Symantec 2008 Annual Report Download - page 45

PROPOSAL NO. 4
APPROVAL OF THE MATERIAL TERMS OF THE
AMENDED AND RESTATED SYMANTEC SENIOR EXECUTIVE INCENTIVE PLAN
You are being asked to approve certain material terms of the Symantec Senior Executive Incentive Plan (as
amended and restated, the “SEIP”) to allow future performance-based compensation awards under the SEIP to be
fully deductible by Symantec under Section 162(m) of the Code. The Board approved an amendment and restatement
of the SEIP on April 29, 2008, subject to the stockholder approval of certain material terms of the SEIP we are seeking
at the annual meeting under this Proposal No. 4. Stockholder approval of this Proposal No. 4 will be effective with
respect to awards granted under the SEIP following the date of the annual meeting and will not affect any awards
granted prior to August 21, 2008.
Background
The SEIP is a plan structured so as to qualify compensation paid under it to certain executive officers as
“performance-based compensation” under federal tax rules applicable to public companies. Section 162(m) of the
Code generally disallows a tax deduction to public companies for compensation in excess of $1 million paid during
a single year to the company’s Chief Executive Officer or any of the three other most highly compensated executive
officers. Certain performance-based compensation is exempt from this deduction limit if it meets the requirements
of Section 162(m), including a requirement that payment of the compensation be contingent upon achievement of
performance goals that are established and administered in a manner specified under Section 162(m). In addition, to
qualify as performance-based compensation, the compensation (or the plan under which it is granted, including the
possible performance goals that may be used) must have been approved by stockholders, there must be a limit on the
amount of compensation that may be paid to an employee during a specified period of time, and achievement of the
applicable performance goals must be substantially uncertain at the time the individual awards are established.
Finally, Section 162(m) imposes certain independence requirements on the members of the Board-level committee
administering the performance-based compensation program.
We currently operate two cash incentive award programs under the SEIP, our Annual Incentive Plan which has
a performance period that coincides with our fiscal year, and our Long-Term Incentive Plan which has two-year
performance periods. These programs are described in more detail in our “Compensation Discussion & Analysis”
(beginning on page 42). Operating these two programs under the SEIP allows us to fully deduct amounts paid under
them to our named executive officers. To continue to operate the SEIP as a plan under which performance-based
compensation may be granted, we seek your approval of the performance goals (set forth below) that may be used in
connection with the grant of awards under the SEIP. Section 162(m) requires that stockholders re-approve such
performance goals every five years. Our stockholders are considered to have last approved the SEIP’s performance
goals when they originally approved the SEIP in August 2003. Approval of this Proposal No. 4 will allow us to grant
tax-qualified awards under the SEIP until September 22, 2013.
Your approval of this Proposal No. 4 will constitute approval of all the material terms of the SEIP for purposes
of Section 162(m), as described in this Proposal No. 4.
If our stockholders do not approve this Proposal No. 4, then the SEIP will continue in its current form until the
current stockholder approval of the plan expires on August 21, 2008 (although certain amendments made to the
SEIP by our Compensation Committee that do not require stockholder approval will be given effect) and, after that
date, we will no longer be able to grant awards that qualify as performance-based compensation under
Section 162(m) from the SEIP. While we would continue to be permitted to award and pay cash incentive bonuses
to our executive officers outside the SEIP regardless of whether our stockholders approve this Proposal No. 4, we
would cease making awards under the SEIP following the annual meeting if our stockholders in fact do not approve
this Proposal No. 4, and as a result, we might not be able to deduct some or all of the cash bonus amounts paid to
executive officers in future years.
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