Symantec 2014 Annual Report Download - page 167

Performance-based restricted stock units and performance-contingent stock units
During the first quarters of fiscal 2014, 2013 and 2012, we granted PRUs to certain senior level employees
under our 2013 Plan and 2004 Plan. The PRU grants are in lieu of the stock option grants typically awarded as
part of our annual compensation program. These PRUs can be earned depending upon the achievement of a
company-specific performance condition and a market condition as follows: (1) our achievement of annual target
earnings per share for the applicable fiscal year and (2) our two and three-year cumulative relative total
shareholder return ranked against that of other companies that are included in the Standard & Poor’s 500 Index.
These PRUs are also subject to a three-year continued service vesting provision with earlier vesting permitted
under certain conditions, such as upon a change of control of the Company. The determination of the fair value of
these awards takes into consideration the likelihood of achievement of the market condition.
On March 19, 2014, Stephen M. Bennett, our former president and chief executive officer was terminated
from the Company. During fiscal 2014, we granted to him 782,414 PCSUs based on the achievement of specified
performance metrics. The PCSUs were also subject to an underlying continued service vesting condition. Each
performance metric was based on the average sixty day trailing closing price of Symantec’s common stock (the
“Closing Average Price”) over a three-year period beginning with the first quarter of fiscal 2014. Subject to
ratification by our board of directors, these awards were to vest and release for the fiscal year when the Closing
Average Price first exceeds $26.79, $30.01, and $33.61, respectively. Upon his resignation, Mr. Bennett became
entitled to 100% vesting of these awards in accordance with the terms and conditions of his employment
agreement. The awards are planned for release in the first quarter of fiscal 2015. The weighted-average grant date
fair value per share of PCSUs granted was $10.57 per share. The accelerated stock based compensation expense
related to these PCSUs was approximately $6 million.
During fiscal 2013, we granted 450,000 PCSUs to Mr. Bennett based on the achievement of specified
performance metrics, and subject to an underlying continued service vesting condition. Each performance metric
was based on the average twenty day trailing closing price of Symantec’s common stock (the “Average Closing
Price”) over a three-year period beginning with the second quarter of fiscal 2013. Upon achievement and
ratification by our board of directors, these awards were to be vested and released for the fiscal quarter when the
Average Closing Price first exceeds $18.00, $20.00, and $22.00, respectively. The price thresholds were achieved
during fiscal 2013. The first 150,000 PCSUs were released to Mr. Bennett during fiscal 2013, and the remaining
300,000 shares were released in the first quarter of fiscal 2014. The weighted-average grant date fair value per
share of PCSUs granted was $13.69 per share.
Valuation of stock-based awards
The following assumptions were used to estimate the fair value of stock awards:
Fiscal 2014 Fiscal 2013 Fiscal 2012
Stock Options:
Expected life - 3.5 years 3.8 years
Weighted-average expected volatility - 31% 35%
Weighted-average risk-free interest rate - 0.52% 1.62%
Expected dividends - - -
PRUs and PCSUs:
Expected life 0.6 - 2.9 years 2.6 - 2.9 years 2.8 - 2.9 years
Expected volatility 29% - 32% 31% - 32% 48% - 49%
Weighted-average expected volatility 32% 32% 49%
Risk-free interest rate 0.38% - 0.71% 0.36% - 0.38% 0.65% - 0.90%
Expected dividends 0% - 2.61% - -
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