Symantec 2001 Annual Report Download - page 54

future results of operations or cash flows could be materially adversely
affected in a particular period. We have accrued certain estimated legal
fees and expenses related to certain of these matters; however, actual
amounts may differ materially from those estimated amounts.
The legal expenses accrued by us are deemed probable because the law-
suits have been filed, management has determined its plans of action
with regards to the cases and accordingly knows that it will incur legal
expenses related to the particular lawsuit. Utilizing the assumptions
noted in the accounting policy, management is able to estimate a mini-
mum amount of legal fees to be incurred in these lawsuits.
The total amount of legal and settlement expenses accrued as of the
respective year- ends and the amounts expensed for the years ended are
reflected below:
Balance as of March 31, 1999 $ 7.2 million
Amount expensed in fiscal 1999 $ 10.1 million
Balance as of March 31, 2000 $ 8.7 million
Amount expensed in fiscal 2000 $ 7.3 million
Balance as of March 31, 2001 $ 8.4 million
Amount expensed in fiscal 2001 $ 3.4 million
Note 16. Adoption of Stockholder Rights Plan
On August 11, 1998, the Board adopted a stockholder rights plan
designed to ensure orderly consideration of any future unsolicited
acquisition attempt to ensure fair value of us for our stockholders.
In connection with the plan, the Board declared a dividend of one pre-
ferred share purchase right for each share of Symantec common stock
outstanding on the Record Date, August 21, 1998. The Board further
directed the issuance of one such right with respect to each share of
Symantec 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 common stock and will
not trade separately. If a person or a group (an “Acquiring Person”)
acquires 20% or more of our common stock, or announces an inten-
tion to make a tender offer for 20% or more of our 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 our
common stock at a substantially discounted price.
If a person becomes an Acquiring Person and we are 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, requires 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 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 our 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 stock-
holder 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 meet-
ings 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.
Note 17. Segment Information
Our operating segments are significant strategic business units that
offer different products and services, distinguished by customer needs.
We have five operating segments: Consumer Products, Enterprise
Security, Enterprise Administration, Services and Other.
The Consumer Products segment focuses on delivering our security
and problem-solving products to individual users, home offices and
small businesses. The Enterprise Security segment focuses on provid-
ing organizations with technology, services and response capabilities to
deal with their specific needs. The Enterprise Administration segment
focuses on offering products that enable companies to be more effec-
tive and efficient within their IT departments. The Services segment is
focused on providing information security solutions that incorporate
best-of-breed technology, security best practices and expertise and
global resources to help enable E-business success. The Other segment
is comprised of sunset products, products nearing the end of their life
cycle, and operations from our Visual Café and ACT! divested product
lines.Also included in the Other segment are all indirect costs, general
and administrative expenses, amoritization of goodwill and charges
that are one-time in nature, such as acquired in-process research and
development, judgment settlements and restructuring and other
expenses which are not charged to the other operating segments.
We shifted our focus to these new business segments during fiscal
2000, with additional realignment in fiscal 2001. Due to this change,
we have presented the fiscal 2000 and 1999 segment information to
conform to our current segments.
The accounting policies of the segments are the same as those
described in the summary of significant accounting policies. There are
no intersegment sales. Our chief executive officer and chief financial
officer evaluate performance based on direct profit or loss from opera-
tions before income taxes not including nonrecurring gains and losses,
foreign exchange gains and losses and miscellaneous other income and
expenses.Assets and liabilities are not discretely allocated or reviewed
by segment.
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