Symantec 2016 Annual Report Download - page 35

PROPOSAL NO. 3
AMENDMENTS TO OUR 2013 EQUITY INCENTIVE PLAN, AS AMENDED
We are asking stockholders to approve the following amendments to our 2013 Equity Incentive Plan, as
amended (the “2013 Plan”), which were approved by our Board in August 2016: (i) increase the number of
shares reserved for issuance under the 2013 Plan by 17,000,000 shares, and (ii) require that each stock option and
stock appreciation right (“SAR”) granted under the 2013 Plan, other than a stock option or SAR granted in sub-
stitution for a stock option or SAR granted under a stock plan of a company acquired by the Company, shall be
subject to a minimum service vesting requirement of one year from the date of grant of the stock option or SAR.
Including the above proposed amendments, the 2013 Plan, as amended, contains the following important
features:
‰62,000,000 shares of our common stock will be reserved for issuance under the 2013 Plan, which repre-
sents approximately 10.1% of our outstanding shares as of July 21, 2016. Of this amount, with the
17,000,000 share increase, approximately 27.7 million shares will be available for future issuance under
the 2013 Plan, which represents approximately 4.5% of our outstanding shares as of July 21, 2016.
‰The 2013 Plan has a fixed number of shares available for issuance. It is not an “evergreen” plan.
‰The 2013 Plan does not contain a “fungible share reserve.” Instead, each one share granted as a restricted
stock award, RSU (including PRUs), stock option or SAR under the 2013 Plan will count as the issuance
of one share reserved for issuance under the 2013 Plan for the purpose of computing shares remaining
available for issuance.
‰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 or certain other exchanges of stock options and SARs for new 2013 Plan awards or cash is
prohibited unless stockholder approval is first obtained.
‰Stock options and SARs granted under the 2013 Plan, other than a stock option or SAR granted in sub-
stitution for a stock option or SAR granted under a stock plan of a company acquired by the Company,
will be subject to a minimum service vesting requirement of one year from the date of the grant of the
stock option or SAR.
‰No recycling of shares or “liberal share counting” practices are permitted under the 2013 Plan. Shares
tendered to us or retained by us in the exercise or settlement of an award or for tax withholding, or shares
that are repurchased on the open market with the proceeds of an option exercise price will not become
available again for issuance under the 2013 Plan. In addition, the gross shares subject to a stock apprecia-
tion right (SAR) award and not the net number of shares actually issued upon exercise of such SAR
counts against the 2013 Plan reserve.
We believe that the increase in the number of shares reserved for issuance under the 2013 Plan is in the best
interests of our company because of the continuing need to provide 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 2013 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 employ-
ees. In addition, awards under the 2013 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.
Based on a review of Symantec’s historical practice, the recent trading price of our common stock, and
advice from its independent compensation consultant, the Compensation Committee and the Board currently
believe the additional share request will be sufficient to cover awards for at least one year. Our future burn rate
will depend on a number of factors, including the number of participants in the 2013 Plan, the price per share of
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