Symantec 2010 Annual Report Download - page 57

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 in
fiscal 2010 (as described in more detail below, including under the Summary Compensation Table and Grant of
Plan-Based Awards table on pages 51 and 53, respectively). We also offer all employees the opportunity to
participate in the 2008 Employee Stock Purchase Plan, which allows for the purchase of our stock at a discount to
the fair market value through payroll deductions. This plan is designed to comply with Section 423 of the Code.
During fiscal 2010, three named executive officers participated in the 2008 Employee Stock Purchase Plan.
We seek to provide equity incentive awards that are competitive with companies in our peer group and the other
information technology companies that the Compensation 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 named executive 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 Compensation Committee with market data on these matters, as well as providing to the Compensation
Committee summaries of the prior grants made to the individual named executive officers.
For fiscal 2010, approximately 55% of the named executive officers’ equity incentive award value was granted
in the form of restricted stock units and approximately 45% in the form of stock options (other than Mr. Salem, as
noted above).
Stock Options: Options provide an incentive for executives to drive long-term share price appreciation
through the development and execution of effective long-term strategies. Stock option value is only realized if the
trading price of our common stock increases so that option holder interests are therefore aligned with stockholder
interests. Stock options are issued with exercise prices at 100% of the grant-date fair market value to assure that
executives will receive a benefit only when the trading price increases. Option awards generally have value for the
executive only if the executive remains employed for the period required for the shares to vest. Options granted in
fiscal 2010 vest 25% after the first year and on a monthly basis thereafter for the next 36 months, and, if not
exercised, expire in a maximum of seven years (or earlier in the case of termination of employment). Providing for
four-year option vesting creates retention value and is in line with market practices among companies in our market
composite. (Details of stock options granted to the named executive officers in fiscal 2010 are disclosed in the
Summary Compensation Table and Grants of Plan-Based Awards table included on pages 51 and 53, respectively.)
Restricted Stock Units (RSUs): RSUs represent the right to receive one share of Symantec common stock for
each RSU vested upon the settlement date, which is the date on which certain conditions, such as continued
employment with us for a pre-determined length of time, are satisfied. Starting in fiscal 2007, we elected to
substitute a percentage of the named executive officers’ equity incentive award value, which had historically been
provided with only stock options, with RSUs. This change was made, and the Compensation Committee has
continued this practice, to enhance the retention of named executive officers and balance the more volatile rewards
associated with stock options. The Compensation Committee believes that RSUs align the interests of the named
executive officers with the interests of the stockholders because the value of these awards appreciate if the trading
price of our common stock appreciates, and also have retention value even during periods in which our trading price
does not appreciate, which supports continuity in the senior management team.
Shares of our stock are issued to RSU holders as the awards vest. The vesting schedule for RSUs granted to our
named executive officers in fiscal 2010 provided that each award vests in four equal annual installments. The
vesting schedule of RSUs was changed from 3 years to 4 years for the FY10 grants in order to align with the vesting
schedule of stock options which vest over 4 years. (Details of RSUs granted to the named executive officers in fiscal
2010 are disclosed in the Summary Compensation Table and Grants of Plan-Based Awards table on pages 51 and 53,
respectively.)
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