Symantec 2010 Annual Report Download - page 34

PROPOSAL NO. 3
AMENDMENT TO OUR 2004 EQUITY INCENTIVE PLAN
We are asking stockholders to approve an amendment to our 2004 Equity Incentive Plan (the “2004 Plan”)to
increase the number of shares reserved for issuance under the 2004 Plan by 55,000,000 shares. The Board approved
this amendment in May 2010, subject to stockholder approval at the annual meeting.
Since the 2004 Plan has not been modified other than as provided above, it will continue to contain the
following important features:
• Each one share granted as a restricted stock award or restricted stock unit (“RSU”) will count as the issuance
of two shares reserved for issuance under the 2004 Plan for the purpose of computing shares remaining
available for issuance. (Shares subject to stock options or stock appreciation rights (“SARs”) reduce the
shares available for issuance on a one-for-one basis.)
• Stock options and SARs must be granted with an exercise price that is not less than 100% of the fair market
value on the date of grant.
• Repricing of stock options and SARs is prohibited unless stockholder approval is obtained.
We believe that the increase in the number of shares reserved for issuance under the 2004 Plan is in the best
interests of our company because of the continuing need to provide stock options, RSUs and other equity-based
incentives to attract and retain the most qualified personnel and to respond to relevant market changes in equity
compensation practices. The use of equity compensation has historically been a significant part of our overall
compensation philosophy at Symantec and is a practice that we plan to continue. The 2004 Plan serves as an
important part of this practice and is a critical component of the overall compensation package that we offer to retain
and motivate our employees. In addition, awards under the 2004 Plan provide our employees an opportunity to
acquire or increase their ownership stake in us, and we believe this aligns their interests with those of our
stockholders, creating strong incentives for our employees to work hard for our future growth and success. If
Proposal No. 3 is not approved by our stockholders, we believe our ability to attract and retain the talent we need to
compete in our industry would be seriously and negatively impacted and this could affect our long-term success.
In connection with its approval of the amendment of the 2004 Plan, the Board has considered Symantec’s
current stock repurchase program, under which $747 million remained authorized for future repurchases as of
April 2, 2010, with no expiration date. We believe that stock repurchases reduce the potential dilutive effect of the
issuance of additional equity incentives to employees.
Plan History
The 2004 Plan was originally adopted by the Board in July 2004, and it was approved by our stockholders in
September 2004. The 2004 Plan was amended and restated by the Board and our stockholders in 2006 to increase
the number of shares reserved for issuance and effect other changes, and in 2008 to increase the number of shares
reserved for issuance. Our stockholders have previously approved the reservation of an aggregate of 108 million
shares for issuance under the 2004 Plan, plus an additional number of shares that transfer to the 2004 Plan upon
cancellation of awards granted under our 1996 Equity Incentive Plan (the “Prior Plan”), which was our primary
equity compensation plan prior to the adoption of the 2004 Plan. We no longer grant awards under the Prior Plan. As
of July 2, 2010, approximately 24,700,000 shares have transferred to the 2004 Plan upon cancellation or forfeiture
of Prior Plan awards. While approximately 20,400,000 shares remain subject to options still outstanding under the
Prior Plan, we estimate that less than half of these shares will become available for grant under the 2004 Plan
because approximately 6,100,000 of these options were vested and “in the money” as of July 2, 2010. An “in the
money” option is an option with an exercise price at which a share may be purchased is less than the fair market
value of our common stock as of July 2, 2010. Shares under our 2004 Plan are allocated as follows:
• 16,288,576 shares are issued and outstanding as a result of option exercises and settlement of restricted stock
awards and RSUs (and are therefore not available for future grant);
• 45,686,775 shares are subject to outstanding options, restricted stock awards and RSUs;
22