Symantec 2016 Annual Report Download - page 160

Notes on the Company’s Consolidated Balance Sheets and are being amortized to interest expense over four
years. The fair value of the equity component of the Notes recorded in additional paid-in capital was $29 million.
The Notes are convertible into cash, shares of the Company’s common stock or a combination of cash and
common stock at the Company’s option, at any time prior to the maturity date at an initial conversion rate of
59.6341 per $1,000 principal amount of the Notes (which represents an initial conversion price of approximately
$16.77 per share). The conversion rate is subject to customary anti-dilution adjustments. The Notes are senior
unsecured obligations of the Company and rank equal in right of payment to all senior unsecured indebtedness of
the Company. As of April 1, 2016, the conversion price of the Notes remained approximately $16.77.
Holders of the Notes have the right to redeem the Notes for 100% of the principal plus accrued interest on or
after the fourth anniversary of the issuance date, or if a fundamental change or an event of default occurs. A
fundamental change, as defined in the indenture governing the Notes, includes a sale of substantially all the
Company’s assets, a change of the control of the Company, or a plan for the Company’s liquidation or
dissolution. If holders of the Notes convert them in connection with a fundamental change, the Company may be
required to provide a make whole premium in the form of an increased conversion rate, subject to a maximum
amount, based on the effective date of the fundamental change as set forth in a table contained in the indenture
governing the Notes. As long as the holders of the Notes own at least 4% of the Company’s common stock on an
as-converted basis, they are entitled to nominate one director to the Company’s board of directors. As of April 1,
2016, the holders’ percentage interest in the Company’s common stock exceeded this threshold.
The Company may redeem all or part of the principal of the Notes, at its option, at a purchase price equal to
the principal amount plus accrued interest on or after the fourth anniversary of the Issuance Date, if the closing
trading price of the Company’s common stock exceeds 150% of the then-current conversion price for 20 or more
trading days in the 30 consecutive trading-day period preceding the Company’s exercise of the redemption right
(including the last three such trading days) and provided that the Company has on file with the Securities and
Exchange Commission an effective shelf registration statement on Form S-3 for the Company’s common stock.
Upon conversion, the Company has the intent and the current ability to pay the holders the cash value of the
applicable number of shares of the Company’s common stock, up to the principal amount and accrued and paid
interest of the Notes.
Revolving credit facility
In fiscal 2011, we entered into a $1.0 billion senior unsecured revolving credit facility, which was amended
in fiscal 2013. The amendment extended the term of the credit facility to June 7, 2017 and revolving loans under
the credit facility will bear interest, at our option, either at a rate equal to a) London InterBank Offered Rate plus
a margin based on debt ratings, as defined in the credit facility agreement or b) the bank’s base rate plus a margin
based on debt ratings, as defined in the credit facility agreement. This revolving credit facility was further
amended in March 2016 to amend the definition of EBITDA (earnings before interest, taxes, depreciation and
amortization) to account for the sale of Veritas and related expenses and to amend our consolidated leverage ratio
under the agreement. Under the terms of this credit facility, we must comply with certain financial and non-
financial covenants, including a covenant to maintain a specified ratio of debt to EBITDA. As of April 1, 2016,
and April 3, 2015, we were in compliance with the required covenants, and no amounts were outstanding.
In May 2016, we replaced our existing $1.0 billion senior unsecured revolving credit facility with a new
$2.0 billion credit facility. See Note 13 for more information.
Note 6. Restructuring, Separation, and Transition
Our restructuring, separation, and transition costs and liabilities consist primarily of severance, facilities,
separation, transition and other related costs. Severance costs generally include severance payments,
outplacement services, health insurance coverage, and legal costs. Facilities costs generally include rent expense
and lease termination costs, less estimated sublease income. Separation and other related costs include advisory,
consulting and other costs incurred in connection with the separation of our information management business.
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