stockholder) will be exercisable after the expiration of five (5) years from the date the ISO is
granted. The Committee also may provide for the exercise of Options to become exercisable at one
time or from time to time, periodically or otherwise (including, without limitation, the attainment
during a Performance Period of performance goals based on Performance Factors), in such number of
Shares or percentage of Shares as the Committee determines.
5.4 Exercise Price. The Exercise Price of an Option will be determined by the Committee when
the Option is granted and may not be less than 100% of the Fair Market Value of the Shares on the
date of grant; provided that the Exercise Price of any ISO granted to a Ten Percent Stockholder
will not be less than 110% of the Fair Market Value of the Shares on the date of grant. Payment for
the Shares purchased may be made in accordance with Section 10 of this Plan.
5.5 Method of Exercise. Options may be exercised only by delivery to the Company of a written
or electronic notice or agreement of stock option exercise (the Exercise Agreement") in a form
approved by the Committee (which need not be the same for each Participant), stating the number of
Shares being purchased, the restrictions imposed on the Shares purchased under such Exercise
Agreement, if any, and such representations and agreements regarding Participants investment
intent and access to information and other matters, if any, as may be required or desirable by the
Company to comply with applicable securities laws, together with payment in full of the Exercise
Price for the number of Shares being purchased and all applicable withholding taxes.
5.6 Termination. Notwithstanding the exercise periods set forth in the Stock Option Agreement,
exercise of an Option will always be subject to the following:
(a) If the Participant is Terminated for any reason except death or Disability, then the
Participant may exercise such Participants Options only to the extent that such Options are vested
and exercisable upon the Termination Date no later than three (3) months after the Termination Date
(or such shorter or longer time period not exceeding five (5) years as may be determined by the
Committee, with any exercise beyond three (3) months after the Termination Date deemed to be an
NQSO), but in any event, no later than the expiration date of the Options.
(b) If the Participant is Terminated because of Participants death or Disability (or the
Participant dies within three (3) months after a Termination other than because of Participants
death or disability), then Participants Options may be exercised only to the extent that such
Options are vested and exercisable by Participant on the Termination Date and must be exercised by
Participant (or Participants legal representative or authorized assignee) no later than twelve
(12) months after the Termination Date (or such shorter or longer time period not exceeding five
(5) years as may be determined by the Committee, with any such exercise beyond (a) three (3) months
after the
Termination Date when the Termination is for any reason other than the Participants death or
Disability, or (b) twelve (12) months after the Termination Date when the Termination is for
Participants death or Disability, deemed to be an NQSO), but in any event no later than the
expiration date of the Options.
3
5.7 Limitations on Exercise. The Committee may specify a reasonable minimum number of Shares
that may be purchased on any exercise of an Option, provided that such minimum number will not
prevent Participant from exercising the Option for the full number of Shares for which it is then
exercisable.
5.8 Limitations on ISOs. The aggregate Fair Market Value (determined as of the date of grant)
of Shares with respect to which ISOs are exercisable for the first time by a Participant during any
calendar year (under this Plan or under any other incentive stock option plan of the Company or any
Affiliate, Parent or Subsidiary of the Company) will not exceed $100,000. If the Fair Market Value
of Shares on the date of grant with respect to which ISOs are exercisable for the first time by a
Participant during any calendar year exceeds $100,000, then the Options for the first $100,000
worth of Shares to become exercisable in such calendar year will be ISOs and the Options for the
amount in excess of $100,000 that become exercisable in that calendar year will be NQSOs. In the
event that the Code or the regulations promulgated thereunder are amended after the Effective Date
of this Plan to provide for a different limit on the Fair Market Value of Shares permitted to be
subject to ISOs, such different limit will be automatically incorporated herein and will apply to
any Options granted after the effective date of such amendment.
5.9 Modification, Extension or Renewal. The Committee may modify, extend or renew outstanding
Options and authorize the grant of new Options in substitution therefor, provided that (a) any such
action may not, without the written consent of a Participant, impair any of such Participants
rights under any Option previously granted; (b) any outstanding ISO that is modified, extended,
renewed or otherwise altered will be treated in accordance with Section 424(h) of the Code; and (c)
notwithstanding anything to the contrary elsewhere in the Plan, the Company is subject to Section
21.2 below with respect to any proposal to reprice outstanding Options.
5.10 No Disqualification. Notwithstanding any other provision in this Plan, no term of this
Plan relating to ISOs will be interpreted, amended or altered, nor will any discretion or authority
granted under this Plan be exercised, so as to disqualify this Plan under Section 422 of the Code
or, without the consent of the Participant affected, to disqualify any ISO under Section 422 of the
Code.
6. Non-Employee Director Equity Awards. Each continuing non-employee director shall receive an
annual grant of RSUs having a Fair Market Value on the date of grant equal to $180,000, and such
RSUs shall be granted on the first business day following the Companys first regular Board meeting
of the Companys fiscal year. RSUs granted pursuant to this Section 6 on an annual basis vest on
the first anniversary following the date of grant, provided the non-employee director serves on the
Board on such vesting date, and shall be settled within 30 days of vesting by distribution of
Shares to the non-employee director. New non-employee directors shall be granted initial RSUs
having a Fair Market Value on the date of grant equal to $180,000 on the first business day
following such new non-employee directors election to the Board, with such amount prorated based
on the number of days from such non-employee directors election to the Board to, and including,
the Companys first regular Board meeting of the following fiscal year. RSUs granted to new
non-employee directors pursuant to the preceding sentence vest on the first anniversary of the
grant date, provided the non-employee director serves on the Board on such date, and shall be
settled within 30 days of vesting by distribution of Shares to the non-employee director.
7. Restricted Stock Awards. A Restricted Stock Award is an offer by the Company to issue to an
eligible person Shares that are subject to restrictions. The Committee will determine to whom an
offer will be made, the number of Shares the person may be issued or purchase, the Purchase Price
(if any), the restrictions to which the Shares will be subject, and all other terms and conditions
of the Restricted Stock Award, subject to the following:
7.1 Restricted Stock Agreement. All purchases under a Restricted Stock Award will be evidenced
by a written agreement (the Restricted Stock Agreement), which will be in substantially a form
(which need not be the same for each Participant) that the Committee shall from time to time
approve, and will comply with and be subject to the terms and conditions of the Plan. A
Participant can accept a Restricted Stock Award only by signing and delivering to the Company the
Restricted Stock Agreement, and full payment of the Purchase Price (if any) and all applicable
withholding taxes, at such time and on such terms as required by the Committee. If the Participant
does not accept
the Restricted Stock Award at such time and on such terms as required by the Committee, then the
offer of the Restricted Stock Award will terminate, unless the Committee determines otherwise.
4
7.2 Purchase Price. The Purchase Price (if any) for a Restricted Stock Award will be
determined by the Committee, and may be less than Fair Market Value on the date the Restricted
Stock Award is granted. Payment of the Purchase Price must be made in accordance with Section 10
of this Plan and as permitted in the Restricted Stock Agreement, and in accordance with any
procedures established by the Company.
7.3 Terms of Restricted Stock Awards. Restricted Stock Awards will be subject to all
restrictions, if any, that the Committee may impose. These restrictions may be based on completion
of a specified period of service with the Company and/or upon completion of the performance goals
as set out in advance in the Restricted Stock Agreement, which shall be in such form and contain
such provisions (which need not be the same for each Participant) as the Committee shall from time
to time approve, and which will comply with and be subject to the terms and conditions of this
Plan. Prior to the grant of a Restricted Stock Award, the Committee shall: (a) determine the
nature, length and starting date of any Performance Period for the Restricted Stock Award; (b)
select performance criteria, including if the Award is intended to qualify as performance-based
compensation under Code Section 162(m) from among the Performance Factors, to be used to measure
performance goals, if any; and (c) determine the number of Shares that may be awarded to the
Participant. For Restricted Stock Awards intended to comply with the requirements of Section
162(m) of the Code, the performance goals will be determined at a time when the achievement of the
performance goals remains substantially uncertain and shall otherwise be administered in a manner
that complies with the requirements under that statute. Performance Periods may overlap and a
Participant may participate simultaneously with respect to Restricted Stock Awards that are subject
to different Performance Periods and having different performance goals and other criteria.
7.4 Termination During Vesting or Performance Period. Restricted Stock Awards shall cease to
vest immediately if a Participant is Terminated during the vesting period or Performance Period
applicable to the Award for any reason, unless the Committee determines otherwise, and any unvested
Shares subject to such Restricted Stock Awards shall be subject to the Companys right to
repurchase such Shares or otherwise to any forfeiture condition applicable to the Award, as
described in Section 14 of this Plan, if and as set forth in the applicable Restricted Stock
Agreement.
8. Restricted Stock Units. A Restricted Stock Unit (or RSU) is an award covering a number of
Shares that may be settled in cash, or by issuance of those Shares (which may consist of Restricted
Stock). A RSU may be awarded for past services already rendered to the Company, or any Affiliate,
Parent or Subsidiary of the Company pursuant to an Award Agreement (the RSU Agreement) that will
be in such form (which need not be the same for each Participant) as the Committee will from time
to time approve, and will comply with and be subject to the following:
8.1 Terms of RSUs. RSUs may vary from Participant to Participant and between groups of
Participants, and may be based upon the achievement of the Company, Affiliate, Parent or Subsidiary
and/or individual performance factors or upon such other criteria as the Committee may determine.
The Committee will determine all terms of each RSU including, without limitation: the number of
Shares subject to each RSU, the time or times during which each RSU shall vest and the RSU be
settled, the consideration to be distributed on such settlement, and the effect on each RSU of its
holders Termination. A RSU may be awarded upon satisfaction of such performance goals as are set
out in advance in the Participants individual Award Agreement (the Performance RSU Agreement)
that will be in such form (which need not be the same for each Participant) as the Committee will
from time to time approve, and will comply with and be subject to the terms and conditions of this
Plan. If the RSU is being earned upon the satisfaction of performance goals pursuant to a
Performance RSU Agreement, then the Committee will: (a) determine the nature, length and starting
date of any Performance Period for each RSU; (b) select performance criteria, including if the
Award is intended to qualify as performance-based compensation under Code Section 162(m) from
among the Performance Factors, to be used to measure performance goals, if any; and (c) determine
the number of Shares deemed subject to the RSU. For RSUs intended to comply with the requirements
of Section 162(m) of the Code, the performance goals will be determined at a time when the
achievement of the performance goals remains substantially uncertain and shall otherwise be
administered in a manner that complies with the requirements under that statute. Prior to
settlement of any RSU earned upon the satisfaction of performance goals pursuant to a Performance
RSU Agreement, the Committee shall determine the extent to which such RSU has been earned.
Performance Periods may overlap and Participants may participate simultaneously with respect to
RSUs that
5
are subject to different Performance Periods and different performance goals and other criteria.
The number of Shares may be fixed or may vary in accordance with such performance goals and
criteria as may be determined by the Committee. The Committee may adjust the performance goals
applicable to the RSUs to take into account changes in law and accounting or tax rules and to make
such adjustments as the Committee deems necessary or appropriate to reflect the impact of
extraordinary or unusual items, events or circumstances to avoid windfalls or hardships.
8.2 Form and Timing of Exercise. The portion of a RSU being settled may be paid currently or
on a deferred basis with such interest or dividend equivalent, if any, as the Committee may
determine. Payment may be made in the form of cash or whole Shares or a combination thereof, either
in a lump sum payment or in installments, all as the Committee will determine.
9. Stock Appreciation Rights. A Stock Appreciation Right (or SAR) is an award that may be
exercised for cash or Shares (which may consist of Restricted Stock), having a value equal to the
value determined by multiplying the difference between the Fair Market Value on the date of
settlement over the Exercise Price and the number of Shares with respect to which the SAR is being
settled. A SAR may be awarded for past services already rendered to the Company, or any Parent or
Subsidiary of the Company pursuant to an Award Agreement (the SAR Agreement) that will be in such
form (which need not be the same for each Participant) as the Committee will from time to time
approve, and will comply with and be subject to the following:
9.1 Terms of SARs. SARs may vary from Participant to Participant and between groups of
Participants, and may be based upon the achievement of the Company, Parent or Subsidiary and/or
individual performance factors or upon such other criteria as the Committee may determine. The
Committee will determine all terms of each SAR including, without limitation: the number of Shares
deemed subject to each SAR, the time or times during which each SAR may be settled, the
consideration to be distributed on settlement, and the effect on each SAR of its holders
Termination. The Exercise Price of a SAR will be determined by the Committee when the SAR is
granted and may not be less than 100% of the Fair Market Value of the Shares on the date of grant.
A SAR may be awarded upon satisfaction of such performance goals as are set out in advance in the
Participants individual Award Agreement (the Performance SAR Agreement) that will be in such
form (which need not be the same for each Participant) as the Committee will from time to time
approve, and will comply with and be subject to the terms and conditions of this Plan. If the SAR
is being earned upon the satisfaction of performance goals pursuant to a Performance SAR Agreement,
then the Committee will: (a) determine the nature, length and starting date of any Performance
Period for each SAR; (b) select performance criteria, including if the Award is intended to qualify
as performance-based compensation under Code Section 162(m) from among the Performance Factors,
to be used to measure performance goals, if any; and (c) determine the number of Shares deemed
subject to the SAR. Prior to exercise of any SAR earned upon the satisfaction of performance goals
pursuant to a Performance SAR Agreement, the Committee shall determine the extent to which such SAR
has been earned. Performance Periods may overlap and Participants may participate simultaneously
with respect to SARs that are subject to different Performance Periods and different performance
goals and other criteria. The number of Shares may be fixed or may vary in accordance with such
performance goals and criteria as may be determined by the Committee. The Committee may adjust the
performance goals applicable to the SARs to take into account changes in law and accounting or tax
rules and to make such adjustments as the Committee deems necessary or appropriate to reflect the
impact of extraordinary or unusual items, events or circumstances to avoid windfalls or hardships.
Notwithstanding anything to the contrary elsewhere in the Plan, the Company is subject to Section
21.2 below with respect to any proposal to reprice outstanding SARs. The term of a SAR shall be
ten (10) years from the date the SAR is awarded or such shorter term as may be provided in the
Award Agreement.
9.2 Form and Timing of Settlement. The portion of a SAR being settled may be paid currently or
on a deferred basis with such interest or dividend equivalent, if any, as the Committee may
determine. Payment may be made in the form of cash or whole Shares or a combination thereof, either
in a lump sum payment or in installments, all as the Committee will determine.
6
10. Payment for Share Purchases. Payment for Shares purchased pursuant to this Plan may be
made in cash, by check or by wire transfer or, where expressly approved for the Participant by the
Committee and where permitted by law:
(a) by cancellation of indebtedness of the Company to the Participant;
(b) by surrender of shares that either: (1) have been owned by Participant for more than six
(6) months and have been paid for within the meaning of SEC Rule 144 (and, if such shares were
purchased from the Company by use of a promissory note, such note has been fully paid with respect
to such shares); or (2) were obtained by Participant in the public market;
(c) cashless net exercise arrangement pursuant to which the Company will reduce the number
of Shares issued upon exercise by the largest whole number of Shares having an aggregate Fair
Market Value that does not exceed the aggregate exercise price; provided that the Company shall
accept a cash or other payment from the Participant to the extent of any remaining balance of the
exercise price not satisfied by such reduction in the number of whole Shares to be issued;
(d) by waiver of compensation due or accrued to the Participant for services rendered;
(e) with respect only to purchases upon exercise of an Option, and provided that a public
market for the Companys stock exists, through a same day sale commitment from the Participant
and a broker-dealer that is a member of the National Association of Securities Dealers (an NASD
Dealer") whereby the Participant irrevocably elects to exercise the Option and to sell a portion of
the Shares so purchased to pay for the Exercise Price and any applicable withholding obligations,
and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to forward the Exercise
Price directly to the Company;
(f) by such other consideration and method of payment as permitted by the Committee and
applicable law; or
(g) by any combination of the foregoing.
11. Withholding Taxes.
11.1 Withholding Generally. It shall be a condition to the grant of an Award under this Plan
that the Participant satisfy any tax withholding or similar obligations applicable to the Award
that may be legally imposed upon the Participant. Whenever Awards are to be granted or Shares are
to be issued in satisfaction of Awards granted under this Plan, the Participant shall make such
arrangements as the Company may require to remit to the Company an amount sufficient to satisfy
federal, state, local, or foreign withholding tax requirements prior to the delivery of any Award
Agreement or certificate or certificates for Award Shares. Whenever, under this Plan, payments in
satisfaction of Awards are to be made in cash, such payment will be net of an amount sufficient to
satisfy federal, state, and local withholding tax requirements.
11.2 Stock Withholding. When, under applicable tax laws, a Participant incurs tax liability in
connection with the grant, exercise or vesting of any Award that is subject to tax withholding and
the Participant is obligated to pay the Company the amount required to be withheld, the Committee
may allow the Participant to satisfy the minimum withholding tax obligation by electing to have the
Company withhold from the Shares to be issued that number of Shares having a Fair Market Value
equal to the minimum amount required to be withheld, determined on the date that the amount of tax
to be withheld is to be determined (the Tax Date). All elections by a Participant to have Shares
withheld for this purpose will be made in writing in a form and during a period acceptable to the
Committee.
12. Privileges of Stock Ownership; Voting and Dividends. Except to the extent that the
Committee grants an RSU that entitles the Participant to credit for dividends paid on Award Shares
prior to the date such Shares are issued to the Participant (as reflected in the RSU Agreement), no
Participant will have any of the rights of a stockholder with respect to any Shares until the
Shares are issued to the Participant. After Shares are issued to the Participant, the Participant
will be a stockholder and have all the rights of a stockholder with respect to such Shares,
including the right to vote and receive all dividends or other distributions made or paid with
respect to such Shares; provided, that if such Shares are restricted stock, then any new,
additional or different securities the Participant may become entitled to receive with respect to
such Shares by virtue of a stock dividend, stock split or any other change in the corporate or
capital structure of the Company will be subject to the same restrictions as the restricted stock;
provided, further, that the Participant will have no right to retain such stock dividends or stock
distributions with
respect to Shares that are repurchased at the Participants original Purchase Price or otherwise
forfeited to the Company.
7
13. Transferability. Awards granted under this Plan, and any interest therein, will not be
transferable or assignable by Participant, and may not be made subject to execution, attachment or
similar process, otherwise than by will or by the laws of descent and distribution or as consistent
with the specific Plan and Award Agreement provisions relating thereto. All Awards shall be
exercisable: (i) during the Participants lifetime, only by (A) the Participant, or (B) the
Participants guardian or legal representative; and (ii) after Participants death, by the legal
representative of the Participants heirs or legatees.
14. Restrictions on Shares. At the discretion of the Committee, the Company may reserve to
itself and/or its assignee(s) in the Award Agreement a right to repurchase a portion of or all
Shares that are not vested held by a Participant following such Participants Termination at any
time specified after the Participants Termination Date, for cash and/or cancellation of purchase
money indebtedness, at the Participants original Exercise Price or Purchase Price, as the case may
be. Alternatively, at the discretion of the Committee, Award Shares issued to the Participant for
which the Participant did not pay any Exercise or Purchase Price may be forfeited to the Company on
such terms and conditions as may be specified in the Award Agreement. All certificates for Shares
or other securities delivered under this Plan will be subject to such stock transfer orders,
legends and other restrictions as the Committee may deem necessary or advisable, including
restrictions under any applicable federal, state or foreign securities law, or any rules,
regulations and other requirements of the SEC or any stock exchange or automated quotation system
upon which the Shares may be listed or quoted.
15. Escrow; Pledge of Shares. To enforce any restrictions on a Participants Shares, the
Committee may require the Participant to deposit all certificates representing Shares, together
with stock powers or other instruments of transfer approved by the Committee, appropriately
endorsed in blank, with the Company or an agent designated by the Company to hold in escrow until
such restrictions have lapsed or terminated, and the Committee may cause a legend or legends
referencing such restrictions to be placed on the certificates.
16. Exchange and Buyout of Awards. The Committee may, at any time or from time to time,
authorize the Company, with the consent of the respective Participants, to issue new Awards in
exchange for the surrender and cancellation of any or all outstanding Awards. This Section shall
not be construed to defeat the requirements of Section 21.2 with respect to any proposed repricing
of Options or SARs.
17. Securities Law and Other Regulatory Compliance. An Award will not be effective unless such
Award is in compliance with all applicable federal and state securities laws, rules and regulations
of any governmental body, and the requirements of any stock exchange or automated quotation system
upon which the Shares may then be listed or quoted, as they are in effect on the date of grant of
the Award and also on the date of exercise or other issuance. Notwithstanding any other provision
in this Plan, the Company will have no obligation, and no liability for failure, to issue Shares or
deliver certificates for Shares under this Plan prior to: (a) obtaining any approvals from
governmental agencies that the Company determines are necessary or advisable; and/or (b) completion
of any registration or other qualification of such Shares under any state or federal law or ruling
of any governmental body that the Company determines to be necessary or advisable. The Company will
be under no obligation to register the Shares with the SEC or to effect compliance with the
registration, qualification or listing requirements of any state securities laws, stock exchange or
automated quotation system, and the Company will have no liability for any inability or failure to
do so.
18. Corporate Transactions.
18.1 Assumption or Replacement of Awards by Successor. In the event of (a) a dissolution or
liquidation of the Company, (b) a merger or consolidation in which the Company is not the surviving
corporation (other than a merger or consolidation with a wholly-owned subsidiary, a reincorporation
of the Company in a different jurisdiction, or other transaction in which there is no substantial
change in the stockholders of the Company or their relative stock holdings and the Awards granted
under this Plan are assumed, converted or replaced by the successor corporation, which assumption
will be binding on all Participants), (c) a merger in which the Company is the surviving
corporation but after which the stockholders of the Company (other than any stockholder which
merges (or which owns or controls another corporation which merges) with the Company in such
merger) cease to own their shares or
8
other equity interests in the Company, (d) the sale of substantially all of the assets of the
Company, or (e) any other transaction which qualifies as a corporate transaction under Section
424(a) of the Code wherein the stockholders of the Company give up all of their equity interest in
the Company (except for the acquisition, sale or transfer of all or substantially all of the
outstanding shares of the Company from or by the stockholders of the Company), any or all
outstanding Awards may be assumed, converted or replaced by the successor corporation (if any),
which assumption, conversion or replacement will be binding on all Participants, or the successor
corporation may substitute equivalent awards or provide substantially similar consideration to
Participants as was provided to stockholders (after taking into account the existing provisions of
the Awards); provided that all formula Restricted Stock Unit grants, pursuant to Section 6 shall
accelerate and be fully vested upon such merger, consolidation or
corporate transaction. In the event such successor corporation (if any) fails to assume or
substitute Awards pursuant to a transaction described in this Subsection 18.1, all such Awards will
expire on such transaction at such time and on such conditions as the Board shall determine.
18.2 Other Treatment of Awards. Subject to any greater rights granted to Participants under
the foregoing provisions of this Section 18, in the event of the occurrence of any transaction
described in Section 18.1, any outstanding Awards will be treated as provided in the applicable
agreement or plan of merger, consolidation, dissolution, liquidation, sale of assets or other
corporate transaction.
18.3 Assumption of Awards by the Company. The Company, from time to time, also may substitute
or assume outstanding awards granted by another company, whether in connection with an acquisition
of such other company or otherwise, by either; (a) granting an Award under this Plan in
substitution of such other companys award; or (b) assuming such award as if it had been granted
under this Plan if the terms of such assumed award could be applied to an Award granted under this
Plan. Such substitution or assumption will be permissible if the holder of the substituted or
assumed award would have been eligible to be granted an Award under this Plan if the other company
had applied the rules of this Plan to such grant. In the event the Company assumes an award granted
by another company, the terms and conditions of such award will remain unchanged (except that the
exercise price and the number and nature of Shares issuable upon exercise of any such option will
be adjusted appropriately pursuant to Section 424(a) of the Code). In the event the Company elects
to grant a new Option rather than assuming an existing option, such new Option may be granted with
a similarly adjusted Exercise Price.
19. No Obligation to Employ; Accelerated Expiration of Award for Harmful Act. Nothing in this
Plan or any Award granted under this Plan will confer or be deemed to confer on any Participant any
right to continue in the employ of, or to continue any other relationship with, the Company or any
Parent, Subsidiary or Affiliate of the Company or limit in any way the right of the Company or any
Parent, Subsidiary or Affiliate of the Company to terminate Participants employment or other
relationship at any time, with or without cause. Notwithstanding anything to the contrary herein,
if a Participant is Terminated because of such Participants actual or alleged commitment of a
criminal act or an intentional tort and the Company (or an employee of the Company) is the victim
or object of such criminal act or intentional tort or such criminal act or intentional tort
results, in the reasonable opinion of the Company, in liability, loss, damage or injury to the
Company, then, at the Companys election, Participants Awards shall not be exercisable or
settleable and shall terminate and expire upon the Participants Termination Date. Termination by
the Company based on a Participants alleged commitment of a criminal act or an intentional tort
shall be based on a reasonable investigation of the facts and a determination by the Company that a
preponderance of the evidence discovered in such investigation indicates that such Participant is
guilty of such criminal act or intentional tort.
20. Compliance with Section 409A. Notwithstanding anything to the contrary contained herein,
to the extent that the Committee determines that any Award granted under the Plan is subject to
Code Section 409A and unless otherwise specified in the applicable Award Agreement, the Award
Agreement evidencing such Award shall incorporate the terms and conditions necessary for such Award
to avoid the consequences described in Code Section 409A(a)(1), and to the maximum extent permitted
under applicable law (and unless otherwise stated in the applicable Award Agreement), the Plan and
the Award Agreements shall be interpreted in a manner that results in their conforming to the
requirements of Code Section 409A(a)(2), (3) and (4) and any Department of Treasury or Internal
Revenue Service regulations or other interpretive guidance issued under Section 409A (whenever
issued, the Guidance). Notwithstanding anything to the contrary in this Plan (and unless the
Award Agreement provides otherwise, with specific reference to this sentence), to the extent that a
Participant holding an Award that constitutes deferred compensation under Section 409A and the
Guidance is a specified employee at the time of his or her
separation from service (as each is defined under Section 409A and applicable Guidance), no
distribution or payment of any amount shall be made before a date that is six (6) months following
the date of such Participants separation from service or, if earlier, the date of the
Participants death within such six (6) month period.
9
21. Certain Stockholder Approval Matters.
21.1 Plan Effectiveness; Increasing Plan Shares. This Plan became effective on July 20, 2004
(the Effective Date) and the amendment and
restatement of this Plan became effective on ______ ___,
2008. Any amendment to this Plan increasing the number of Shares available for issuance hereunder
shall be approved by the stockholders of the Company, consistent with applicable laws, within
twelve (12) months before or after the effective date of such amendment (Amendment Effective
Date). Upon the Amendment Effective Date, the Board may grant Awards covering such additional
Shares pursuant to this Plan; provided, however, that: (a) no Option granted pursuant to such
increase in the number of Shares subject to this Plan approved by the Board may be exercised prior
to the time such increase has been approved by the stockholders of the Company; and (b) in the
event that stockholder approval of any such amendment increasing the number of Shares subject to
this Plan is not obtained, all Awards covering such additional Shares granted hereunder will be
canceled, any Shares issued pursuant to any Award will be canceled, and any purchase of Shares
hereunder will be rescinded.
21.2 Repricing Matters. Except in connection with a corporate transaction involving the
Company (including without limitation any stock dividend, recapitalization, stock split, reverse
stock split, subdivision, combination, reclassification, reorganization, merger, consolidation,
split-up, spin-off or exchange of shares), the terms of outstanding Awards may not without
stockholder approval be amended to reduce the exercise price of outstanding Options or SARs, or to
cancel outstanding Options or SARs in exchange either for (a) cash, or (b) new Options, SARS or
other Awards with an exercise price that is less than the exercise price of the original
(cancelled) Options or SARs.
22. Term of Plan. Unless earlier terminated as provided herein, this Plan will terminate on
July 20, 2014.
23. Amendment or Termination of Plan. The Board may at any time terminate or amend this Plan
in any respect, including without limitation amendment of Section 6 of this Plan; provided,
however, that the Board will not, without the approval of the stockholders of the Company, amend
this Plan to increase the number of shares that may be issued under this Plan, change the
designation of employees or class of employees eligible for participation in this Plan, take any
action in conflict with Section 21.2 above, or otherwise materially modify a provision of the Plan
if such modification requires stockholder approval under Nasdaq rules.
24. Nonexclusivity of the Plan. Neither the adoption of this Plan by the Board, the submission
of this Plan to the stockholders of the Company for approval, nor any provision of this Plan will
be construed as creating any limitations on the power of the Board to adopt such additional
compensation arrangements as it may deem desirable, including, without limitation, the granting of
stock options and bonuses otherwise than under this Plan, and such arrangements may be either
generally applicable or applicable only in specific cases.
25. Definitions. As used in this Plan, the following terms will have the following meanings:
Affiliate means any corporation that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with, another corporation,
where control (including the terms controlled by and under common control with) means the
possession, direct or indirect, of the power to cause the direction of the management and policies
of the corporation, whether through the ownership of voting securities, by contract or otherwise.
Award means any award under this Plan, including any Option, Stock Appreciation Right,
Restricted Stock Unit, or Restricted Stock Award.
Award Agreement means, with respect to each Award, the signed written agreement between the
Company and the Participant setting forth the terms and conditions of the Award.
10
Board means the Board of Directors of the Company.
Code means the Internal Revenue Code of 1986, as amended.
Committee means the committee appointed by the Board to administer this Plan, or if no such
committee is appointed, the Board.
Company means Symantec Corporation, a corporation organized under the laws of the State of
Delaware, or any successor corporation.
Disability means a disability, whether temporary or permanent, partial or total, within the
meaning of Section 22(e)(3) of the Code, as determined by the Committee.
Exchange Act means the Securities Exchange Act of 1934, as amended.
Exercise Price means the price at which a holder of an Option may purchase the Shares
issuable upon exercise of the Option, and in the case of a Stock Appreciation Right the value
specified on the date of grant that is subtracted from the Fair Market Value when such Stock
Appreciation Right is settled.
Fair Market Value means, as of any date, the value of a share of the Companys Common Stock
determined as follows:
(a) if such Common Stock is then quoted on the Nasdaq Global Select Market, the Nasdaq Global
Market or the Nasdaq Capital Market (collectively, the Nasdaq Market), its closing price on the
Nasdaq Market on the date of determination as reported in The Wall Street Journal;
(b) if such Common Stock is publicly traded and is then listed on a national securities
exchange, its closing price on the date of determination on the principal national securities
exchange on which the Common Stock is listed or admitted to trading as reported in The Wall Street
Journal;
(c) if such Common Stock is publicly traded but is not quoted on the Nasdaq Market nor listed
or admitted to trading on a national securities exchange, the average of the closing bid and asked
prices on the date of determination as reported in The Wall Street Journal; or
(d) if none of the foregoing is applicable, by the Committee in good faith.
Insider means an officer or director of the Company or any other person whose transactions
in the Companys Common Stock are subject to Section 16 of the Exchange Act.
Outside Director shall mean a person who satisfies the requirements of an outside director
as set forth in regulations promulgated under Section 162(m) of the Code.
Option means an award of an option to purchase Shares pursuant to Section 5.
Parent means any corporation (other than the Company) in an unbroken chain of corporations
ending with the Company, if at the time of the granting of an Award under this Plan, each of such
corporations other than the Company owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.
Participant means a person who receives an Award under this Plan.
Performance Factors means the factors selected by the Committee from among the following
measures to determine whether the performance goals established by the Committee and applicable to
Awards have been satisfied:
11
(1) Net revenue and/or net revenue growth;
(2) Earnings before income taxes and amortization and/or earnings before income taxes and
amortization growth;
(3) Operating income and/or operating income growth;
(4) Net income and/or net income growth;
(5) Earnings per share and/or earnings per share growth;
(6) Total stockholder return and/or total stockholder return growth;
(7) Return on equity;
(8) Operating cash flow return on income;
(9) Adjusted operating cash flow return on income;
(10) Economic value added; and
(11) Individual business goals or criteria that can be objectively specified in a manner that
complies with Section 162(m).
Performance Period means the period of service determined by the Committee, not to exceed
five years, during which years of service or performance is to be measured for Restricted Stock
Awards.
Plan means this Symantec Corporation 2004 Equity Incentive Plan, as amended from time to
time.
Purchase Price means the price to be paid for Shares acquired under this Plan pursuant to an
Award other than an Option.
Restricted Stock Award means an award of Shares pursuant to Section 7.
Restricted Stock Unit or RSU means an award of Shares pursuant to Section 8.
Securities Act means the Securities Act of 1933, as amended.
Shares means shares of the Companys Common Stock reserved for issuance under this Plan, as
adjusted pursuant to Sections 2 and 18, and any successor security.
Stock Appreciation Right or SAR means an Award, granted pursuant to Section 9.
Subsidiary means any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if, at the time of granting of the Award, each of the
corporations other than the last corporation in the unbroken chain owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the other corporations in
such chain.
Termination or Terminated means, for purposes of this Plan with respect to a Participant,
that the Participant has for any reason ceased to provide services as an employee, director,
consultant, independent contractor or advisor to the Company or a Parent, Subsidiary or Affiliate
of the Company, except in the case of sick leave, military leave, or any other leave of absence
approved by the Committee, provided that such leave is for a period of not more than ninety (90)
days, or reinstatement upon the expiration of such leave is guaranteed by contract or statute. The
Committee will have sole discretion to determine whether a Participant has ceased to provide
services and the effective date on which the Participant ceased to provide services (the
Termination Date).
12
SYMANTEC CORPORATION
2008 EMPLOYEE STOCK PURCHASE PLAN
Effective Date of Plan:
1. ESTABLISHMENT AND PURPOSE OF PLAN
(a) Symantec Corporation, a Delaware corporation (the Company) adopted this 2008 Employee
Stock Purchase Plan (the Plan) to grant options for the purchase of shares (Shares) of the
Companys Common Stock (Common Stock) to eligible employees of the Company, its parent
corporation, and its Affiliates and Subsidiaries. For purposes of the Plan, parent corporation
and Subsidiary (collectively, Subsidiaries) shall have the same meanings as parent
corporation and subsidiary corporation in Sections 424(e) and (f), respectively, of the Internal
Revenue Code of 1986, as amended (the Code), and Affiliate shall mean any entity, other than a
Subsidiary, in which the Company has an equity or other ownership interest. Any term not expressly
defined in the Plan but defined for purposes of Section 423 of the Code shall have the same
definition in this Plan for purposes of the Statutory Plan (defined below).
(b) The purpose of the Plan is to provide employees of the Company and certain Affiliates and
Subsidiaries designated (any such designated Affiliate or Subsidiary, a Designated Corporation)
by the Board of Directors of the Company (the Board) whose employees are eligible to participate
in the Plan with a convenient means to acquire at a discount to market value an equity interest in
the Company through payroll deductions, to enhance such employees sense of participation in the
affairs of the Company and its Affiliates and Subsidiaries, and to provide an incentive for
continued employment.
2. STRUCTURE OF THE PLAN AND SUB-PLANS
(a) This Plan document is an omnibus document which includes a sub-plan (the Statutory Plan)
designed to permit offerings of grants to employees of the Company and certain Subsidiaries that
are Designated Corporations (defined below) where such offerings are intended to satisfy the
requirements of Section 423 of the Code (although the Company makes no undertaking nor
representation to obtain or maintain qualification under Section 423 for any Subsidiary,
individual, offering or grant) and also separate sub-plans (each a Non-Statutory Plan) which
permit offerings of grants to employees of certain Designated Corporations that are not intended to
satisfy the requirements of Section 423 of the Code.
(b) A total of 20,000,000 Shares may be issued under the Plan. Such number shall be subject to
adjustments effected in accordance with Section 14 of the Plan.
(c) The Statutory Plan shall be a separate and independent plan from the Non-Statutory Plans,
provided, however, that the total number of shares authorized to be issued under the Plan applies
in the aggregate to both the Statutory Plan and the Non-Statutory Plans. Offerings under the
Non-Statutory Plans may be made to achieve desired tax or other objectives in particular locations
outside the United States of America or to comply with local laws applicable to offerings in such
foreign jurisdictions.
(d) The terms of the Statutory Plan shall be those set forth in this Plan document to the
extent such terms are consistent with the requirements for qualification under Code Section 423.
The Board may adopt Non-Statutory Plans applicable to particular Designated Corporations or
locations that are not participating in the Statutory Plan, which shall be designed to achieve tax,
securities law or other Company compliance objectives in particular locations outside the United
States. The terms of each Non-Statutory Plan may take precedence over other provisions in this
document, with the exception of Section 2(b) of the Plan with respect to the total number of shares
available to be offered under the Plan for all sub-plans. Unless otherwise superseded by the terms
of such Non-Statutory Plan, the provisions of this Plan document shall govern the operation of such
Non-Statutory Plan. Except to the extent expressly set forth herein or where the context suggests
otherwise, any reference herein to Plan shall be construed to include a reference to the
Statutory Plan and any Non-Statutory Plans.
3. ADMINISTRATION
(a) The Plan is administered by the Board or by a committee designated by the Board (in which
event all references herein to the Board shall be to the committee). Members of the Board shall
receive no compensation for their services in connection with the administration of the Plan, other
than standard fees as established from time to time by the Board for services rendered by Board
members serving on Board committees. All expenses incurred in connection with the administration of
the Plan shall be paid by the Company.
(b) The Board (or the committee) shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:
(i) To determine when and how options to purchase Shares shall be granted and the provisions
of each Offering Period (which need not be identical).
(ii) To designate from time to time an Affiliate or Subsidiary as a Designated Corporation
whose employees shall be eligible to participate in the Statutory Plan or a Non-Statutory Plan.
For purposes of participation in the Statutory Plan, only Subsidiaries shall be considered
Designated Corporations, and the Board shall designate from time to time which Subsidiaries will be
Designated Corporations in the Statutory Plan. The Board shall designate from time to time which
Subsidiaries and Affiliates shall be Designated Corporations in particular Non-Statutory Plans,
provided, however, that at any given time, a Subsidiary that is a Designated Corporation in the
Statutory Plan shall not be a Designated Corporation in a Non-Statutory Plan. The foregoing
designations and changes in designations by the Board from time to time shall not require
stockholder approval.
(iii) To determine from time to time the method for allocating the number of total shares to
be offered under each sub-plan, which determination shall not require stockholder approval.
(iv) To construe and interpret the Plan and rights to purchase (options on) Shares, and to
establish, amend and revoke rules and procedures for its administration. The Board, in the exercise
of this power, may correct any defect, omission or inconsistency in the Plan, in a manner and to
the extent it shall deem necessary or expedient to make the Plan fully effective.
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(v) To amend or terminate the Plan as provided in Section 24 below.
(vi) To adopt rules and procedures and/or special provisions relating to the operation and
administration of the Statutory Plan (subject to the limitations of Section 423 of the Code or any
successor provision in the Code) and any Non-Statutory Plan, as appropriate, to permit or
facilitate participation in the Statutory Plan or a particular Non-Statutory Plan by employees who
are foreign nationals or employed or resident outside the United States or as designed to achieve
tax, securities law or other Company compliance objectives in particular locations outside the
United States.
(vii) Generally, to exercise such powers and to perform such acts it deems necessary,
desirable, convenient or expedient to promote the best interests of the Company and its
Subsidiaries and to carry out that intent that the Statutory Plan be treated as an employee stock
purchase plan under Section 423 of the Code.
(c) Subject to the limitations of Section 423 of the Code or any successor provision in the
Code with respect to the Statutory Plan, all questions of interpretation or application of the Plan
shall be determined by the Board and its decisions shall be final and binding upon all persons.
4. ELIGIBILITY
Any employee of the Company or any Designated Corporation is eligible to participate in an
Offering Period (as hereinafter defined) under the Plan except the following unless otherwise
required under applicable local law:
(a) employees who are not employed by the Company or a Designated Corporation on the third
(3rd) business day before the beginning of such Offering Period;
(b) employees who are customarily employed for less than 20 hours per week;
(c) employees who are customarily employed for less than 5 months in a calendar year;
(d) employees who, together with any other person whose stock would be attributed to such
employee pursuant to Section 425(d) of the Code, own stock or hold options to purchase stock or
who, as a result of being granted an option under the Plan with respect to such Offering Period,
would own stock or hold options to purchase stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Company or any of its Subsidiaries;
and
(e) individuals who provide services to the Company or any Designated Corporation as
independent contractors who are reclassified as common law employees for any reason except for
federal income and employment tax purposes.
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5. OFFERING PERIODS; OFFERING DATES; AND PURCHASE DATES
(a) Each Offering Period under the Plan (each an Offering Period) shall be of the duration
provided for or permitted herein. The first trading day (day on which the exchange or system on
which the Common Stock is trading is open) of each Offering Period is referred to as the Offering
Date. The Board may but need not provide for multiple purchases within a single Offering Period.
The Board shall have the power to change the duration of Offering Periods without stockholder
approval. The last trading day of each Offering Period (or in the case of an Offering Period
encompassing multiple purchases, each such purchase period) is hereinafter referred to as the
Purchase Date.
(b) Subject to Section 5(c) below, each Offering Period shall be of six (6) months duration
commencing February 16 and August 16 of each year beginning February 16, 2009, and ending no later
than the next August 15 and February 15, respectively, thereafter, and shall have a single Purchase
Date (which shall occur on the last trading day of the Offering Period).
(c) Notwithstanding 5(b) above and the other provisions of the Plan, the Board of Directors
may, but need not, vary the terms and structure of the Offering Periods under this Plan, on such
basis as it shall determine in its sole discretion (including without limitation, the length of
each Offering Period, Offering Periods during which more than one Purchase Date shall occur, and
the formula(s) for calculating the price(s) at which Shares may be purchased during such Offering
Period including a formula under which such price is calculated with reference to the fair market
value (as provided for in Section 8 below) of the Common Stock as of the Offering Date for the
Offering Period); provided, however, that no Offering Period under the Plan shall have a duration
in excess of twenty-seven (27) months (or such period as may be permitted under Code Section 423).
6. PARTICIPATION IN THE PLAN
An eligible employee may become a participant in an Offering Period under the Plan if (a) as
of the Offering Date with respect to the Offering Period he or she satisfies the eligibility
requirements set forth above, and (b) not later than the third (3rd) business day prior
to such Offering Date (at such time and in such manner as may be specified with respect to such
Offering Period) he or she delivers to the Company or its authorized representative a subscription
agreement indicating his or her desire to enroll in the Offering Period and authorizing payroll
deductions in a manner consistent with Section 9 below. An eligible employee who does not timely
deliver a subscription agreement by the date specified in advance of the applicable Offering Date
shall not participate in that Offering Period and shall not participate in any subsequent Offering
Period unless such employee enrolls in the Plan by timely delivering a subscription agreement to
the Company or its representative prior the Offering Date of the applicable, subsequent Offering
Period. Once an employee becomes a participant in an Offering Period, such employee will
automatically participate in the Offering Period commencing immediately following the last day of
that Offering Period unless the employee withdraws from the Plan or terminates further
participation in the Offering Period as set forth in Section 11 below. Such participant is not
required to file any additional subscription agreements in order to continue participation in the
Plan with respect to subsequent Offering Periods. Any participant who has not withdrawn from the
Plan pursuant to Section 11 below will automatically be re-enrolled in the Plan and granted a new
option on the Offering Date of the next Offering Period.
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7. GRANT OF OPTION
(a) Each employee enrolled in an Offering Period will be granted on the Offering Date an
option to purchase on each Purchase Date for a particular Offering Period up to that number of
Shares determined by dividing the amount accumulated in such employees payroll deduction account
during such Offering Period by the Purchase Price applicable to that Offering Period (as defined in
Section 8 below).
(b) In no event, however, shall the number of Shares subject to any option granted pursuant to
this Plan exceed the limitations set forth in Section 10 below. The purchase price and fair market
value of a Share shall be determined as provided in Section 8 below.
8. PURCHASE PRICE
(a) Unless otherwise determined by the Board in its discretion, the purchase price per Share
at which a Share of Common Stock will be sold in any Offering Period (the Purchase Price) shall
be eighty-five percent (85%) of the fair market value on the applicable Purchase Date. The fair
market value of a Share shall be as determined in good faith by the Board. If the Common Stock is
listed on a national or regional securities exchange or market system, including without limitation
the Nasdaq Stock Market, the fair market value of a Share shall be the closing sales price for such
stock, as quoted on such exchange or market constituting the primary market for the Common Stock on
the date of determination, as reported in The Wall Street Journal or such other source as the Board
deems reliable. If the relevant date does not fall on a day on which the Common 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 Common Stock was so traded prior to the relevant
date, or such other appropriate day as shall be determined by the Board, in its discretion.
(b) The Board may in its discretion, and without stockholder approval, change the Purchase
Price from the formula set forth above, provided that the Purchase Price may not be less than the
lesser of (a) eighty-five percent (85%) of the Offering Date fair market value of a Share and (b)
eighty-five percent (85%) of the Purchase Date fair market value of a Share.
9. PAYMENT OF PURCHASE PRICE; PAYROLL DEDUCTIONS; ISSUANCE OF SHARES
(a) The aggregate purchase price of the Shares is accumulated by regular payroll deductions
made during each Offering Period, unless payroll deductions are not permitted under a statute,
regulation, rule of a jurisdiction, in which case such other payments as may be approved by the
Board (or committee) subject to this Section 9. The deductions are made as a percentage of the
employees compensation in one percent (1%) increments not less than two percent (2%) nor greater
than ten percent (10%). For purposes of the Statutory Plan, compensation shall mean all
compensation, including, but not limited to base salary, wages, commissions, overtime, shift
premiums and bonuses, plus draws against commissions, but excluding amounts related to Company
equity compensation; provided, however, that for
5
purposes of determining a participants
compensation, any election by such participant to reduce his or her regular cash remuneration under
Sections 125 or 401(k) of the Code shall be treated as if the participant did not make such
election. For purposes of any Non-Statutory Plan, compensation shall mean base salary. Payroll
deductions shall commence on the first payroll date following the Offering Date and shall continue
until the payroll date immediately preceding the Purchase Date unless sooner altered or terminated
as provided in the Plan.
(b) A participant may lower (but not increase) the rate of payroll deductions during an
Offering Period by filing with the Companys designated stock plan administrator (the
Administrator) (which may also be the ESPP Broker, as defined below) a new authorization for
payroll deductions, in which case the new rate shall become effective for the next payroll period
commencing more than thirty (30) days after the Administrators receipt of the authorization and
shall continue for the remainder of the Offering Period unless changed as described below. Such
change in the rate of payroll deductions may be made at any time during an Offering Period, but not
more than one (1) change may be made effective during any Offering Period. A participant may
increase or lower the rate of payroll deductions for any subsequent Offering Period by filing with
the Administrator a new authorization for payroll deductions during the open enrollment period
beginning on the first (1st) day of the month and ending three business days before the
Offering Date.
(c) All payroll deductions made for a participant are credited to his or her account under the
Plan and are deposited with the general funds of the Company. No interest accrues on the payroll
deductions (unless required by applicable local law). All payroll deductions received or held by
the Company may be used by the Company for any corporate purpose, and the Company shall not be
obligated to segregate such payroll deductions (unless required by applicable local law).
(d) On each Purchase Date, so long as the Plan remains in effect and provided that the
participant has not withdrawn from the Plan in accordance with the provisions of Section 11 of the
Plan before that date, the Company shall apply the funds then in the participants account to the
purchase of whole Shares reserved under the option granted to such participant with respect to the
Offering Period to the extent that such option is exercisable on the Purchase Date. The Purchase
Price per Share shall be as specified in Section 8 of the Plan. Any cash remaining in a
participants account after such purchase of Shares shall be refunded to such participant in cash
(without interest); provided, however, that any amount remaining in such participants account on a
Purchase Date which is less than the amount necessary to purchase a full Share of the Company shall
be carried forward, without interest, into the next Offering Period (or in the event of an Offering
Period during which multiple purchase will occur, into the next applicable purchase period within
the Offering Period). In the event that the Plan has been oversubscribed as provided in Section
10(c), all funds not used to purchase Shares on the Purchase Date shall be returned to the
participant (without interest, unless otherwise required by applicable local law). No Shares shall
be purchased on a Purchase Date on behalf of any employee whose participation in the Plan has
terminated prior to such Purchase Date.
(e) As promptly as practicable after the Purchase Date, the number of Shares purchased by each
participant upon exercise of each participants option shall be deposited into an account
established in the participants name at the stock brokerage or other third party
6
service provider
designated by the Company (the ESPP Broker), as nominee holding the Shares for the benefit of the
participant. In the event participant requests the receipt of certificated shares, the Company
shall arrange the delivery to such participant of a certificate representing the Shares purchased
on the Purchase Date; provided that the Board may deliver certificates to a broker or brokers that
hold such certificate in street name for the benefit of each such participant.
(f) During a participants lifetime, such participants option to purchase Shares hereunder is
exercisable only by him or her. The participant will have no interest or voting right in Shares
covered by his or her option until such option has been exercised. Shares to be delivered to a
participant under the Plan will be registered in the name of the participant or in the name of the
participant and his or her spouse or in the name of the ESPP Broker, as nominee holding the Shares
for the benefit of the participant.
10. LIMITATIONS ON SHARES TO BE PURCHASED
(a) No employee shall be entitled to purchase Shares under the Plan at a rate which, when
aggregated with his or her rights to purchase Shares of Common Stock under all other employee stock
purchase plans of the Company or any Subsidiary, exceeds $25,000 in fair market value, determined
as of the date such right is granted (or such other limit as may be imposed by the Code) for each
calendar year in which the employee participates in the Plan.
(b) Subject to Sections 9(a), 10(a) and 14(a) of the Plan, the maximum number of Shares that a
participant may purchase on any single Purchase Date shall not exceed 10,000 Shares (the Maximum
Share Amount); provided that prior to the commencement of any Offering Period, the Board may, in
its sole discretion and without stockholder approval, change the Maximum Share Amount with respect
to that Offering Period. If a new Maximum Share Amount is set, then all participants must be
notified of such Maximum Share Amount prior to the commencement of the next Offering Period. Once
a Maximum Share Amount is set, it shall continue to apply in respect of all succeeding Purchase
Dates and Offering Periods unless revised by the Board as set forth above.
(c) If a participant is precluded by the limitations of Sections 10(a) or 10(b) from
purchasing additional Shares under the Plan, then his or her payroll deductions shall automatically
be discontinued and shall resume at the beginning of the next Offering Period (or in the event of
an Offering Period during which multiple purchase will occur, into the next applicable purchase
period within the Offering Period) in which such participant is eligible to participate.
(d) If the number of Shares to be purchased on a Purchase Date by all employees participating
in the Plan exceeds the number of Shares then available for issuance under the Plan, the Company
will make a pro rata allocation of the remaining Shares in as uniform a manner as shall be
practicable and as the Board shall determine to be equitable. In such event, the Company shall give
written notice of such reduction of the number of Shares to be purchased under a participants
option to each employee affected thereby. Any payroll deductions accumulated in such participants
account which are not used to purchase Shares due to the limitations in this Section 10(d) shall be
returned to the participant (without interest, unless required by applicable local law) as soon as
practicable after the end of the Offering Period.
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11. WITHDRAWAL
(a) Each participant may withdraw from an Offering Period under the Plan by signing and
delivering to the Administrator notice on a form provided for such purpose. Such withdrawal may be
elected at any time at least fifteen (15) days prior to the end of an Offering Period, or such
shorter period of time as may be required in certain jurisdictions outside the United States as
determined by the Board.
(b) Upon withdrawal from the Plan, the accumulated payroll deductions shall be returned to the
withdrawn employee (without interest, unless required by applicable local law) and his or her
interest in the Plan shall terminate. In the event an employee voluntarily elects to withdraw from
the Plan, he or she may not resume his or her participation in the Plan during the same Offering
Period, but he or she may participate in any Offering Period under the Plan which commences on a
date subsequent to such withdrawal by filing a new authorization for payroll deductions in the same
manner as set forth in Section 6 above for initial participation in the Plan.
12. TERMINATION OF EMPLOYMENT
Termination of a participants employment for any reason, including retirement or death or the
failure of a participant to remain an eligible employee as set forth in Section 4, terminates his
or her participation in the Plan immediately. In such event, the payroll deductions credited to
the participants account will be returned to him or her or, in the case of his or her death, to
his or her legal representative. For this purpose, an employee will not be deemed to have
terminated employment or failed to remain in the continuous employ of the Company in the case of
sick leave, military leave, or any other leave of absence approved by the Board of Directors of the
Company; provided that such leave is for a period of not more than ninety (90) days or, if such
leave is longer than ninety (90) days, reemployment upon the expiration of such leave is guaranteed
by contract or statute.
13. RETURN OF PAYROLL DEDUCTIONS
In the event an employees interest in the Plan is terminated by withdrawal, termination of
employment or otherwise, or in the event the Plan is terminated by the Board, the Company shall
promptly deliver to the employee all payroll deductions credited to his or her account. Unless
otherwise required by applicable local law, no interest shall accrue on the payroll deductions of a
participant in the Plan.
14. ADJUSTMENTS UPON CAPITAL CHANGES; CORPORATE TRANSACTIONS
(a) Subject to any required action by the stockholders of the Company, the number of Shares
covered by each option under the Plan which has not yet been exercised, the Maximum Share Amount
set forth in Section 10(b) above, and the number of Shares which have been authorized for issuance
under the Plan but have not yet been placed under option (collectively, the Reserves), as well as
the price per Share covered by each option under the Plan which has not yet been exercised, shall
be proportionately adjusted for any increase or decrease in the
8
number of issued Shares resulting
from a stock dividend, recapitalization, stock split, reverse stock split, subdivision,
combination, reclassification or similar change in the capital structure of the Company without
consideration or there is a change in the corporate structure (including, without limitation, a
spin-off) or any other increase or decrease in the number of Shares effected without receipt of
consideration by the Company provided, however, that conversion of any convertible securities of
the Company shall not be deemed to have been effected without receipt of consideration. Such
adjustment shall be made by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issue by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price of Shares subject
to an option.
(b) In the event of the proposed dissolution or liquidation of the Company, each Offering
Period will terminate immediately prior to the consummation of such proposed action, unless
otherwise provided by the Board. In such event, the Board may, in the exercise of its sole
discretion in such instances, declare that the options under the Plan shall terminate as of a date
fixed by the Board and give each participant the right to exercise his or her option as to all of
the optioned Shares.
(c) In the event of a Corporate Transaction (defined below), each option under the Plan shall
be assumed or an equivalent option shall be substituted by such successor corporation or a parent
or subsidiary of such successor corporation, unless the Board determines, in the exercise of its
sole discretion and in lieu of such assumption or substitution, that the participant shall have the
right to exercise the option as to all of the optioned Shares. If the Board makes an option
exercisable in lieu of assumption or substitution in the event of a Corporate Transaction, the
Board shall notify the participant that the option shall be fully exercisable on a date specified
in such notice, and the option will terminate upon the expiration of such period. For purposes of
the Plan, a Corporate Transaction means (i) a merger or consolidation in which the Company is not
the surviving corporation (other than a merger or consolidation with a wholly-owned subsidiary, a
reincorporation of the Company in a different jurisdiction, or other transaction in which there is
no substantial change in the stockholders of the Company or their relative stock holdings and the
options granted under this Plan are assumed, converted or replaced by the successor corporation,
which assumption will be binding on all participants), (ii) a merger in which the Company is the
surviving corporation but after which the stockholders of the Company (other than any stockholder
which merges (or which owns or controls another corporation which merges) with the Company in such
merger) cease to own their shares or other equity interests in the Company, (iii) the sale of
substantially all of the assets of the Company, or (iv) any other transaction which qualifies as a
corporate transaction under Section 424(a) of the Code wherein the stockholders of the Company
give up all of their equity interest in the Company (except for the acquisition, sale or transfer
of all or substantially all of the outstanding shares of the Company from or by the stockholders of
the Company).
(d) The Board may, if it so determines in the exercise of its sole discretion, also make
provision for adjusting the Reserves, as well as the price per Share covered by each outstanding
option, in the event that the Company effects one or more reorganizations, recapitalizations,
rights offerings or other increases or reductions of shares of its outstanding Common Stock, and in
the event of a Corporate Transaction.
9
15. NONASSIGNABILITY
Neither payroll deductions credited to a participants account nor any rights with regard to
the exercise of an option or to receive Shares under the Plan may be assigned, transferred, pledged
or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as
provided in Section 22 hereof) by the participant. Any such attempt at assignment, transfer, pledge
or other disposition shall be without effect.
16. REPORTS
Individual accounts will be maintained for each participant in the Plan. Each participant
shall receive promptly after the end of each Offering Period a report of his account setting forth
the total payroll deductions accumulated, the number of Shares purchased, the per Share price
thereof and the remaining cash balance, if any, carried forward to the next Offering Period,
and any other reports required by applicable law.
17. NOTICE OF DISPOSITION
Each participant under a Statutory Plan shall notify the Company if the participant disposes
of any of the Shares purchased in any Offering Period pursuant to this Plan if such disposition
occurs within two (2) years from the Offering Date or within one (1) year from the Purchase Date on
which such Shares were purchased (the Notice Period). Unless such participant is disposing of any
of such Shares during the Notice Period, such participant shall keep the certificates representing
such Shares in his or her name (and not in the name of a nominee) during the Notice Period. The
Company may, at any time during the Notice Period, place a legend or legends on any certificate
representing Shares acquired pursuant to the Plan requesting the Companys transfer agent to notify
the Company of any transfer of the Shares. The obligation of the participant to provide such notice
shall continue notwithstanding the placement of any such legend on certificates.
18. NO RIGHTS TO CONTINUED EMPLOYMENT
Neither this Plan nor the grant of any option hereunder shall confer any right on any employee
to remain in the employ of the Company or any Subsidiary or restrict the right of the Company or
any Subsidiary to terminate such employees employment.
19. EQUAL RIGHTS AND PRIVILEGES
All participants in an Offering Period under the Statutory Plan shall have the same rights and
privileges with respect to their participation in the Statutory Plan for that Offering Period, in
accordance with Section 423 of the Code and the related regulations (and any successor provisions)
except for differences that may be mandated by local law and are consistent with the requirements
of Code Section 423(b)(5). Any provision of the Statutory Plan, a specific Offering Period or an
option granted under the Statutory Plan which is inconsistent with this Section 19 shall without
further act or amendment by the Company or the Board be reformed, if possible, to the extent
necessary to render such provision in compliance with the requirements of Section 423 of the Code,
or shall otherwise be deleted, and the remainder of the terms of the Statutory Plan, an Offering
Period and/or an option shall not be affected.
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20. NOTICES; ELECTRONIC DELIVERY
(a) All notices or other communications by a participant to the Company under or in connection
with the Plan shall be deemed to have been duly given when received in the form specified by the
Company at the location, or by the person, designated by the Company for the receipt thereof.
(b) Any reference in the Plan to subscription agreements, enrollment forms, authorizations or
any other document in writing shall include any agreement or document delivered electronically,
including through the Companys intranet.
21. CONDITIONS UPON ISSUANCE OF SHARES
Shares shall not be issued with respect to an option unless the exercise of such option and
the issuance and delivery of such Shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933,
as amended, the Securities Exchange Act of 1934, as amended (the Exchange Act), the rules and
regulations promulgated thereunder, and the requirements of any stock exchange upon which the
Shares may then be listed, and shall be further subject to the approval of counsel for the Company
with respect to such compliance. The Company shall have no liability for failure to issue any
Shares under this Plan in the event that such issuance cannot be accomplished in compliance with
all applicable laws.
22. APPLICABLE LAW
The Plan shall be governed by the substantive laws (excluding the conflict of laws rules) of
the State of Delaware.
23. EFFECTIVE DATE; TERM OF THE PLAN
The Plan shall become effective upon approval of the Plan by the stockholders of the Company,
and shall continue until the earliest to occur of (i) termination of the Plan by the Board, (ii)
issuance of all of the Shares reserved for issuance under the Plan, or (iii) ten (10) years from
the date the Plan was originally approved by the stockholders (subject to the ability of the
stockholders to approve later extensions of this term).
24. AMENDMENT OR TERMINATION OF THE PLAN
The Board of Directors of the Company may at any time amend or terminate the Plan. Termination
of the Plan shall not affect options previously granted under the Plan, nor shall any amendment
make any change in an option previously granted which would adversely affect the right of any
participant (unless mutually agreed otherwise between the participant and the Company, which
agreement must be in writing and signed by the participant and the Company); provided that if the
Board determines that a change in applicable accounting rules or a change in applicable laws
renders an amendment or termination desirable, then the Board may approve such an amendment or
termination. Any amendment of the Plan shall be subject to approval of the stockholders of the
Company in the manner and to the extent required by applicable law. In addition, without limiting
the foregoing, the Board may not amend the Plan without approval of
the stockholders of the Company if such amendment would: (i) increase the number of Shares
that may be issued under the Plan; or (ii) expand the designation of the employees (or class of
employees) eligible for participation in the Plan.
11
SYMANTEC SENIOR EXECUTIVE INCENTIVE PLAN
As Amended and Restated Effective September ___, 2008
1. Purposes. The Symantec Senior Executive Incentive Plan is a component of Symantecs
overall strategy to pay its employees for performance. The purposes of this Plan are to: (A)
motivate senior executives by tying their compensation to performance; (B) reward exceptional
performance that supports overall Symantec objectives; and (C) attract and retain top performing
employees.
2. Definitions.
Award means any award made under, or pursuant to any program established under, this Plan
that is paid, or the value of which is denominated, in cash.
Code means the Internal Revenue Code of 1986, as amended.
Committee means the Compensation Committee of Symantecs Board of Directors, or such other
committee designated by that Board of Directors, which is authorized to administer the Plan under
Section 3 hereof. The Committee shall be comprised solely of directors who are outside directors
under Code Section 162(m).
Participant means any Senior Executive to whom an Award is granted under the Plan.
Plan means this Plan, as amended and restated in September 2008, which shall be known as the
Symantec Senior Executive Incentive Plan.
Symantec means Symantec Corporation and any corporation or other business entity of which
Symantec (i) directly or indirectly has an ownership interest of 50% or more, or (ii) has a right
to elect or appoint 50% or more of the board of directors or other governing body.
Senior Executive means a Symantec employee who holds an executive officer position and is
subject to Section 16 of the Securities Exchange Act of 1934 and such other employees as the
Committee may designate.
3. Administration.
A. The Plan shall be administered by the Committee. The Committee shall have the authority
to:
(i) interpret and determine all questions of policy and expediency pertaining to the Plan;
(ii) adopt such rules, regulations, agreements and instruments as it deems necessary for its
proper administration;
(iii) select Senior Executives to receive Awards;
(iv) determine the terms of Awards, including whether any Awards may participate in any
deferral program that may be adopted by Symantec at any time;
(v) determine cash amounts subject to Awards (within the limits prescribed in the Plan);
(vi) determine whether Awards will be granted in replacement of or as alternatives to any
other incentive or compensation plan of Symantec or an acquired business unit;
(vii) grant waivers of Plan or Award conditions (but with respect to Awards intended to
qualify under Code Section 162(m), only as permitted under that Section);
(viii) accelerate the payment of Awards (but with respect to Awards intended to qualify under
Code Section 162(m), only as permitted under that Section);
(ix) correct any defect, supply any omission, or reconcile any inconsistency in the Plan, any
Award or any Award notice;
(x) take any and all other actions it deems necessary or advisable for the proper
administration of the Plan;
(xi) adopt such Plan procedures, regulations, subplans and the like as it deems are necessary
to enable Senior Executives to receive Awards; and
(xii) amend the Plan at any time and from time to time, provided however that no amendment to
the Plan shall be effective unless approved by Symantecs stockholders, to the extent such
stockholder approval is required under Code Section 162(m) with respect to Awards which are
intended to qualify under that Section.
Notwithstanding anything else to the contrary in this Section 3 or elsewhere in this Plan, with respect to
any Award subject to a deferral intended to comply with Code Section 409A, the Committee shall not waive
conditions applicable to, accelerate payment of or otherwise amend outstanding Awards unless such waiver,
acceleration or amendment complies with the requirements of Code Section 409A so as to avoid any amount
subject to the Award becoming subject to Code Section 409A(a)(1).
B. The Committee may delegate its authority to administer Awards to a separate committee
or to one or more individuals who are not a member of the Committee; however, only the Committee
may grant Awards which are intended to qualify as performance-based compensation under Code
Section 162(m) and only the Committee may administer Awards if such administrative function has
Section 162(m) implications.
4. Eligibility. Only Senior Executives may become Participants in the Plan.
5. Performance Goals.
A. The Committee shall establish performance goals applicable to a particular fiscal year
(or a performance period of some other duration) prior to the start of such year or period,
provided however that such goals may be established after the start of the fiscal year (or
performance period) but while the outcome of the performance goal is substantially uncertain in
such manner and at such time as is a permitted method of establishing performance goals under Code
Section 162(m).
B. For purposes of this Plan, a permitted performance goal shall mean any one or more of
the following performance criteria, either individually, alternatively or in any combination,
applied to either the Company as a whole or to a business unit, Affiliate or business segment,
either individually, alternatively or in any combination, and measured either annually or
cumulatively over a period of years (or a period shorter than a year, if required in the context of
the award), on an absolute basis or relative to a pre-established target, to previous years
results or to a designated comparison group, in each case as specified by the Committee in the
Award:
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Income, including net income and operating income
Stockholder return
Earnings per share
Revenue, including growth in revenue
Market share
Return on net assets programs
Return on equity
Return on investment
Cash flow, including cash flow from operations
New product releases
Employee productivity and satisfaction metrics
Strategic plan development and implementation (including individual performance
objectives that relate to achievement of the Companys or any business units
strategic plan)
The Committee may appropriately adjust any evaluation of performance under a performance goal to
exclude any of the following events that occurs during a performance period: (A) asset write-downs;
(B) currency effects; (C) litigation or claim judgments or settlements; (D) the effect of changes
in tax law, accounting principles or other such laws or provisions affecting reported results; (E)
accruals for reorganization and restructuring programs; and (F) any extraordinary non-recurring
items as described in Accounting Principles Board Opinion No. 30 and/or in managements discussion
and analysis of financial condition and results of operations appearing in the Companys annual
report to stockholders for the applicable year.
C. The Committee shall determine the target level of performance that must be achieved
with respect to each criterion that is identified in a performance goal in order for a performance
goal to be treated as attained.
D. The Committee may base performance goals on one or more of the foregoing business
criteria. In the event performance goals are based on more than one business criterion, the
Committee may determine to make Awards upon attainment of the performance goal relating to any one
or more of such criteria, provided the performance goals, when established, are stated as
alternatives to one another at the time the performance goal is established.
6. Awards.
A. Awards may be made on the basis of Symantec and/or business unit performance goals and
formulas determined by the Committee in accordance with this Plan. With respect to any Symantec
fiscal year, no Participant shall be granted Award(s) of more than $5,000,000 in aggregate.
B. After the end of the fiscal year (or performance period), the Committee will determine
the extent to which performance goal(s) for each Participant are achieved and the actual Award (if
any) for each Participant based on the level of actual performance achieved.
C. The Committee, in its discretion, may reduce or eliminate a Participants Award at any
time before it is paid, whether or not calculated on the basis of pre-established performance goals
or formulas.
D. In order to receive payment of or to vest in an Award under this Plan, the Participant
must be an active employee and on Symantecs payroll on either (1) the last day of the fiscal year
(or performance period) to which such Award relates or (2) the date of payment or vesting, in each
case as specified in the documentation governing the specific Award. The Committee in its sole
discretion may make exceptions to this requirement in the case of retirement, death or disability,
or in the case of a corporate change in control as determined by the Committee in its sole
discretion; provided however that the Committee may exercise its discretion in a manner authorized
by this sentence only if such exercise is permitted under the requirements applicable to
performance-based compensation under Code Section 162(m).
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E. Symantec shall withhold all applicable federal, state, local and foreign taxes required
by law to be paid or withheld relating to the receipt or payment of any Award.
F. Subject to further deferral by the Participant under any deferral program that Symantec
may from time to time offer, Symantec shall pay all amounts actually earned under Awards on or
prior to the later of the following dates: (1) the 15th day of the third month
following the end of the Participants first taxable year in which the amount is no longer subject
to a substantial risk of forfeiture, or (2) the 15th day of the third month following
the end of Symantecs first taxable year in which the amount is no longer subject to a substantial
risk of forfeiture.
7. General.
A. This Plan, as amended and restated, shall become effective upon stockholder approval of
the Plan on or after September ___, 2008.
B. If Symantecs financial statements are the subject of a restatement due to error or
misconduct, to the extent permitted by governing law, in all appropriate cases, Symantec will seek
reimbursement of excess incentive cash compensation paid under this Plan to each Participant for
each affected performance period. For purposes of this Plan, excess incentive cash compensation
means the positive difference, if any, between (i) the Award paid to the Participant and (ii) the
Award that would have been made to the Participant had the applicable performance goal been
calculated based on Symantecs financial statements as restated. Symantec will not be required to
award a Participant an additional Plan Award should the restated financial statements result in a
higher Award under this Plan.
C. Any rights of a Participant under the Plan shall not be assignable by such Participant,
by operation of law or otherwise, except by will or the laws of descent and distribution. No
Participant may create a lien on any funds or rights to which he or she may have an interest under
the Plan, or which is held by Symantec for the account of the Participant under the Plan.
D. Participation in the Plan shall not give any Senior Executive any right to remain in
Symantecs employ. Further, the adoption of this Plan shall not be deemed to give any Senior
Executive or other individual the right to be selected as a Participant or to be granted an Award.
E. To the extent any person acquires a right to receive payments from Symantec under this
Plan, such rights shall be no greater than the rights of an unsecured creditor of Symantecs.
F. The Plan shall be governed by and construed in accordance with the laws of the State of
California.
G. The Board may amend or terminate the Plan (i) at any time and for any reason subject to
stockholder approval and (ii) at any time and for any reason if and to the extent the Plans
qualification under Code Section 162(m) would not be adversely affected.
4
PROXY
SYMANTEC CORPORATION
WORLD HEADQUARTERS
20330 STEVENS CREEK BOULEVARD
CUPERTINO, CALIFORNIA 95014
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 22, 2008
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder(s) appoints John W. Thompson, James A. Beer and Arthur F. Courville,
and each of them, with full power of substitution, as attorneys and proxies for and in the name and
place of the undersigned, and hereby authorizes each of them to represent and to vote all of the
shares of Common Stock of Symantec Corporation (Symantec) that are held of record by the
undersigned as of July 24, 2008, which the undersigned is entitled to vote at the Annual Meeting of
Stockholders of Symantec to be held on September 22, 2008, at Symantec Corporation, World
Headquarters, 20330 Stevens Creek Boulevard, Cupertino, California, at 9:00 a.m. (Pacific Time),
and at any adjournments or postponements thereof.
THIS PROXY, WHEN PROPERLY EXECUTED AND RETURNED IN A TIMELY MANNER, WILL BE VOTED AT THE ANNUAL
MEETING AND AT ANY ADJOURNMENT OR POSTPONEMENT THEREOF IN THE MANNER DESCRIBED HEREIN. IF NO
CONTRARY INDICATION IS MADE, THE PROXY WILL BE VOTED IN FAVOR OF ELECTING THE TEN NOMINEES
IDENTIFIED HEREIN TO THE BOARD OF DIRECTORS, FOR PROPOSALS 2, 3, 4 AND 5, AND IN ACCORDANCE WITH
THE JUDGMENT OF THE PERSONS NAMED AS PROXIES HEREIN ON ANY OTHER MATTERS THAT MAY PROPERLY COME
BEFORE THE ANNUAL MEETING.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE SIDE
þ PLEASE MARK VOTES AS IN THIS EXAMPLE.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF ALL NOMINEES IN
PROPOSAL 1 AND FOR PROPOSALS 2, 3, 4 AND 5
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To elect ten directors to Symantecs Board of Directors, each to hold office until the
next annual meeting of stockholders and until his or her successor is elected and qualified
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NOMINEES: (01) Michael A. Brown, (02) William T. Coleman, (03) Frank E. Dangeard, (04)
Geraldine B. Laybourne, (05) David L. Mahoney, (06) Robert S. Miller, (07) George Reyes,
(08) Daniel H. Schulman, (09) John W. Thompson and (10) V. Paul Unruh |
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FOR
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WITHHELD
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ALL
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FROM ALL
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ALL |
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NOMINEES
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NOMINEES
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EXCEPT |
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To withhold authority to vote for any individual nominee(s), mark For All Except and write
the number(s) of the nominee(s) on
the line below.
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FOR
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AGAINST
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ABSTAIN |
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To approve the amendment and restatement of our
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2004 Equity Incentive Plan, including the reservation |
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of an additional 50,000,000 shares for issuance |
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thereunder. |
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To approve the adoption of our 2008 Employee
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Stock Purchase Plan, including the reservation of |
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20,000,000 shares for issuance thereunder. |
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To approve the material terms of the amended and
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restated Symantec Senior Executive Incentive Plan |
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to preserve the deductibility under federal tax rules |
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of awards made under the plan. |
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To ratify the selection of KPMG LLP as Symantecs
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independent registered public accounting firm for the |
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2009 fiscal year. |
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This Proxy must be signed exactly as your name appears hereon. When shares are held by joint
tenants, both should sign. Attorneys, executors, administrators, trustees and guardians should
indicate their capacities. If the signer is a corporation, please print full corporate name and
indicate capacity of duly authorized officer executing on behalf of the corporation. If the signer
is a partnership, please print full partnership name and indicate capacity of duly authorized
person executing on behalf of the partnership.
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Signature: |
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Date: |
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Signature: |
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Date: |
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Mark here for address change and note below. |