Symantec 2008 Annual Report Download - page 35

Plan (no more than 400,000 of which can be as awards of restricted stock or restricted stock units) except that new
employees of Symantec, or any parent, subsidiary or affiliate of Symantec, are eligible to receive up to a maximum
of 3,000,000 shares in the calendar year in which they commence employment (no more than 600,000 of which can
be as awards of restricted stock or restricted stock units).
Additional requirements apply to certain forms of compensation, such as restricted stock units and restricted
stock awards, in order for them to qualify as performance-based compensation, including a requirement that
payment of the value of such awards be contingent upon achievement of performance goals that are established in a
manner specified under Section 162(m) of the Code. The 2004 Plan permits Symantec to issue awards incorporating
such performance objectives and provides that these performance objectives may be based upon: (a) net revenue
and/or net revenue growth; (b) earnings before income taxes and amortization and/or earnings before income taxes
and amortization growth; (c) operating income and/or operating income growth; (d) net income and/or net income
growth; (e) earnings per share (“EPS”) and/or earnings per share growth; (f) total stockholder return and/or total
stockholder return growth; (g) return on equity; (h) operating cash flow return on income; (i) adjusted operating
cash flow return on income; (j) economic value added; and (k) individual business objectives (collectively, the
“Performance Factors”). To the extent that the Committee determines that an award will be granted subject to
Performance Factors, such factors will be specified with respect to a particular award by the Committee in a manner
designed to comply with Section 162(m).
Stock Options. As discussed above, the Committee determines the terms and conditions of awards granted
under the 2004 Plan, including whether an option will be an ISO or a non-qualified stock option (“NQSO”).Asa
matter of practice, all options currently being granted are NQSOs. Each option is evidenced by an agreement in such
form as the Committee approves and is subject to the following conditions (as described in further detail in the 2004
Plan):
•Vesting and Exercisability: Options become vested and exercisable, as applicable, within such periods, or
upon such events, as determined by the Committee and as set forth in the related stock option agreement.
Under the 2004 Plan, the maximum term of each option is ten years from the date of grant. As a matter of
practice, options have generally been subject to a four-year vesting period with a one-year period before any
vesting occurs and are currently granted with a maximum term of seven years from the date of grant.
•Exercise Price: Each stock option agreement states the exercise price of the option, which may not be less
than 100% of the fair market value of Symantec common stock on the date of the grant. The fair market value
of our shares is generally the closing price for our shares on the Nasdaq Global Select Market on the relevant
date as reported in The Wall Street Journal.
•Method of Exercise: The exercise price of options and the purchase price, if any, of other stock awards may
be paid by cash, check, wire transfer, cancellation of indebtedness, surrender of shares previously held,
broker assisted same-day sales, net exercise, waiver of compensation and any other method permitted by the
Committee and applicable law.
•Termination of Employment: Options cease vesting on the date of termination of service or the death or
disability of the participant. Options granted under the 2004 Plan generally expire three months after the
termination of the participant’s service to Symantec, except in the case of death or disability, in which case
the awards generally may be exercised to the extent vested and exercisable up to 12 months following the
date of death or termination of service. However, if the participant is terminated for cause, the participant’s
options will expire upon termination.
•Change of Control: In the event of a change of control of Symantec (as set forth in the 2004 Plan), the
buyer may either assume outstanding awards or substitute equivalent awards. If the buyer fails to assume or
substitute awards issued under the 2004 Plan, all awards will expire upon the closing of the transaction, and
our Board will determine whether the change of control will have any additional effect, including
acceleration of the vesting period of the awards. Formula restricted stock unit grants to non-employee
directors will fully vest upon a change of control.
Non-Employee Director Equity Awards. The 2004 Plan provides for an annual non-discretionary award of
restricted stock units with a value of $180,000 on the date of grant to each non-employee director on the first
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