Symantec 1999 Annual Report Download - page 87

SYMANTEC CORPORATION
Notes to Consolidated Financial Statements, Continued
73
The total amount of legal expenses accrued as of the respective year ends and the amounts expensed for the years
ended are reflected below:
Balance as of March 31, 1997 $1.0 million Amount expensed in 1997 $2.6 million
Balance as of March 31, 1998 $2.5 million Amount expensed in 1998 $4.9 million
Balance as of March 31, 1999 $7.2 million Amount expensed in 1999 $10.1 million
NOTE 17. LEASE BUILDINGS
In fiscal 1997, Symantec entered into lease agreements for two existing office buildings (Cupertino City Center One,
or CC1, and World HeadQuarters, or WHQ), one parcel of land and one office building under construction
(Cupertino City Center Five, or CC5) in Cupertino, California. During fiscal 1999 Symantec’s landlord, exchanged
CC5 for another leased building (Cupertino City Center Two, or CC2) located in Cupertino, California and committed
to sell WHQ to an unrelated third party on or before November 1, 1999, thus relieving Symantec of its responsibility
for its lease of WHQ. Symantec will move both personnel and equipment into CC2 once certain tenant improvements
are completed, which is currently scheduled to occur before November 1, 1999. In connection with these leases,
Symantec is required to maintain a restricted cash balance invested in U.S. Treasury securities with maturities not to
exceed three years. In accordance with the lease terms, these funds are not available to meet operating cash
requirements. In addition, we are obligated to comply with certain financial covenants. Future acquisitions may
cause us to be in violation of these financial covenants.
NOTE 18. ADOPTION OF STOCKHOLDER RIGHTS PLAN
On August 11, 1998, Symantec’s Board of Directors, the Board, adopted a stockholder rights plan designed to ensure
orderly consideration of any future unsolicited acquisition attempt to ensure fair value of the Company for its
stockholders.
In connection with the plan, the Board declared a dividend of one preferred share purchase right for each share of
Symantec’s common stock outstanding on August 21, 1998 (the “Record Date”). The Board further directed the
issuance of one such right with respect to each share of Symantec’s common stock that is issued after the Record
Date, except in certain circumstances. The rights will expire on August 12, 2008.
The rights are initially attached to Symantec’s common stock and will not trade separately. If a person or a group (an
“Acquiring Person”) acquires 20% or more of the Company’s common stock, or announces an intention to make a
tender offer for 20% or more of Symantec’s common stock, the rights will be distributed and will thereafter trade
separately from the common stock. Each right will be exercisable for 1/1000th of a share of a newly designated Series
A Junior Participating Preferred Stock at an exercise price of $150.00. The preferred stock has been structured so
that the value of 1/1000th of a share of such preferred stock will approximate the value of one share of common stock.
Upon a person becoming an Acquiring Person, holders of the rights (other than the Acquiring Person) will have the
right to acquire shares of Symantec’s common stock at a substantially discounted price.
If a person becomes an Acquiring Person and Symantec is acquired in a merger or other business combination, or
50% or more of its assets are sold to an Acquiring Person, the holder of rights (other than the Acquiring Person) will
have the right to receive shares of common stock of the acquiring corporation at a substantially discounted price.
After a person has become an Acquiring Person, the Board, at its option, require the exchange of outstanding rights
(other than those held by the Acquiring Person) for common stock at an exchange ratio of one share of Symantec’s
common stock per right.
The Board may redeem outstanding rights at any time prior to a person becoming an Acquiring Person at a price of
$0.001 per right. Prior to such time, the terms of the rights may be amended by the Board. In addition, the Board
also amended Symantec’s bylaws to: permit only the Chairman, President or the Board to call a special meeting of the
stockholders; require that the Board be given prior notice of a stockholder proposal to take action by written consent
so that a record date for such action can be established; require advance notice to the Board of stockholder-sponsored
proposals for consideration at annual meetings and for stockholder nominations for the election of directors; permit
the Board to meet on one- rather than two-day advance notice; and conform the bylaws to applicable provisions of
Delaware law regarding the inspection of elections at stockholder meetings.