Symantec 1996 Annual Report Download - page 39

Company to offer to each employee with stock options having
an exercise price greater than $13.10 (the “Old Options”) the
o p p o rtunity to cancel the affected grants and re c e i ve a new
grant for the same number of shares dated March 4, 1996 (the
“ New Op t i o n s”). T he New Options have an exe rcise price
equal to $13.10. Under the terms of this stock option cancella-
tion and regrant, all options began vesting as of the new grant
date and no portion of any regranted option may be exercised
until March 4, 1997. Options representing a total of approxi-
mately 2.3 million shares of common stock were canceled and
regranted. The President and Chief Exe c u t i ve Of f i c e r, the
Exe c u t i ve Vice President, Worldwide Operations and Chief
Financial Officer, the majority of the members of the Executive
St a f f, and all members of the Board of Di rectors elected to
e xclude themselves from this stock option cancellation and
regrant.
On Ma r c h 4, 1996, the Board of Di r ectors also approved the
1996 Equity In c e n t i ve Plan (the “Pl a n”), the purpose of which is
to provide incentives to attract, retain and motivate eligible per-
sons whose present and potential contributions are important to
the success of Symantec by offering them an opportunity to par-
ticipate in the Company’s future performance through awards of
options and stock bonuses. This Plan is intended to replace the
1988 Option Plan, which the Board terminated as of stockholder
a p p r oval of the Plan. The Plan will be administered by either the
B o a rd of Di rectors or a committee appointed by the Board of
Di rectors. Aw a r ds under the Plan may be granted to employe e s ,
officers, directors, consultants, independent contractors and advi-
sors of Symantec (or of any parent, subsidiary or affiliate of
Symantec as the Board of Di r ectors or committee may deter-
mine). On May 14, 1996, the stockholders of Symantec approve d
the Plan, including the allocation of approximately 2.7 million
s h a res to be made available for the grant of such awards. As of
Ma rc h 31, 1996, no awards we r e outstanding under the Pl a n .
During fiscal 1996, Symantec also registered 400,000 shares
to be issued under the terms of the 1994 Patent Incentive Plan.
The purpose of this plan is to increase awareness of the increas-
ing importance of patents to Sy m a n t e c’s business and to
provide employees with incentives to pursue patent protection
for new technologies that may be valuable to the Company.
The Company’s exe c u t i ve officers are not eligible for award s
under the 1994 Patent Incentive Plan. As of March 31, 1996,
approximately 4,000 shares had been issued under this plan.
Stock option and warrant activity was as follows:
Note 9. Related Party Transactions
As part of the acquisition of Peter No rton Computing,
Incorporated (“No rt o n”) in fiscal 1991, Symantec assumed
No r t o n’s perpetual exc l u s i ve license agreement with Mr. No rt o n ,
a member of Sy m a n t e c ’s Board of Di rectors until his re s i g n a -
tion on September 27, 1994, to use his name and image for
computer software products. Under the terms of the license,
Mr. Norton is entitled to receive a royalty equal to the greater
of 1% of net sales or 0.4% of the suggested retail price of prod-
ucts bearing Mr. Norton’s name. Mr. Norton may terminate the
agreement if Symantec fails to pay Mr. Norton an average of at
least $30,000 of royalties in any three consecutive ye a r s .
Royalty expense under the agreement was $2.9 million, $1.9
million and $1.6 million for the years ended March 31, 1996,
1995 and 1994, respectively.
Ad d i t i o n a l l y, in connection with certain indemnification
a g r eements entered into as part of the acquisition of No rt o n ,
Mr. Norton agreed to reimburse Symantec for certain litigation
and acquisition costs in excess of specified amounts.
The net amount payable to Mr. No rton pursuant to these
agreements at March 31, 1996 and 1995 was $0.4 million and
$0.3 million, respectively.
(In thousands, Number Exercise
except exercise price per share) of Shares Price Per Share
Outstanding at March ,  , . –.
Granted , . –.
Exercised (,). –.
Canceled (,). –.
Outstanding at March ,  , . –.
Granted , . –.
Exercised (,). –.
Canceled (,). –.
Outstanding at March ,  , . –.
Granted , . –.
Exercised (,). –.
Canceled (,). –.
Outstanding at March ,  , . –.
(In thousands) March ,
Balances are as follows:  
Reserved for issuance , ,
Available for future grants  ,
Exercisable and vested , ,
Exercised, subject to repurchase 