Symantec 2010 Annual Report Download - page 58

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 (e.g., restricted stock unit) is treated as the equivalent of the grant of two
options in order to recognize the economic difference in the equity vehicle types. The Compensation Committee
targets an annual gross burn rate of approximately 3% to allow for effective attraction, retention and motivation of
senior management and the broader employee base, while staying within parameters acceptable to stockholders.
The Compensation Committee determines the percentage of equity to be made available for our equity programs
with reference to the companies in our market composite. In addition, the Compensation Committee considers the
accounting costs that will be reflected in our financial statements when establishing the forms of equity to be
granted and the size of the overall pool available. From fiscal 2005 through fiscal 2009, our gross and net burn rates
were at or below 3%. For fiscal 2010, our gross burn rate was 3.27%, our net burn rate was 2.68%, and our overhang
was 17.1%. Our burn rate was somewhat higher than our historical averages in fiscal 2010 due to competitive
pressures.
Equity Grant Practices: The Compensation Committee generally approves grants to the named executive
officers at its first meeting of each fiscal year, or shortly thereafter through subsequent action. The grant date for all
stock options and RSUs granted to employees, including the named executive officers, is the 10th day of the month
following the applicable meeting or, if the meeting occurs within the first ten days of a particular month, the grant
date is the 10th day of that month (in each case, if the 10th day is not a business day, the grant is generally made on
the previous business day to such day). The exercise price for stock options is the closing price of our common
stock, as reported on the Nasdaq Global Select Market, on the date of grant. The Compensation Committee does not
coordinate the timing of equity awards with the release of material nonpublic information. RSUs may be granted
from time to time throughout the year, but all RSUs generally vest on either March 1, June 1, September 1 or
December 1 for administrative reasons.
Change of Control and Severance Arrangements: The vesting of certain stock options and RSUs held by
our named executive officers will accelerate if they experience an involuntary (including constructive) termination
of employment under certain circumstances. In addition, in September 2009, we entered into an employment
agreement with Enrique Salem to provide him certain benefits upon the involuntary termination of his employment
under certain circumstances, including acceleration of vesting benefits in connection with a change of control. For
additional information about these arrangements, see “Potential Payments Upon Termination or Change in
Control,” beginning on page 56.
Retention and Other Awards
Certain business conditions may warrant using additional compensation approaches to attract, retain or
motivate executives. Such conditions include acquisitions and divestitures, attracting or retaining specific or unique
talent, and recognition for exceptional contributions. In these situations, the Compensation Committee considers
the business needs and the potential costs and benefits of special rewards. No retention awards were provided to our
named executive officers in fiscal 2010 as the overall composition and amount of other reward elements was judged
to be sufficient to provide an appropriate incentive and retention level.
Other Benefits
All named executive officers are eligible to participate in our 401(k) plan (which includes our matching
contributions), health and dental coverage, life insurance, disability insurance, paid time off, and paid holidays on
the same terms as are available to all employees generally. These rewards are designed to be competitive with
overall market practices, and are in place to attract and retain the talent needed in the business. In addition, named
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