Symantec 2000 Annual Report Download - page 48

These options will expire if not exercised by specific dates ranging
from April 2000 to March 2010. Prices for options exercised dur-
ing the three-year period ended March 31, 2000 ranged from $3.14
to $39.13.
In 1999, we issued 100,000 restricted shares to our CEO for a pur-
chase price of par ($0.01 per share), vesting 50%at each
anniversary date beginning April 14, 2000. Unearned compensa-
tion equivalent to the market value of the common stock on the
date of grant, less par, was charged to stockholders’ equity and
is being amortized into compensation expense over the vesting
term. At March 31, 2000, there were 100,000 restricted shares out-
standing with none vested.
We elected to follow APB Opinion No. 25, Accounting for Stock
Issued to Employees, in accounting for our employee stock
options because, as discussed below, the alternative fair value
accounting provided for under SFAS No. 123, Accounting for
Stock-Based Compensation, requires the use of option valuation
models that were not developed for use in valuing employee stock
options. Under APB No. 25, because the exercise price of our
employee stock options generally equals the market price of the
underlying stock on the date of grant, no compensation expense is
recognized in our financial statements.
Pro forma information regarding net income and earnings per
share is required by SFAS No. 123. This information is required to
be determined as if we had accounted for our employee stock
options (including shares issued under the Employee Stock Pur-
chase Plans, collectively called “options”) granted subsequent to
March 31, 1995 under the fair value method of that statement. The
fair value of options granted in fiscal 2000, 1999 and 1998 reported
below has been estimated at the date of grant using the Black-
Scholes option-pricing model assuming no expected dividends
and the following weighted average assumptions:
Employee Stock Options
2000 1999 1998
Expected life (years) 4.99 5.27 4.84
Expected volatility 0.65 0.66 0.61
Risk-free interest rate 6.5% 5.1% 5.4%
Employee Stock Purchase Plans
2000 1999 1998
Expected life (years) 0.50 0.50 0.50
Expected volatility 0.68 0.79 0.55
Risk-free interest rate 5.2% 4.8% 5.2%
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, includ-
ing 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 our opinion, the exist-
ing models do not necessarily provide a reliable single measure of
the fair value of our options.
The weighted average estimated fair values of employee stock
options for fiscal 2000, 1999 and 1998 were $27.24, $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 Plans during fiscal 2000, 1999 and 1998
were $20.05, $10.47 and $14.71, respectively.
For purposes of pro forma disclosures, the estimated fair value
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
Plans). Our pro forma information is as follows:
Year Ended March 31,
(In thousands, except per share data) 2000 1999 1998
Net income–Basic–Pro forma $ 137,829 $ 25,100 $ 68,601
Net income–Diluted–Pro forma 137,829 25,727 69,293
Net income per share–
Basic–Pro forma 2.49 0.47 1.29
Net income per share–
Diluted–Pro forma 2.31 0.45 1.19
The effects on pro forma disclosures of applying SFAS No. 123 are
not likely to be representative of the effects on pro forma disclo-
sures of future years. Because SFAS No. 123 is applicable only to
options granted subsequent to March 31, 1995, its pro forma effect
is not fully reflected until the beginning of fiscal 2000.
NOTE 11. COMMON STOCK REPURCHASES
On April 29, 1997, the Board of Directors of Symantec (the
“Board”), authorized the repurchase of up to 1.0million shares of
Symantec common stock by June 13, 1997. As of June 13, 1997, we
completed the repurchase of 0.5million shares at prices ranging
from $16.57 to $17.00 per share. Authorization to repurchase the
remaining 0.5million shares expired as of March 31, 1998.
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