Symantec 2008 Annual Report Download - page 62

Equity Incentive Awards
The primary purpose of our equity incentive awards is to align the interests of the named executive officers
with those of the stockholders by rewarding the named executive officers for creating stockholder value over the
long-term. By compensating our executives with the Company’s equity, our executives hold a stake in the
Company’s financial future. The gains realized in the long term depend on our executives’ ability to drive the
financial performance of the Company. Equity incentive awards are also a useful vehicle for attracting and retaining
executive talent in our competitive talent market.
Our 2004 Equity Incentive Plan provides for the award of stock options, stock appreciation rights, restricted
stock, and restricted stock units. We granted named executive officers stock options and restricted stock units
(RSUs) in fiscal 2008 (as described in more detail below). The Company offers all employees the opportunity to
participate in an Employee Stock Purchase Plan which allows for purchase of stock at a discount to market through a
payroll deduction process. This plan is designed to comply with Internal Revenue Code Section 423. During fiscal
2008, three named executive officers participated in our Employee Stock Purchase Plan.
We are currently seeking approval of our stockholders of an amendment and restatement of our 2004 Equity
Incentive Plan (see Proposal No. 2 above) and adoption of a new Employee Stock Purchase Plan designed to qualify
under Code Section 423 (see Proposal No. 3 above). We believe it is important to continue both of these equity
compensation programs, as more fully discussed in the respective Proposals in this Proxy Statement.
We seek to provide equity incentive awards which are competitive with companies in our peer group and the
other information technology companies that the Committee includes in its market composite. As such, we establish
target equity incentive award grant guideline levels for the named executive officers based on market pay
assessments. When making annual equity awards to named executive officers, we consider corporate results
during the past year, the role, responsibility and performance of the individual named executive officer, the
competitive market assessment described above, prior equity awards, and the level of vested and unvested equity
awards then held by each participating officer. In making equity awards, we also generally take into consideration
gains recognizable by the executive from equity awards made in prior years. Mercer provides the Committee with
market data on these matters, as well as providing to the Committee summaries of the prior grants made to the
individual named executive officers.
For fiscal 2008, approximately 50% of the named executive officers’ equity incentive award value was granted
in the form of RSUs and approximately 50% in the form of stock options (except for the grants in fiscal 2008 to
Mr. Salem, as noted below in “Equity Grant Practices,” which were somewhat more heavily weighted towards stock
options).
On April 25, 2006, the Committee approved an equity grant for the CEO of options to acquire 400,000 shares
of common stock and 100,000 RSUs. On May 1, 2007, the Committee approved an equity grant for the CEO of
options to acquire 225,000 shares of common stock and 65,000 RSUs. Mr. Thompson declined each of these equity
grants in full and indicated to the Committee that he believed previous stock option grants made to him by the
Committee were sufficient to achieve the Committee’s objectives of retaining him, aligning his financial interests
with those of stockholders, and focusing him on improving the Company’s overall financial results. On April 29,
2008, the Committee approved, and Mr. Thompson accepted, an equity grant of options to purchase 380,000 shares
and 115,000 RSUs.
Burn Rate and Dilution: We closely manage how we use our equity to compensate employees. We think of
“gross burn rate” as the total number of shares granted under all of our equity incentive plans during a period divided
by the average number of shares of common stock outstanding during that period and expressed as a percentage. We
think of “net burn rate” as the total number of shares granted under all of our equity incentive plans during a period,
minus the total number of shares returned to such plans through awards cancelled during that period, divided by the
average number of shares of common stock outstanding during that period, and expressed as a percentage.
“Overhang” we think of as the total number of shares underlying options and awards outstanding plus shares
available for issuance under all of our equity incentive plans at the end of a period divided by the average number of
shares of common stock outstanding during that period and expressed as a percentage. For purposes of these
calculations, each full-value award grant (i.e., RSU) is treated as the equivalent of the grant of two options in order
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