Symantec 1999 Annual Report Download - page 81

SYMANTEC CORPORATION
Notes to Consolidated Financial Statements, Continued
67
value method of that statement. The fair value of options granted in fiscal 1998 and 1999 reported below has been
estimated at the date of grant using Black-Scholes option pricing model assuming no expected dividends and the
following weighted average assumptions:
Employee Employee Stock
Stock Options Purchase Plan
1999 1998 1997 1999 1998 1997
Expected life (years) 5.27 4.84 4.34 0.50 0.50 0.50
Expected volatility 0.66 0.61 0.63 0.79 0.55 0.74
Risk free interest rate 5.1% 5.4% 6.7% 4.8% 5.2% 5.4%
The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that
have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly
subjective assumptions, including the expected stock price volatility. Because our options have characteristics
significantly different from those of traded options and because changes in the subjective input assumptions can
materially affect the fair value estimate, in the opinion of management, the existing models do not necessarily provide
a reliable single measure of the fair value of its options.
The weighted-average estimated fair values of employee stock options for fiscal 1999 and 1998 were $12.56 and
$13.44 per share, respectively. The weighted-average estimated fair value of employee stock purchase rights granted
under the Employee Stock Purchase Plan during fiscal 1999 and 1998 were $10.47 and $14.71, respectively.
For purposes of pro forma disclosures, the estimated fair values of the options is amortized to expense over the
options’ vesting period (for employee stock options) and the six-month purchase period (for stock purchases under the
Employee Stock Purchase Plan). The Company’s pro forma information is as follows:
Year Ended March 31,
(In thousands, except per share information) 1999 1998 1997
Net income – Basic – Pro forma $25,100 $68,601 $14,123
Net income – Diluted – Pro forma 25,727 69,293 14,123
Net income per share – Basic – Pro forma 0.47 1.29 0.28
Net income per share – Diluted – Pro forma 0.45 1.19 0.27
The effects on pro forma disclosures of applying SFAS No. 123 are not likely to be representative of the effects on
pro forma disclosures of future years. Because SFAS 123 is applicable only to options granted subsequent to
March 31, 1995, its pro forma effect will not be fully reflected until approximately fiscal 2000.
NOTE 12. COMMON STOCK REPURCHASE
On April 29, 1997, the Board of Directors of Symantec, the Board, authorized the repurchase of up to 1,000,000
shares of Symantec common stock by June 13, 1997. As of June 13, 1997, management completed the repurchase of
500,000 shares at prices ranging from $16.57 to $17.00 per share. Authorization to repurchase the remaining 500,000
shares expired as of March 31, 1998.
On November 24, 1997, the Board authorized the repurchase of up to 500,000 shares of Symantec common stock. As
of December 4, 1997, management completed the repurchase of 500,000 shares at prices ranging from $25.25 to
$26.81 per share.
On June 9, 1998, the Board authorized the repurchase of up to 5% of Symantec’s outstanding common stock before
December 31, 1998. The Company completed the repurchase as of October 30, 1998, repurchasing a total of 2.875
million shares at prices ranging from $13.10 to $27.21, for an aggregate amount of approximately $56 million.
On March 22, 1999, the Board authorized the repurchase of up to $75 million of the Company’s common stock. As
of June 15, 1999, the Company has repurchased 1,000,000 shares at prices ranging from $17.90 to $19.87, for an
aggregate amount of approximately $19 million.