<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
SYMANTEC CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[LOGO]
10201 TORRE AVENUE
CUPERTINO, CALIFORNIA 95014-2132
------------------------
JULY 29, 1996
------------------------
Dear Stockholder:
An Annual Meeting of Stockholders of Symantec Corporation, a Delaware
corporation ("Symantec"), and holders of exchangeable shares of Delrina
Corporation, a wholly owned subsidiary of Symantec, each of which is
exchangeable for one share of Symantec Common Stock (the "Exchangeable Shares"),
will be held at Symantec Corporation, 10201 Torre Avenue, Cupertino, California,
on September 25, 1996 at 9:00 a.m. (Pacific time) (the "Meeting").
At the Meeting, you will be asked to (a) elect six directors to Symantec's
Board of Directors, each to hold office until his successor is elected and
qualified or until his earlier resignation or removal, (b) vote upon a proposal
to amend Symantec's 1996 Equity Incentive Plan (the "96 Plan") to make available
for issuance thereunder an additional number of shares of Symantec Common Stock
equal to the number of options previously granted pursuant to Symantec's
terminated 1988 Option Plan that expire, are cancelled or become unexercisable
for any reason without having been exercised in full, provided that such
additional number does not exceed 1,336,373, which will raise the 96 Plan's
limit on shares that may be issued pursuant to awards granted thereunder from
2,741,573 to 4,077,946 so that the 96 Plan is able to accommodate the increase
in shares caused by the cancellation or expiration of options under the 1988
Option Plan, (c) vote upon a proposal to amend Symantec's 1989 Employee Stock
Purchase Plan (the "Stock Purchase Plan") to (i) increase by 1,400,000 shares
(from 2,000,000 to 3,400,000) the number of shares of Symantec Common Stock
reserved for issuance thereunder and (ii) amend the employee eligibility
requirements so that persons who are employed by Symantec on the third business
day before the beginning of an offering period and meet the other eligibility
requirements are eligible to participate, and (d) ratify the selection of Ernst
& Young LLP as Symantec's independent auditors for the current fiscal year.
After careful consideration, your Board of Directors unanimously recommends that
you vote for the six nominees for director, in favor of the proposal to amend
the 96 Plan, in favor of the proposal to amend the Stock Purchase Plan and in
favor of the proposal to ratify the selection of independent auditors.
Although the enclosed Proxy Statement describes proposals of Symantec
Corporation, the holders of Exchangeable Shares are entitled to vote at the
Meeting due to the economic equivalence of the Exchangeable Shares to shares of
Symantec Common Stock, as described in that certain Joint Management Information
Circular and Proxy Statement distributed to the holders of Exchangeable Shares
and the holders of Symantec Common Stock on October 17, 1995. Holders of
Exchangeable Shares are entitled to the same rights, benefits and privileges,
including voting rights, as the holders of Symantec Common Stock, and are
therefore urged to exercise their votes at the Meeting.
In the material accompanying this letter, you will find a Notice of Annual
Meeting of Stockholders and a Proxy Statement relating to the actions to be
taken by Symantec stockholders and the holders of Exchangeable Shares at the
Meeting. The Proxy Statement more fully describes the matters for consideration
at the Meeting.
<PAGE>
All stockholders are cordially invited to attend the Meeting in person.
However, whether or not you plan to attend the Meeting, please complete, sign,
date and return your proxy in the enclosed envelope. If you attend the Meeting,
you may vote in person if you wish, even though you have previously returned
your proxy. It is important that your shares be represented and voted at the
Meeting.
Sincerely,
/s/ GORDON E. EUBANKS, JR.
Gordon E. Eubanks, Jr.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
<PAGE>
[LOGO]
10201 TORRE AVENUE
CUPERTINO, CALIFORNIA 95014
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
------------------------
To our Stockholders:
An Annual Meeting of Stockholders (the "Meeting") of Symantec Corporation, a
Delaware corporation ("Symantec") and holders of exchangeable shares of Delrina
Corporation, a wholly owned subsidiary of Symantec, will be held at 9:00 a.m.
(Pacific time) September 25, 1996, at Symantec Corporation, 10201 Torre Avenue,
Cupertino, California, for the following purposes:
1. To elect six directors to Symantec's Board of Directors, each to
hold office until his successor is elected and qualified or until his
earlier resignation or removal.
2. To vote upon a proposal to amend Symantec's 1996 Equity Incentive
Plan (the "96 Plan") to make available for issuance thereunder an additional
number of shares of Symantec Common Stock equal to the number of options
previously granted pursuant to Symantec's terminated 1988 Option Plan that
expire, are cancelled or become unexercisable for any reason without having
been exercised in full, provided that such additional number does not exceed
1,336,373, which will raise the 96 Plan's limit on shares that may be issued
pursuant to awards granted thereunder from 2,741,573 to 4,077,946 so that
the 96 Plan is able to accommodate the increase in shares caused by the
cancellation or expiration of options under the 1988 Option Plan.
3. To vote upon a proposal to amend Symantec's 1989 Employee Stock
Purchase Plan to (i) increase by 1,400,000 shares (from 2,000,000 to
3,400,000) the number of shares of Symantec Common Stock reserved for
issuance thereunder and (ii) amend the employee eligibility requirements so
that persons who are employed by Symantec on the third business day before
the beginning of an offering period and meet the other eligibility
requirements are eligible to participate.
4. To ratify the selection of Ernst & Young LLP as Symantec's
independent auditors for the current fiscal year.
5. To transact such other business as may properly come before the
Meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement that accompanies this Notice.
<PAGE>
Only stockholders of record as of July 28, 1996 are entitled to notice of
and will be entitled to vote at this meeting or any adjournment thereof.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ DEREK P. WITTE
Derek P. Witte
VICE PRESIDENT, SECRETARY AND GENERAL
COUNSEL
Cupertino, California
July 29, 1996
TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE MEETING, YOU ARE URGED TO
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE
POSTAGE-PAID ENVELOPE PROVIDED, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
YOUR PROXY CAN BE REVOKED BY YOU AT ANY TIME BEFORE IT IS VOTED.
<PAGE>
PROXY STATEMENT
This Proxy Statement is being furnished to (i) holders of common stock, par
value $0.01 per share ("Common Stock"), of Symantec Corporation, a Delaware
corporation ("Symantec") and (ii) holders of exchangeable shares ("Exchangeable
Shares") of Delrina Corporation, a wholly owned subsidiary of Symantec, in
connection with the solicitation of proxies by Symantec's Board of Directors for
use at an annual meeting of Symantec stockholders (the "Symantec Stockholders
Meeting") to be held at 9:00 a.m. (Pacific time) on September 25, 1996 at
Symantec Corporation, 10201 Torre Avenue, Cupertino, California, and any
adjournment or postponement thereof.
This Proxy Statement and the accompanying forms of proxy are first being
mailed to stockholders of Symantec and holders of Exchangeable Shares on or
about July 29, 1996.
All information in this Proxy Statement relating to Symantec has been
supplied by Symantec.
------------------------
No person is authorized to give any information or to make any
representation not contained in this Proxy Statement and, if given or made, such
information or representation should not be relied upon as having been
authorized. This Proxy Statement does not constitute an offer to sell, or a
solicitation of an offer to purchase, any securities, or the solicitation of a
proxy, by any person in any jurisdiction in which such an offer or solicitation
is not authorized or in which the person making such offer or solicitation is
not qualified to do so or to any person to whom it is unlawful to make such an
offer or solicitation of an offer or proxy solicitation. Neither delivery of
this Proxy Statement nor any distribution of the securities referred to in this
Proxy Statement shall, under any circumstances, create an implication that there
has been no change in the information set forth herein since the date of this
Proxy Statement.
i
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----------
<S> <C>
THE ANNUAL SYMANTEC STOCKHOLDERS MEETING -- GENERAL PROXY INFORMATION..................................... 1
Solicitation and Voting of Proxies...................................................................... 1
Revocability of Proxy................................................................................... 1
Expenses of Proxy Solicitation.......................................................................... 1
Voting Rights........................................................................................... 1
DIRECTORS AND MANAGEMENT.................................................................................. 2
Directors and Executive Officers........................................................................ 2
Security Ownership of Certain Beneficial Owners and Management.......................................... 5
Compensation of Executive Officers...................................................................... 7
Certain Transactions.................................................................................... 16
THE PROPOSALS............................................................................................. 18
Proposal No. 1 -- Election of Symantec Directors........................................................ 18
Proposal No. 2 -- Approval of Amendment to Symantec's 1996 Equity Incentive Plan........................ 19
Proposal No. 3 -- Approval of Amendment to Symantec's 1989 Employee Stock Purchase Plan................. 24
Proposal No. 4 -- Ratification of Selection of Independent Auditors..................................... 29
DISSENTING STOCKHOLDERS' RIGHTS........................................................................... 29
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE................................................... 29
STOCKHOLDER PROPOSALS..................................................................................... 29
OTHER BUSINESS............................................................................................ 29
AVAILABLE INFORMATION..................................................................................... 29
ANNEX A -- Symantec's 1996 Equity Incentive Plan
ANNEX B -- Symantec's 1989 Employee Stock Purchase Plan
</TABLE>
ii
<PAGE>
THE ANNUAL SYMANTEC STOCKHOLDERS MEETING --
GENERAL PROXY INFORMATION
SOLICITATION AND VOTING OF PROXIES
The accompanying proxy is solicited on behalf of Symantec's Board of
Directors for use at the annual Symantec Stockholders Meeting, to be held at
Symantec Corporation 10201 Torre Avenue, Cupertino, California, on September 25,
1996 at 9:00 a.m. (Pacific time). Only holders of record of (i) Symantec Common
Stock or (ii) Exchangeable Shares, at the close of business on July 28, 1996
(the "Record Date") will be entitled to vote at the Symantec Stockholders
Meeting. At the close of business on that date, there were outstanding and
entitled to vote (i) 49,648,318 shares of Symantec Common Stock and (ii)
5,079,148 Exchangeable Shares. The sum of the shares requested for issuance
under the 1996 Equity Incentive Plan (the "96 Plan") and the shares requested
for issuance under the 1989 Employee Stock Purchase Plan (the "Stock Purchase
Plan") does not exceed 5% of the sum of the outstanding shares of Symantec
Common Stock and the outstanding Exchangeable Shares. Each share of Symantec
Common Stock and each Exchangeable Share will be entitled to one vote on each
matter to be acted upon (the "Proposals"). See "STOCKHOLDER PROPOSALS." A
majority, or 27,363,734, of these shares, present in person or by proxy, will
constitute a quorum for the transaction of business. Abstentions and broker
non-votes will be considered to be represented for purposes of a quorum. This
Proxy Statement and the accompanying form of proxy were first mailed to Symantec
stockholders and the holders of the Exchangeable Shares on or about July 29,
1996.
REVOCABILITY OF PROXY
A stockholder who has given a proxy may revoke it at any time before it is
exercised at the Symantec Stockholders Meeting, by (i) delivering to the
Secretary of Symantec (by any means, including facsimile) a written notice
stating that the proxy is revoked, (ii) signing and so delivering a proxy
bearing a later date or (iii) attending the Symantec Stockholders Meeting and
voting in person (although attendance at the Symantec Stockholders Meeting will
not, by itself, revoke a proxy). Please note, however, that if a stockholder's
shares are held of record by a broker, bank, or other nominee and that
stockholder wishes to vote at the Symantec Stockholders Meeting, the stockholder
must bring to the Symantec Stockholders Meeting a letter from the broker, bank
or other nominee confirming the stockholder's beneficial ownership of the shares
to be voted.
EXPENSES OF PROXY SOLICITATION
The expenses of soliciting proxies to be voted at the Symantec Stockholders
Meeting will be paid by Symantec. Following the original mailing of the proxies
and other soliciting materials, Symantec and/or its agents also may solicit
proxies by mail, telephone, telegraph or in person. Symantec has retained a
proxy solicitation firm, Corporate Investor Communications, Inc. ("CIC"), to aid
it in the solicitation process. Symantec will pay that firm a fee equal to
$6,500, plus expenses. Following the original mailing of the proxies and other
soliciting materials, Symantec will request brokers, custodians, nominees and
other record holders of Symantec Common Stock and the Exchangeable Shares to
forward copies of the proxy and other soliciting materials to persons for whom
they hold shares of Symantec Common Stock or Exchangeable Shares and to request
authority for the exercise of proxies. In such cases, Symantec, upon the request
of the record holders, will reimburse such holders for their reasonable
expenses.
VOTING RIGHTS
Holders of Symantec Common Stock and holders of Exchangeable Shares are
entitled to one vote for each share held as of the Symantec Record Date.
Delaware law does not require, and Symantec's Restated Certificate of
Incorporation does not provide for, cumulative voting. Directors will be elected
by a plurality of the votes of the shares present in person or represented by
proxy at the Symantec Stockholders Meeting and entitled to vote in the election
of directors. With regard to the election of directors, votes that are withheld
will be excluded from the vote and will have no effect. Approval of the
amendment to the 96 Plan, the amendment to the Stock Purchase Plan and
ratification of the selection of independent auditors will each require the
affirmative vote of the holders of a majority of
1
<PAGE>
the shares present (in person or by proxy) and entitled to vote at the Symantec
Stockholders Meeting at which a quorum of at least a majority of the Symantec
Common Stock and the Exchangeable Shares issued, outstanding and entitled to
vote, is present.
Symantec will count abstentions in tabulations of votes cast, and an
abstention, therefore, will have the same effect as a vote against the proposal
to amend the 96 Plan, the proposal to amend the Stock Purchase Plan and the
proposal to ratify the independent auditors. Under Delaware case law, broker
non-votes are counted for purposes of determining whether a quorum is present at
the meeting but are not counted for purposes of determining whether a proposal
has been approved. Thus, a broker non-vote will not count as shares voting "for"
or "against" with respect to the Proposals and will not be considered as shares
entitled to vote on the Proposal for purposes of determining whether the
Proposals have been approved.
DIRECTORS AND MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The directors, executive officers and key employees of Symantec are as
follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------- --- -----------------------------------
<S> <C> <C>
Gordon E. Eubanks, Jr. 49 President, Chief Executive Officer
and Director
Robert R. B. Dykes 47 Executive Vice President, Worldwide
Operations and Chief Financial
Officer
John C. Laing 45 Executive Vice President, Desktop
Products
Mark W. Bailey 37 Senior Vice President, Business
Development
Ted Schlein 32 Vice President, Networking and
Client/Server Technology
Derek P. Witte 39 Vice President, General Counsel and
Secretary
Dana E. Siebert 36 Vice President, Worldwide Sales
Christopher Calisi 36 Vice President, Communication
Products
Carl D. Carman (2) 60 Director, Chairman of the Board
Walter W. Bregman (1) 62 Director
Robert S. Miller (1) 54 Director
Leslie L. Vadasz (2) 59 Director
Charles M. Boesenberg 48 Director
</TABLE>
- ------------------------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
GORDON E. EUBANKS, JR. is the President and Chief Executive Officer of
Symantec. He has served as a director of Symantec since November 1983 and as the
President and Chief Executive Officer of Symantec since October 1986. Mr.
Eubanks also served as Symantec's Chairman of the Board from November 1983 to
October 1986 and from November 1990 to January 1993. Previously, Mr. Eubanks was
Vice President of Digital Research Inc.'s commercial systems division where he
was responsible for the development and marketing of all system software
products. He left Digital Research in September 1983. Mr. Eubanks founded
Compiler Systems, Inc. and authored its products: CBASIC, one of the first
successful languages on personal computers, and CB80, a compiled version of
CBASIC. Compiler Systems was acquired by Digital Research in August of 1981. Mr.
Eubanks received his Bachelor of Science degree in Electrical Engineering from
Oklahoma State University. He received his Masters degree in Computer Science
from Naval Postgraduate School in Monterey, California.
2
<PAGE>
Mr. Eubanks was a commissioned officer in the United States Navy from 1970 to
1979 serving in the Nuclear Submarine Force. Mr. Eubanks is also a director of
NetFrame and RasterOps Corporation. He is a member of the IEEE and ACM.
On February 26, 1993, criminal indictments were filed against Mr. Eubanks
for allegedly violating various California Penal Code Sections relating to the
misappropriation of trade secrets and unauthorized access to a computer system.
Symantec believes that the charges have no merit.
ROBERT R. B. DYKES is Executive Vice President, Worldwide Operations and
Chief Financial Officer. Mr. Dykes joined Symantec in October 1988. From April
1984 to October 1988, Mr. Dykes was the Chief Financial Officer at Adept
Technology, Inc., a robotics firm where he oversaw all financial procedures and
reporting and developed venture capital and funding strategies. From July 1983
to April 1984, Mr. Dykes was with Xebec, a publicly held Winchester disk drive
controller manufacturer, most recently as Chief Financial Officer. Prior to
Xebec, Mr. Dykes spent 12 years in various financial positions at Ford Motor
Company in New Zealand and Australia and with its Finance Staff in Dearborn,
Michigan, most recently as manager of the marketing budgets for the Ford and
Lincoln Mercury car divisions. Mr. Dykes holds a Bachelor of Commerce and
Administration degree from Victoria University in Wellington, New Zealand. Mr.
Dykes is on the board of directors of Flextronics International, Ltd.
JOHN C. LAING is Executive Vice President, Desktop Products. Prior to this
position, Mr. Laing served as Executive Vice President, Worldwide Sales. Mr.
Laing joined Symantec in March 1989 as Vice President/Sales. Before joining
Symantec, Mr. Laing served as Regional Director for Apple Computer, Inc., a
microcomputer manufacturer, in the Midwest. In that position his
responsibilities included managing Apple's sales, marketing and support
activities within Illinois, Wisconsin and Northern Indiana. Prior to joining
Apple in July 1986, Mr. Laing served as Vice President and General Manager at
ECZEL Corporation, a division of Crown Zellerbach Corporation. Mr. Laing spent
the majority of his earlier career at Xerox Corporation, where he served in a
variety of sales and sales management positions over a ten-year period. Mr.
Laing is a director of Macromedia, Inc., a multimedia software developer.
MARK W. BAILEY is Senior Vice President, Business Development. Mr. Bailey
has led Symantec's mergers and acquisitions effort since December 1989. Prior to
that, Mr. Bailey was an associate partner with one of the early investors in
Symantec, Kleiner Perkins Caufield & Byers. Before attending graduate school,
Mr. Bailey worked at Hewlett Packard. Mr. Bailey received a Bachelor of Science
degree cum laude in electrical engineering and computer science from Princeton
University and an MBA from Harvard University's Graduate School of Business
Administration.
TED SCHLEIN is Vice President, Networking and Client/Server Technology
Group. Prior to this position, Mr. Schlein was Vice President and General
Manager, Client/Server Technology Group. Mr. Schlein has been an employee of
Symantec since June 1986, and during that time, he has served in a variety of
management positions including Vice President, European Business Development;
Vice President, Data Management Group; and Director, Utilities Group. He holds a
Bachelor of Science degree in economics from the University of Pennsylvania.
DEREK P. WITTE is Vice President, General Counsel and Secretary. Mr. Witte
joined Symantec in October 1990. From October 1987 until joining Symantec, Mr.
Witte was Associate General Counsel and later Director of Legal Services for
Claris Corporation, a software subsidiary of Apple. Between January and October
1987, Mr. Witte was Assistant General Counsel at Worlds of Wonder, Inc.
Previously, Mr. Witte practiced law with the San Francisco based law firms of
Brobeck, Phleger & Harrison and Heller Ehrman White & McAuliffe during the
periods between 1981 and 1983 and 1983 and 1987, respectively. Mr. Witte holds a
law degree and a Bachelor of Arts degree in Economics from the University of
California at Berkeley. Mr. Witte has been a member of the California bar since
1981.
DANA E. SIEBERT is Vice President, Worldwide Sales. Previously, Mr. Siebert
served as Vice President, Worldwide Services at Symantec. Mr. Siebert joined
Symantec in September 1987. From 1985 to
3
<PAGE>
1987, Mr. Siebert was a Sales Manager at THINK Technologies where he was
responsible for U.S. corporate, OEM and international sales. Previously, Mr.
Siebert held a number of sales management positions in high technology companies
including Wang Laboratories, Computerland Corporation and Burroughs Corporation.
Mr. Siebert holds a Bachelor of Science degree in business administration from
the University of New Hampshire.
CHRISTOPHER CALISI is Vice President, Communication Products. From 1992 to
1996, Mr. Calisi held several positions within Symantec's Remote Access Business
Unit including, Development Manager, Director of Development and most recently,
General Manager. Mr. Calisi joined Symantec in 1992 from Unify Corporation, a
relational database and 4GL tools vendor where he served as the Manager of Sales
Engineers. Prior to Unify, Mr. Calisi held development positions with several
relational database vendors including Britton Lee, Oracle and Computer
Associates. Mr. Calisi holds a Bachelor of Science degree from the State
University of New York at Empire State and has received executive training at
the Wharton School. Mr. Calisi holds several copyrights for software innovations
from 1981 through 1986 and is an associate of the IEEE Committee. Mr. Calisi
became an executive officer of Symantec in May 1996.
CARL D. CARMAN has been a director of Symantec since May 1984. Mr. Carman
was appointed as Symantec's Chairman of the Board in January 1993. Mr. Carman
first became a director of Symantec when he was elected to represent Masters
Fund, a venture capital firm, on the Board. Mr. Carman has been a partner in
Hill, Carman Ventures, a venture capital firm, since April 1989. Mr. Carman has
also been a partner in Masters Fund since October 1983. Prior to founding
Masters Fund in October 1983, he served from October 1979 to October 1983 as a
Vice President of Research and Development and then as Executive Vice President
of Technology at NBI, an office automation manufacturing company. Prior to that,
Mr. Carman was the Vice President of Engineering at Data General Corporation.
Mr. Carman is a director of Spectralink Corp. He holds a Bachelor of Science
degree in Engineering from the University of Kentucky.
WALTER W. BREGMAN has been a director of Symantec since his appointment by
the Board in October 1988. Mr. Bregman has been Chairman and co-CEO of S&B
Enterprises, a consulting firm, since March 1988, and since December 1992 has
been President and CEO of Golf Scientific, Inc., a company which produces and
sells golf instructional equipment. From July 1985 until June 1987, Mr. Bregman
was President and owner of the Cormorant Beach Club. During the period from
March 1979 through February 1985, Mr. Bregman was President, Playtex U.S.;
President, Playtex Products; President, International Playtex, Inc.; member of
the Board, Senior Vice President, Esmark; and Senior Vice President, Beatrice
Inc. He has also been Vice President of Marketing and Advertising of Gallo
Winery and President of NCK, Inc., an advertising agency in Europe. Mr. Bregman
holds a Bachelor of Arts in English from Harvard College. Mr. Bregman is also a
director and Chairman of the Board of RasterOps Corporation.
ROBERT S. MILLER has been a director of Symantec since his appointment by
the Board in September of 1994. Mr. Miller currently devotes substantially all
of his time to his duties as Chairman of the Board of Morrison-Knudsen
Corporation, and the remainder of his time to performing his duties as a
director of a number of other large corporations. From April 1992 until February
1993 he was a senior partner at James D. Wolfensohn, Inc., a New York investment
banking firm. From 1979 until March 1992, he was an executive of Chrysler
Corporation, where he served in various capacities, including as Vice Chairman
of the Board and Chief Financial Officer. Mr. Miller holds a Bachelor of Arts in
Economics from Stanford University, a law degree from Harvard Law School and a
Masters of Business Administration from Stanford University's Graduate School of
Business. In addition to serving as the Chairman of the Board of
Morrison-Knudsen Corporation, Mr. Miller is also a director of Fluke Corp., MK
Rail Corp., Federal Mogul Corporation, Pope & Talbot Inc. and Coleman Company.
LESLIE L. VADASZ has been a director of Symantec since his appointment by
the Board in June 1991. Mr. Vadasz is Senior Vice President of Intel Corporation
and has been an employee of Intel since it was founded in 1968. Mr. Vadasz has
held a variety of Engineering Management and General
4
<PAGE>
Management roles, and currently is Director of Corporate Business Development of
Intel. Mr. Vadasz holds a Bachelor of Science in Electrical Engineering from
McGill University and is a fellow of the IEEE. Mr. Vadasz is also a director of
Intel Corporation.
CHARLES M. BOESENBERG has been a director of Symantec since June 16, 1994,
and provided certain consulting services to Symantec from January 1995 through
December 1995. Mr. Boesenberg is currently the President and Chief Executive
Officer of Ashtech, Inc., a position that he assumed in January 1995. Mr.
Boesenberg was an Executive Vice President of Symantec from June 1, 1994, when
Symantec acquired Central Point Software, Inc. and continued in that capacity
until December 1994. In February of 1992, Mr. Boesenberg joined Central Point as
its President and Chief Operating Officer, and was elected as its Chief
Executive Officer and Chairman in March 1992, and continued in those positions
until the acquisition of Central Point by Symantec. From February 1989 to June
1991, Mr. Boesenberg was the Executive Vice President, Marketing of MIPS
Computers Systems, Inc., a semiconductor and computer systems company, and from
July 1991 to January 1992, he was the President of that company. From February
1987 to February 1991, Mr. Boesenberg was the Senior Vice President of U.S.
Sales and Marketing at Apple Computer. Mr. Boesenberg holds a Bachelor of
Science in mechanical engineering from Rose Hulman Institute of Technology and
an Master of Science in business administration from Boston University. Mr.
Boesenberg is also a director of AER Energy Resources Inc. and Merix
Corporation.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of July 15, 1996,
with respect to the beneficial ownership of Symantec Common Stock by (i) each
stockholder known by Symantec to be the beneficial owner of more than 5% of
Symantec Common Stock, (ii) each director of Symantec, (iii) the four most
highly compensated executive officers and the CEO of Symantec as calculated with
respect to the fiscal year ended March 31, 1996, and (iv) all current executive
officers and directors of Symantec as a group.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP (1) OF CLASS (2)
- ------------------------------------------------------------------------- ------------- -------------
<S> <C> <C>
AIM Management Group, Inc. .............................................. 3,150,100 5.76%
P.O. Box 4333
Houston, Texas 77210 (3)
Gordon E. Eubanks, Jr. (4)............................................... 441,786 *
John C. Laing (5)........................................................ 207,950 *
Carl D. Carman (6)....................................................... 121,250 *
Robert R.B. Dykes (7).................................................... 115,410 *
Mark W. Bailey (8)....................................................... 106,551 *
Charles M. Boesenberg (9)................................................ 96,784 *
Leslie L. Vadasz (10).................................................... 85,750 *
Walter W. Bregman (11)................................................... 80,750 *
Dana E. Siebert (12)..................................................... 33,394 *
Robert S. Miller (13).................................................... 28,000 *
All current Symantec executive officers and directors as a group (13
persons) (14)........................................................... 1,457,798 2.60%
</TABLE>
- ------------------------
* Less than 1%.
(1) The information above is based upon information supplied by officers and
directors, and, with respect to principal stockholders, Schedules 13G and
13D (if any) filed with the SEC. Unless
5
<PAGE>
otherwise indicated below, the persons named in the table had sole voting
and sole investment power with respect to all shares beneficially owned,
subject to community property laws where applicable.
(2) Based on 54,726,783 voting shares, which is the sum of the issued and
outstanding shares of Symantec Common Stock and the issued and outstanding
Exchangeable Shares as of July 15, 1996.
(3) Based on information provided by AIM Management to Symantec in a Schedule
13G dated February 12, 1996.
(4) Includes 316,666 shares subject to options exercisable within 60 days of
July 15, 1996.
(5) Includes 192,625 shares subject to options exercisable within 60 days of
July 15, 1996.
(6) Includes 121,250 shares subject to options exercisable within 60 days of
July 15, 1996.
(7) Represents 59,584 shares subject to options exercisable within 60 days of
July 15, 1996.
(8) Represents 103,332 shares subject to options exercisable within 60 days of
July 15, 1996.
(9) Represents 93,786 shares subject to options exercisable within 60 days of
July 15, 1996.
(10) Includes 85,750 shares subject to options exercisable within 60 days of
July 15, 1996.
(11) Includes 75,750 shares subject to options exercisable within 60 days of
July 15, 1996.
(12) Includes 32,708 shares subject to options exercisable within 60 days of
July 15, 1996.
(13) Includes 28,000 shares subject to options exercisable within 60 days of
July 15, 1996.
(14) Includes 1,217,577 shares subject to options exercisable within 60 days of
July 15, 1996, including the options described in notes (3)-(13).
6
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth all compensation awarded, earned or paid for
services rendered in all capacities to Symantec and its subsidiaries during each
of the fiscal years ended on or about March 31, 1994, 1995 and 1996 to
Symantec's Chief Executive Officer and Symantec's four most highly compensated
executive officers, other than the Chief Executive Officer, during the fiscal
year ended March 31, 1996. This information includes the dollar values of base
salaries, bonus awards, the number of stock options granted and certain other
compensation, if any, whether paid or deferred. Symantec does not grant stock
appreciation rights and has no other long term compensation benefits.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM
----------------------------------------------- COMPENSATION
OTHER ------------------------
ANNUAL STOCK ALL OTHER
SALARY BONUS COMPENSATION OPTIONS COMPENSATION
NAME & PRINCIPAL POSITION YEAR ($) ($) ($) (#) ($)
- ---------------------------------------- ---- ---------- ---------- --------------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Gordon E. Eubanks....................... 1996 350,000 118,150(2) 4,571(3) 220,000 10,527(4)
President and Chief 1995 350,000 187,842 1,940(3) 0 15,509(4)
Executive Officer 1994 329,167 116,470 5,500(3) 200,000 16,671(4)
Robert R.B. Dykes....................... 1996 300,000 83,784(2) 3,249(3) 60,000 4,349(5)
EVP World-Wide 1995 296,667 109,514 3,249(3) 30,000 3,210(5)
Operations & CFO 1994 270,833 81,516 9,898(3) 110,000 3,690(5)
John C. Laing........................... 1996 291,585(1) 39,942(2) 2,011(3) 60,000 29,824(6)
EVP Desktop Utilities 1995 337,669(1) 47,882 825(3) 23,000 29,390(6)
1994 338,711(1) 35,843 2,981(3) 20,000 30,669(6)
Mark W. Bailey.......................... 1996 276,667 84,311(2) 1,837(3) 50,000 4,544(7)
Sr. VP Business Development 1995 256,667 84,553 1,837(3) 18,000 4,620(7)
1994 232,273 58,111 -- 60,000 4,620(7)
Dana E. Siebert......................... 1996 240,000 59,512(2) 27,287(3) 65,000 5,299(8)
VP Worldwide Sales 1995 195,000 80,378 1,388(3) 12,000 4,620(8)
1994 182,236 37,443 1,388(3) 36,425 4,620(8)
</TABLE>
- ------------------------
(1) Includes commissions of $142,044 and $137,669 and $91,585 respectively, for
each of 1994, 1995 and 1996.
(2) Bonuses were not paid to the executive staff during the fourth quarter of
the fiscal year ended March 31, 1996. Therefore, the bonuses reflected above
for the 1996 fiscal year are an aggregate of the first three quarters only.
See "Report of the Compensation Committee and Board on Executive
Compensation."
(3) Automobile allowance and with respect to Mr. Siebert, also includes $25,900
in relocation expenses for 1996.
(4) Includes $13,880 of interest forgiven in 1994, $12,361 of interest forgiven
in 1995 and $7,180 of interest forgiven in 1996; and also includes $2,791,
$3,148 and $3,347, respectively, of matching contributions to Symantec's
401(k) plan in 1994, 1995 and 1996.
(5) Consists of $3,690, $3,210 and $4,349, respectively of matching
contributions to Symantec's 401(k) plan in 1994, 1995 and 1996.
(6) Consists of $26,331 of mortgage assistance in each of 1994, 1995 and 1996,
and $4,338, $3,059 and $3,493, respectively, of matching contributions to
Symantec's 401(k) plan in 1994, 1995 and 1996.
(7) Includes approximately $4,620 of matching contributions to Symantec's 401(k)
plan in 1994 and 1995 and $4,544 in 1996.
(8) Includes approximately $4,620 of matching contributions to Symantec's 401(k)
plan in 1994 and 1995 and $5,299 in 1996.
7
<PAGE>
OPTION GRANTS IN FISCAL 1996
The following table sets forth further information regarding individual
grants of options to purchase Symantec Common Stock during the fiscal year ended
March 31, 1996 to each of the executive officers named in the Summary
Compensation Table above. All grants were made pursuant to the 1988 Option Plan.
In accordance with the rules of the SEC, the table sets forth the hypothetical
gains or "option spreads" that would exist for the options at the end of their
respective ten-year terms based on assumed annualized rates of compound stock
price appreciation of 5% and 10% from the dates the options were granted to the
end of the respective option terms. Actual gains, if any, on option exercises
are dependent on the future performance of Symantec's Common Stock and overall
market conditions. There can be no assurances that the potential realizable
values shown in this table will be achieved.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
INDIVIDUAL GRANTS AT ASSUMED ANNUAL RATES
---------------------------------------------------------- OF STOCK PRICE
# OF SHARES % OF TOTAL APPRECIATION
UNDERLYING OPTIONS GRANTED EXERCISE FOR OPTION TERM (3)
OPTIONS TO EMPLOYEES IN PRICE EXPIRATION ----------------------------
NAME GRANTED (1) FISCAL YEAR (2) ($/SHR) DATE 5% 10%
- ------------------------------------ ----------- ------------------- ----------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gordon Eubanks...................... 220,000 3.96% $ 10.3125 1/17/06 $ 1,426,804 $ 3,615,803
Robert Dykes........................ 60,000 1.08% $ 10.3125 1/17/06 $ 389,100 $ 986,128
John Laing.......................... 60,000 1.08% $ 10.3125 1/17/06 $ 389,100 $ 986,128
Mark Bailey......................... 50,000 .90% $ 10.3125 1/17/06 $ 324,250 $ 821,773
Dana Siebert........................ 65,000 1.17% $ 10.3125 1/17/06 $ 421,525 $ 1,068,305
</TABLE>
- ------------------------
(1) Stock options are granted with an exercise price equal to the fair market
value of Symantec Common Stock on the date of grant. These options were
granted under the 1988 Option Plan and generally become exercisable 25%
after the first year and ratably in monthly increments over the succeeding
three years. Options lapse after ten years or, if earlier, 90 days after
termination of employment.
(2) Symantec granted options on a total of 5,549,500 shares to employees and
consultants in fiscal 1996, of which 2,028,997 were granted as a result of a
cancellation and regrant of options at an exercise price of $13.10 under the
1988 Option Plan. None of the persons listed participated in the
cancellation and regrant of options (see "Report on Repricing of Options").
Percentages are based on the total of 5,549,500 options granted.
(3) The 5% and 10% assumed rates of annual compound stock price appreciation are
mandated by rules of the SEC and do not represent Symantec's estimate or
projection of future Symantec Common Stock prices.
8
<PAGE>
AGGREGATE OPTION EXERCISES IN FISCAL 1996 AND MARCH 29, 1996 OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF SHARES IN-THE-MONEY
UNDERLYING UNEXERCISED OPTIONS AT
OPTIONS MARCH 29, 1996
ACQUIRED ON VALUE AT MARCH 29, 1996 ($) (1)(2)
NAME EXERCISE (#) REALIZED ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- --------------------------------- ------------ ------------- ----------------------- ------------------------
<S> <C> <C> <C> <C>
Gordon Eubanks................... 105,000 $ 3,143,696 80,000/220,000 $ 250,000/$536,250
Robert Dykes..................... 100,000 $ 1,579,375 12,500/77,500 $ 28,125/$185,625
John Laing....................... 10,000 $ 200,000 171,521/74,979 $ 1,015,453/$179,172
Mark Bailey...................... 8,084 $ 165,743 49,416/60,500 $ 90,228/$145,500
Dana Siebert..................... 25,000 $ 520,021 6,720/72,000 $ 25,010/$174,188
</TABLE>
- ------------------------
(1) The valuations shown above for unexercised in-the-money options are based on
the difference between the option exercise price and the fair market value
of the stock on March 29, 1996 ($12.75 per share). These values have not
been, and may never be, realized.
(2) The value realized for option exercises is the aggregate fair market value
of Symantec Common Stock on the date of exercise less the exercise price.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
In December 1991, Symantec entered into agreements with each of Robert R.B.
Dykes, its Executive Vice President, Worldwide Operations and Chief Financial
Officer, and John C. Laing, its Executive Vice President, Desktop Products,
providing for certain benefits to such executives in the event their employment
is terminated without cause within one year after the occurrence of a merger,
consolidation or similar transaction that results in a change in control of
Symantec. "Change of control" includes (a) any consolidation or merger of
Symantec with or into any other corporation or corporations in which the
stockholders of Symantec immediately prior to the consolidation or merger do not
retain a majority of the voting power of the surviving corporation, (b) a change
in the majority of the Board resulting from any cash tender offer, exchange
offer, merger or other business combination, sale of assets or contested
election, or combination of the foregoing, or any sale of all or substantially
all of the assets of Symantec. If, within one year after a change in control,
Messrs. Dykes' or Laing's employment is terminated other than for cause or
disability, Messrs. Dykes and/or Laing, as the case may be, would be entitled to
receive severance pay equal to his base salary as of the date of such
termination in accordance with Symantec's normal payroll practices for a period
of one year, to have all unvested stock options become fully vested and
exercisable in accordance with their terms notwithstanding any vesting schedule
in such options to the contrary, and to have benefits provided to him as of the
date of such termination under Symantec's health, dental, life, disability and
other benefit plans continued for a period of one year. In addition, if any such
payments would be subject to the tax imposed by Section 4999 of the U.S. Code,
Messrs. Dykes and Laing would be entitled to receive additional amounts such
that the net amount of the payments and benefits, after deduction of taxes,
would be equal to the total aggregate original amount of the payments and
benefits payable.
On June 1, 1994, Symantec entered into an Employment and Consulting
Agreement with Charles M. Boesenberg (the "Employment Agreement") in connection
with the acquisition by Symantec of Central Point, which was subsequently
amended in December 1994. The Employment Agreement, as amended, provided for an
employment period which began June 1, 1994 and continued to December 31, 1994
(the "Initial Employment Period"), and a period during which Mr. Boesenberg
would act as a consultant to Symantec, beginning with the termination of his
employment and continuing until January 1, 1996 (the "Consulting Period"). Mr.
Boesenberg's base compensation during the Initial Employment Period was $235,000
per year; the base compensation during the Consulting Period was $360,000 per
year. Mr. Boesenberg's compensation for the Consulting Period reflects
compensation that would otherwise have been payable to Mr. Boesenberg under a
pre-existing agreement with Central Point Software, Inc. due to the change in
control of Central Point that was effected by Symantec's acquisition of Central
Point. Under the Employment Agreement, Mr. Boesenberg waived all rights to
receive compensation under that pre-existing agreement. In
9
<PAGE>
addition to base compensation, the Employment Agreement provided for Mr.
Boesenberg to receive bonuses of $31,250 per quarter in the Initial Employment
Period based on quarterly targets, and adjusted upward or downward based on a
formula relating to the revenue and expenses of Symantec's Central Point
business unit. The Employment Agreement also provided that each outstanding
option previously granted to Mr. Boesenberg by Central Point was immediately
exercisable for an additional number of shares equal to that number of shares
for which each such option would have become exercisable during the two years
after the date of the acquisition. The exercisability of these additional shares
reflects rights Mr. Boesenberg had under a pre-existing agreement with Central
Point due to the change in control of Central Point that was effected by
Symantec's acquisition of Central Point. The Employment Agreement also provides
that Mr. Boesenberg may not compete, directly or indirectly, with Symantec in
the area of computer utility software for a period of four years. During the
Consulting Period, Mr. Boesenberg has provided Symantec with advice on employee
compensation and has been substantially involved in assisting Symantec in
defending lawsuits arising from the business of Central Point.
REPORT ON REPRICING OF OPTIONS
The following table sets forth information regarding Symantec's repricing of
options since its initial public offering. On September 23, 1992, Symantec
repriced outstanding options resulting in an $11.00 exercise price, and on March
4, 1996, Symantec offered employees the opportunity to cancel and receive
regranted options at $13.10. With respect to the cancellation and regrant of
options occurring on March 4, 1996, Messrs. Eubanks, Dykes, Laing and Bailey
were not entitled to participate.
<TABLE>
<CAPTION>
MARKET
PRICE
OF
NUMBER OF STOCK LENGTH OF
SECURITIES AT EXERCISE ORIGINAL OPTION
UNDERLYING TIME OF PRICE AT NEW TERM REMAINING
OPTIONS REPRICING TIME OF EXERCISE AT DATE OF
NAME DATE REPRICED (#) ($) REPRICING ($) PRICE ($) REPRICING
- -------------------------------------------------- ------- ------------ ------- --------- --------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Gordon Eubanks.................................... 3/4/96 0 N/A N/A N/A N/A
9/23/92 0 N/A N/A N/A N/A
Robert Dykes...................................... 3/4/96 0 N/A N/A N/A N/A
9/23/92 0 N/A N/A N/A N/A
John Laing........................................ 3/4/96 0 N/A N/A N/A N/A
9/23/92 40,000 $11.00 $16.9375 $11.00 8 yrs, 122 days
75,000 $11.00 $ 39.125 $11.00 9 yrs, 217 days
Ted Schlein....................................... 3/4/96 0 N/A N/A N/A N/A
9/23/92 4,400 $11.00 $16.9375 $11.00 8 yrs, 122 days
11,000 $11.00 $ 24.00 $11.00 8 yrs, 214 days
16,000 $11.00 $ 28.25 $11.00 8 yrs, 354 days
Mark Bailey....................................... 3/4/96 0 N/A N/A N/A N/A
9/23/92 3,875 $11.00 $ 24.00 $11.00 8 yrs, 214 days
50,000 $11.00 $ 45.00 $11.00 9 yrs, 184 days
Derek Witte....................................... 3/4/96 6,400 $12.625 $ 17.25 $13.10(1) 9 yrs, 72 days
9/23/92 6,000 $11.00 $ 42.25 $11.00 9 yrs, 121 days
Dana Siebert...................................... 3/4/96 0 N/A N/A N/A N/A
9/23/92 7,050 $11.00 $16.9375 $11.00 8 yrs, 122 days
4,500 $11.00 $ 24.00 $11.00 8 yrs, 214 days
7,500 $11.00 $ 35.25 $11.00 9 yrs, 86 days
Christopher Calisi................................ 3/4/96 3,438 $12.625 $ 17.25 $13.10(1) 7 yrs, 195 days
12,600 $12.625 $ 22.00 $13.10(1) 9 yrs, 44 days
9/23/92 6,900 $11.00 $ 29.75 $11.00 9 yrs, 293 days
</TABLE>
- ------------------------
(1) The exercise price of $13.10 for regranted options was an average of the
closing prices of Symantec Common Stock as reflected on the Nasdaq National
Market during the 15 trading days prior to March 4, 1996.
10
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Symantec's Compensation Committee consisted of Walter W. Bregman and Leslie
L. Vadasz until October, 1995, when Carl D. Carman replaced Mr. Bregman. None of
Mr. Bregman, Mr. Carman nor Mr. Vadasz has ever been an officer of Symantec or
any of its subsidiaries, and none has any relationship requiring disclosure
under any paragraph of Item 404 of Regulation S-K.
REPORT OF THE COMPENSATION COMMITTEE AND BOARD ON EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE POLICY
The Compensation Committee (the "Committee") acts on behalf of the Board to
establish the general compensation policies for Symantec's executive officers,
including the salary levels and target bonuses for the Chief Executive Officer
("CEO") and other executive officers. The Committee also administers Symantec's
bonus programs. The Board administers awards to executive officers under the
Company's stock option plan. During Committee or Board meetings, all discussions
regarding compensation of the CEO are held without his attendance. Similarly,
none of the other named executive officers are present during discussions
regarding their compensation.
The Board and the Committee believe that the compensation of the CEO and
Symantec's other executive officers should be based to a substantial extent on
Symantec's performance. Consistent with this philosophy, a designated portion of
the compensation of each executive is contingent upon corporate performance and
adjusted where appropriate, based on an executive's performance against personal
performance objectives. Each executive officer's performance for the past fiscal
year and objectives for the current year are reviewed, together with the
executive's responsibility level and Symantec's fiscal performance versus
objectives and potential performance targets for the current year. When
establishing salaries, bonus levels and stock option awards for executive
officers, the Committee considers: (1) Symantec's financial performance during
the past year and recent quarters, (2) the individual's performance during the
past year and recent quarters, and (3) the salaries of executive officers in
similar positions of companies of comparable size and other companies within the
computer industry. With respect to executive officers other than the CEO, the
Committee places considerable weight upon the recommendations of the CEO. The
method for determining compensation varies from case to case based on a
discretionary and subjective determination of what is appropriate at the time.
Symantec's Human Resources department obtains from an independent consultant
executive compensation data from other high technology companies, including high
technology companies of a similar size, and in fiscal 1996 provided this data to
the Board and the Committee for their consideration in connection with the
determination of levels of compensation and stock option awards. The companies
included in the sample from which this data was derived included companies
present in the S&P High Tech Index (used for purposes of the returns data
presented in "Company Stock Price Performance" below), but the sample was not
intended to correlate with this index. For fiscal 1996, Symantec did not set
target compensation levels for executive compensation based on this survey, but
used this data for informational purposes only. Changes to compensation levels
were established based on discretionary judgments made by the Compensation
Committee and, with respect to executive officers other than the CEO, by the
CEO.
COMPENSATION OF EXECUTIVE OFFICERS DURING FISCAL 1996
During the fiscal year ended March 31, 1996, salaries for executive officers
began at levels established in the prior year. The salaries of Messrs. Dykes,
Laing and Schlein remained the same or increased moderately (less than 5%). The
salaries of Messrs. Bailey, Siebert and Witte increased more significantly
(between 10% and 23%) in recognition of increased responsibilities undertaken
during the period.
Prior to January 1, 1996, bonuses for Symantec's executive officers and the
executive staff were paid pursuant to the quarterly bonus program, as described
in the paragraph below. All of the
11
<PAGE>
company's executive officers, except for Mr. Witte, are on the executive staff
and report directly to Mr. Eubanks. Commencing with January 1, 1996, however,
bonuses for the executive staff will be paid on a calendar year basis. Under the
new calendar year bonus program, members of the executive staff will receive
bonuses at the end of the calendar year as determined by the Board of Directors
based on the recommendation of the CEO. Bonuses for executive staff will be
based on a combination of three performance variables: Symantec's growth in net
revenue and pre-tax profit as well as an individual's performance objectives.
Growth in net revenue is given a 50% weighting factor, pre-tax profit is given a
30% weighting factor and an individual's performance is given a 20% weighting
factor. For each variable, a rating from 0 to 2 is assigned, which is based on
the performance of Symantec or the individual. The rating is multiplied by the
percentage weighting factor. The sum of the three products determines what
portion of the individual's base salary is awarded as a bonus.
With respect to the first three quarters of fiscal 1996, bonuses for the
executive staff were determined in accordance with the quarterly bonus program.
Under the quarterly bonus program, a bonus pool is established pursuant to a
formula that is based on the company's financial performance. The pool for the
quarterly bonus program, plus a pool for non-management profit sharing is
increased, on a pro rata basis, by a percentage of operating income in excess of
Symantec's plan for the quarter, and is reduced if operating income falls below
Symantec's plan. Individual bonuses were paid based on an established formula
that factors in an individual's performance rating, bonus target and quarterly
earnings. Bonus targets were generally fixed percentages of an executive
officer's base salary, and performance objectives were established as a basis
for determining performance ratings. The Committee determined the CEO's
performance rating, and the CEO allocated the remainder of the pool to the
remaining participants (including executive officers), all based on each
participant's performance during the quarter. The total of individual bonuses
was controlled by the overall bonus pool, as adjusted by factors relating to
earnings and individual performance.
Under the quarterly bonus program, the overall pool and an individual's
performance rating are determined based on overall corporate performance, group
performance and individual performance. Overall corporate performance was judged
based primarily on operating profit/loss, excluding non-recurring charges. Group
performance was judged based on a variety of factors, including ability to
achieve budgeted revenue and expense levels, and to release new products and
upgrades to existing products on a timely basis. Individual performance was
judged based on a variety of factors, including ability to achieve individual
performance goals. Because the pool of funds available for bonuses was
determined by corporate financial performance, bonuses could be significantly
affected if corporate financial performance fell short of desired objectives.
Overall corporate performance determined the pool of funds available for
bonuses; individual and group performance ratings determined actual payouts.
While bonuses were determined largely based on the total amount of the pool,
individual and group performance ratings reflected a variety of subjective
considerations.
The specific financial and business objectives established under the
quarterly and the calendar year bonus programs are confidential commercial and
business information. As such, such information need not be disclosed pursuant
to Instruction 2 to Item 402(k) of Regulation S-K. Nevertheless, the general
criteria taken into account by Symantec in awarding bonuses in fiscal year 1996
included Symantec's ability to achieve budgeted revenue levels, to stay within
budgeted expense levels and to release new products and upgrades to existing
products on a timely basis.
Symantec establishes its financial objectives in connection with its normal
financial budgeting process. Approximately every six months, a budget is
established for the following four fiscal quarters. During each six-month budget
cycle, changes to the budgets are made to reflect changed conditions. In
addition, the budgets may be modified in between normal budget cycles if
significant events occur. Symantec's performance with respect to operating
profit/loss is the primary financial objective considered in determining
compensation for executive officers, although subjective factors, such as
ability to meet project schedules and ship products in accordance with those
schedules are also considered for executive officers with management
responsibility for product groups. Symantec met its budgeted
12
<PAGE>
goals during the first, second and fourth quarters of the fiscal year. During
the third quarter, bonuses to the executive officers were significantly reduced
as a result of the company's actual performance as compared to its budgeted
goals.
STOCK OPTIONS GRANTED TO EXECUTIVE OFFICERS IN FISCAL 1996
The Board periodically reviews the number of vested and unvested options
held by executive officers and makes stock option grants to executive officers
to provide greater incentives to those officers to continue their employment
with Symantec and to strive to increase the value of Symantec Common Stock.
Stock options typically have been granted to executive officers when the
executive first joins Symantec, in connection with a significant change in
responsibilities and, occasionally, to achieve equity within a peer group. When
making stock option grants for executive officers, the Board
considers Symantec's performance during the past year and recent quarters, the
responsibility level and performance of the executive officer, prior option
grants to the executive officer and the level of vested and unvested options.
The stock options generally become exercisable over a four-year period, and have
exercise prices equal to the fair market value of Symantec Common Stock on the
date of grant.
During the fiscal year ended March 31, 1996, the Board, based on
recommendations from the Compensation Committee, made certain stock option
grants to executive officers (see "Option Grants in Fiscal 1996"). The general
purpose of these grants was to provide greater incentives to these executive
officers to continue their employment with Symantec and to strive to increase
the long-term value of Symantec Common Stock. Specific stock option grants made
by the Board, upon recommendation of the Compensation Committee, during
Symantec's fiscal year 1996 were based on past performance, anticipated future
contribution and ability to impact corporate and/or business unit results,
consistency within the executive's peer group, prior option grants to the
executive officer and the level of vested and unvested options. Symantec does
not set specific target levels for options granted to named executive officers
or for Mr. Eubanks. The number of stock options awarded is based on a
discretionary and subjective determination by the Compensation Committee, in
consultation with the CEO, of what they believe is appropriate for each officer,
with consideration given by the Compensation Committee to the foregoing factors.
The relative importance of these factors varies from case to case based on a
discretionary and subjective determination by the Compensation Committee of what
is appropriate at the time. In fiscal 1996, the primary factor considered in
granting the options to executive officers was the number of unvested options
held by the executive officers.
In March 1996, Symantec offered 2,045 employees who were holding 4,949,961
options granted pursuant to Symantec's option plans, the opportunity to cancel
such options and be granted new options with an exercise price equal to $13.10.
The Board of Directors approved this offer for the purpose of retaining
employees in a competitive job market. The exercise price of $13.10 is an
average of the closing prices of Symantec's common stock, as reflected on the
Nasdaq National Market, during the fifteen days of trading prior to March 4,
1996, the date on which the elected options were canceled and regranted to
participating employees. Symantec's Board of Directors and Messrs. Eubanks,
Dykes, Laing and Bailey were not entitled to participate in this offer. See "--
Report on Repricing of Options."
FISCAL 1996 CEO COMPENSATION
Compensation for the CEO is determined through a process similar to that
discussed above for executive officers in general. The salary for the CEO during
the fiscal year ended March 31, 1996 remained at the level established in the
prior year.
Mr. Eubanks' bonuses are determined on the same basis as bonuses for the
rest of the executive staff, except that with respect to the first three
quarters of the fiscal year when bonuses for the executive staff were determined
in accordance with the quarterly bonus program, no group performance factor was
considered (i.e., overall corporate performance was used in lieu of group
performance). As noted above, Symantec's financial performance was measured
primarily with respect to operating profit/loss.
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STOCK OPTIONS GRANTED TO CEO IN FISCAL 1996
The Board periodically reviews the number of vested and unvested options
held by the CEO and makes stock option grants to the CEO to provide greater
incentives to him to continue his employment with Symantec and to strive to
increase the value of Symantec Common Stock. When making stock option grants to
the CEO, the Board considers Symantec's performance during the past year and
recent quarters, the performance of the CEO, prior option grants to the CEO and
the level of vested and unvested options. The stock options generally become
exercisable over a four-year period, and have exercise prices equal to the fair
market value of Symantec Common Stock on the date of grant.
During the fiscal year ended March 31, 1996, Mr. Eubanks received options to
acquire 220,000 shares of stock. The primary consideration for making additional
grants to Mr. Eubanks was the relatively low number of unvested options held by
Mr. Eubanks prior to the additional grants and the desire to motivate Mr.
Eubanks and directly relate a significant portion of his future compensation to
the company's stock price performance.
CHANGES TO TAX LAW -- LIMITS ON EXECUTIVE COMPENSATION
The Omnibus Budget Reconciliation Act of 1993 added Section 162(m) to the
U.S. Code. Section 162(m) limits deductions for certain executive compensation
in excess of $1 million. Certain types of compensation are deductible only if
performance criteria are specified in detail, and payments are contingent on
stockholder approval of the compensation arrangement. Symantec believes that it
is in the best interests of its stockholders to structure its compensation plans
to achieve maximum deductibility under Section 162(m) with minimal sacrifices in
flexibility and corporate objectives. With respect to non-equity compensation
arrangements, the Compensation Committee has reviewed the terms of those
arrangements most likely to be subject to Section 162(m) and believes that at
this time no changes are necessary. The Committee will continue to monitor this
situation and will take appropriate action if and when it is warranted. Since
corporate objectives may not always be consistent with the requirements for full
deductibility, it is conceivable that Symantec may enter into compensation
arrangements in the future under which payments are not deductible under Section
162(m); deductibility will not be the sole factor used by the Committee in
ascertaining appropriate levels or modes of compensation.
By: The Compensation Committee of the Board of Directors:
Carl D. Carman
Leslie L. Vadasz
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COMPARISON OF CUMULATIVE TOTAL RETURN
MARCH 31, 1991 TO MARCH 31, 1996
The graph below compares the cumulative total stockholder return on Symantec
Common Stock from March 31, 1991 to March 31, 1996 with the cumulative total
return on the S&P 500 Composite Index and the S&P High Technology Index over the
same period (assuming the investment of $100 in Symantec Common Stock and in
each of the other indices on March 31, 1991, and reinvestment of all dividends).
The past performance of Symantec's Common Stock is no indication of future
performance.
SYMANTEC CORPORATION
COMPARISON OF CUMULATIVE TOTAL RETURN
MARCH 31, 1991 TO MARCH 31, 1996
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SYMANTEC CORPORATION S&P 500 S&P HIGH TECH COMPOSITE
<S> <C> <C> <C>
3/91 100 100 100
3/92 177 111 102
3/93 53 128 112
3/94 65 130 132
3/95 95 150 167
3/96 53 198 226
</TABLE>
- ------------------------
(1) The graph assumes that $100 was invested in Symantec's Common Stock and in
each Index on March 31, 1991.
(2) The total return for each of Symantec Common Stock, the S&P 500 and the S&P
High Tech Composite assumes the reinvestment of dividends, although
dividends have not been declared on Symantec Common Stock. Historical
returns are not necessarily indicative of future performance.
The graph below compares the cumulative total shareholder return on Symantec
Common Stock from June 30, 1989 (the date of Symantec's initial public offering
was June 23, 1989) to March 31, 1996 with the cumulative total return on the S&P
500 Composite Index and the S&P High Technology Index over the same period
(assuming the investment of $100 in Symantec Common Stock and in each of the
other indices on June 30, 1989, and reinvestment of all dividends). Symantec has
provided this additional data to provide the perspective of a longer time period
which is consistent with Symantec's history as a public company. The past
performance of Symantec's Common Stock is no indication of future performance.
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<PAGE>
SYMANTEC CORPORATION
COMPARISON OF CUMULATIVE TOTAL RETURN
JUNE 23, 1989 TO MARCH 31, 1996
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SYMANTEC CORPORATION S&P 500 S&P HIGH TECH COMPOSITE
<S> <C> <C> <C>
6/89 100 100 100
3/90 174 109 101
3/91 420 125 110
3/92 743 138 112
3/93 224 160 124
3/94 272 162 145
3/95 400 187 184
3/96 224 248 247
</TABLE>
- ------------------------
(1) Symantec's initial public offering was on June 23, 1989. Data is shown
beginning June 30, 1989 because data for cumulative returns on the S&P 500
and the S&P High Tech Composite indices are available only at month end.
(2) The graph assumes that $100 was invested in Symantec's Common Stock and in
each Index on June 30, 1989.
(3) The total return for each of Symantec Common Stock, the S&P 500 and the S&P
High Tech Composite assumes the reinvestment of dividends, although
dividends have not been declared on Symantec Common Stock. Historical
returns are not necessarily indicative of future performance.
CERTAIN TRANSACTIONS
In March 1989, Symantec sold 45,000 shares of Symantec Common Stock to
Gordon E. Eubanks, Jr., at a per share price of $2.67. Mr. Eubanks paid for the
shares with a $120,000, 9% promissory note payable in four years. On March 23,
1993, the promissory note representing this indebtedness became due and was
replaced with a new nine-year promissory note, bearing interest at 6%. So as
long as Mr. Eubanks remains employed by Symantec, accrued interest on the note
will be forgiven annually and Symantec will pay Mr. Eubanks the amount of his
tax liability on such forgiveness. As of March 31, 1996, the outstanding
principal balance on this note was $120,000.
In August 1989, Symantec entered into a Housing Assistance Agreement with
John C. Laing, whereby Symantec agreed to pay Mr. Laing $2,194 per month towards
the mortgage on his residence until July 1, 1996, unless certain events occur,
including the sale of the residence or Mr. Laing's termination of employment
with Symantec. The agreement provided that if the residence is sold, Mr. Laing
must pay Symantec approximately 20% of any gain on such sale, and, if the
residence is not sold by July 1, 1996, Mr. Laing must pay Symantec approximately
20% of any appreciation in the value
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of the residence as of that date. The house was not sold by July 1, 1996, and
Symantec and Mr. Laing are in the process of determining the appreciation in the
value of the residence, in accordance with the terms of the agreement.
In connection with the merger of Peter Norton Computing, Inc. with and into
Symantec in August 1990, (the "Norton Merger"), Symantec and Peter Norton, who
was a member of the Board until September 1994, entered into a Publicity
Agreement pursuant to which Mr. Norton has granted to Symantec a perpetual,
exclusive license to use his name and image for computer software products for a
royalty equal to the greater of 1% of net sales of products bearing Mr. Norton's
name or 0.4% of the suggested retail price of such products. Mr. Norton also has
agreed to make himself available until August 31, 1995 for certain personal
appearances, press conferences and other public appearances. Mr. Norton may
terminate the agreement if Symantec fails to pay Mr. Norton an average of at
least $30,000 of royalties in any three consecutive years. For the fiscal years
ended April 1, 1994, March 31, 1995 and March 29, 1996 the amount of these
royalties payable to Mr. Norton was approximately $1.6 million, $1.9 million and
$2.9 million respectively.
As a condition of the Norton Merger, Symantec amended its present
Registration Rights Agreement, to include Mr. Norton as a holder (collectively,
the "Holders"), thereby extending to Mr. Norton certain rights to register the
shares of Symantec Common Stock received in the Norton Merger under the
Securities Act. The Registration Rights Agreement entitles the Holders, whenever
Symantec proposes to register any of its securities under the Securities Act,
either for its own account or the accounts of its security holders, to notice of
such registration and to include shares of such Common Stock therein, subject to
certain conditions and limitations. The Holders of a majority of the shares with
registration rights may require Symantec, on not more than two occasions with
respect to registration on forms other than Form S-3 (Mr. Norton being only
allowed to make one such demand) and on an unlimited number of occasions with
respect to registrations on Form S-3, to register all or a part of their
registrable shares under the Securities Act, and Symantec is required to use its
best efforts to effect such registration, subject to certain conditions and
limitations. Generally, Symantec is required to bear the expense of all such
registrations (other than those on Form S-3) except for underwriting discounts
and commissions. The foregoing registration rights under the amended
Registration Rights Agreement will terminate on January 1, 2000. Accordingly,
Mr. Norton has the right to cause Symantec to use its best efforts to register
some or all of his shares for resale.
Symantec has adopted provisions in its certificate of incorporation and
by-laws that limit the liability of its directors and provide for
indemnification of its officers and directors to the full extent permitted under
Delaware law. Under Symantec's Certificate of Incorporation, and as permitted
under the DGCL, directors are not liable to Symantec or its stockholders for
monetary damages arising from a breach of their fiduciary duty of care as
directors, including such conduct during a merger or tender offer. In addition,
Symantec has entered into separate indemnification agreements with its directors
and officers that could require Symantec, among other things, to indemnify them
against certain liabilities that may arise by reason of their status or service
as directors or officers. Such provisions do not, however, affect liability for
any breach of a director's duty of loyalty to Symantec or its stockholders,
liability for acts or omissions not in good faith or involving intentional
misconduct or knowing violations of law, liability for transactions in which the
director derived an improper personal benefit or liability for the payment of a
dividend in violation of Delaware law. Such limitation of liability also does
not limit a director's liability for violation of, or otherwise relieve Symantec
or its directors from the necessity of complying with, federal or state
securities laws or affect the availability of equitable remedies such as
injunctive relief or rescission.
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<PAGE>
THE PROPOSALS
PROPOSAL NO. 1 -- ELECTION OF SYMANTEC DIRECTORS
At the Symantec Stockholders Meeting, the six current members of the Board
will be nominated for reelection. These nominees are Charles M. Boesenberg,
Walter W. Bregman, Carl D. Carman, Gordon E. Eubanks, Jr., Robert S. Miller and
Leslie L. Vadasz. Each of these directors was elected at Symantec's annual
meeting of stockholders on November 22, 1995.
Each director will hold office until the next annual meeting of stockholders
and until his successor has been elected and qualified or until his earlier
resignation or removal. The size of Symantec's Board is currently set at six
members. Shares represented by the accompanying proxy will be voted for the
election of the six nominees recommended by Symantec's management unless the
proxy is marked in such a manner as to withhold authority so to vote. If any
nominee for any reason is unable to serve or for good cause will not serve, the
proxies may be voted for such substitute nominee as the proxy holder may
determine. Symantec is not aware of any nominee who will be unable to or for
good cause will not serve as a director. There is no family relationship between
any director or executive officer of Symantec and any other director or
executive officer of Symantec.
For certain information about the current directors, see "DIRECTORS AND
MANAGEMENT -- Directors and Executive Officers."
BOARD MEETINGS AND COMMITTEES
During the fiscal year ended March 31, 1996, the Board of Symantec held a
total of ten meetings. The Board has an Audit Committee and a Compensation
Committee. The Board does not have a nominating committee or a committee
performing a similar function.
Messrs. Bregman and Miller are currently the members of Symantec's Audit
Committee, which met four times during the fiscal year ended March 31, 1996. The
Audit Committee meets with Symantec's outside auditors and reviews Symantec's
accounting policies and internal controls.
Messrs. Carman and Vadasz are currently the members of Symantec's
Compensation Committee, which met six times during the fiscal year ended March
31, 1996. The Compensation Committee recommends cash-based compensation for
executive officers of Symantec.
DIRECTORS' COMPENSATION
Messrs. Bregman, Boesenberg, Miller and Vadasz are each entitled to receive
$1,500 per meeting of the Board or a Committee of the Board which they attend.
During fiscal 1996, Mr. Boesenberg received $4,500 for attending Board meetings,
Mr. Bregman received $1,500 for attending Board meetings, Mr. Miller received
$12,000 for attending Board meetings, and Mr. Vadasz received $25,500 for
attending Board meetings in 1994, 1995 and 1996. All members of the Board are
reimbursed for invoiced out-of-pocket expenses that they incur in attending
Board meetings.
Mr. Boesenberg has an employment and consulting agreement with Symantec that
states the terms of his compensation. Pursuant to that agreement, Mr. Boesenberg
was an employee of Symantec until December 31, 1994, and from January 1, 1995
through December 31, 1995 was a consultant to Symantec. See "DIRECTORS AND
MANAGEMENT -- Compensation of Executive Officers -- Employment Contracts,
Termination of Employment and Change in Control Arrangements."
Mr. Bregman began to provide services to Symantec as a marketing consultant
in July 1995. In exchange for these services, Mr. Bregman has been included for
coverage under Symantec's Employee Medical Plan. The annual fair market value of
this arrangement is approximately $21,000.
During fiscal 1996, Messrs. Bregman, Miller, Boesenberg and Vadasz each
received a non-qualified stock option to purchase 6,000 shares of Symantec's
Common Stock at an exercise price of $21.25 per share. During fiscal 1996, Mr.
Carman received a non-qualified stock option to purchase 20,000 shares of
Symantec's Common Stock at an exercise price of $21.25 per share. Each of these
options
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<PAGE>
were granted automatically, pursuant to the 1993 Directors Plan. The 1993
Directors Plan provides that new directors receive an initial grant of 16,000
shares, continuing non-employee directors other than the Chairman receive an
annual grant of 6,000 shares, and the Chairman receives an annual grant of
20,000 shares.
THE BOARD RECOMMENDS A VOTE "FOR" ELECTION
OF EACH OF THE SIX NOMINATED DIRECTORS.
PROPOSAL NO. 2 -- APPROVAL OF AMENDMENT TO SYMANTEC'S 1996 EQUITY INCENTIVE PLAN
PROPOSED AMENDMENT
At the Symantec Stockholders Meeting, Symantec's stockholders and holders of
Exchangeable Shares will be asked to consider and vote upon a proposal to amend
Symantec's 1996 Equity Incentive Plan (the "96 Plan") to make available for
issuance thereunder an additional number of shares of Symantec Common Stock
equal to the number of options previously granted pursuant to Symantec's
terminated 1988 Option Plan that expire, are cancelled or become unexercisable
for any reason without having been exercised in full, provided that such
additional number does not exceed 1,336,373, which will raise the 96 Plan's
limit on shares that may be issued pursuant to awards granted thereunder from
2,741,573 to 4,077,946 so that the 96 Plan is able to accommodate the increase
in shares caused by the cancellation or expiration of options under the 1988
Option Plan.
The Board of Directors believes that the increase in shares available under
the 96 Plan is in the best interests of Symantec for the following reasons.
Simultaneous with stockholder approval of the 96 Plan on May 14, 1996,
Symantec's 1988 Option Plan was terminated. The termination of the 1988 Option
Plan limits the ability of Symantec to grant options to new employees who
replace former Symantec employees who held options granted under the 1988 Option
Plan at the time of termination. By limiting the proposed increase in the number
of shares issuable under the 96 Plan to the number of forfeited shares which are
no longer issuable under the 1988 Option Plan, Symantec is effectively
offsetting the increase by a reduction in shares issuable under the 1988 Option
Plan. Although Symantec's management cannot be certain of the number of options
that will be cancelled under the 1988 Option Plan due to employee turnover,
during the 1994, 1995 and 1996 fiscal years, 954,366, 1,035,174 and 938,825
options held by former employees were cancelled, respectively.
SUMMARY OF 1996 EQUITY INCENTIVE PLAN
The following is a summary of the principal provisions of the 96 Plan as
proposed to be amended and is not intended to be complete. For your convenience,
the 96 Plan as proposed to be amended has been reproduced in its entirety in
Annex A to this Proxy Statement, and Symantec's stockholders are urged to review
the full text of the plan. Tax information related to the 96 Plan follows this
summary.
GENERAL. The 96 Plan was adopted by Symantec's Board of Directors on March
4, 1996 and approved by the stockholders on May 14, 1996. The purpose of the 96
Plan is to provide incentives to attract, retain and motivate eligible persons
whose present and potential contributions are important to the success of
Symantec, by offering them an opportunity to participate in the company's future
performance through awards of options.
ADMINISTRATION. The 96 Plan permits either the Board of Directors or a
committee appointed by the Board to administer the 96 Plan. If the Board
establishes such a committee, and two or more members of the Board are "outside
directors", the committee must be comprised of at least two members of the
Board, all of whom are outside directors and "disinterested persons."
"Disinterested persons" and "outside directors" are defined in the 96 Plan and
comply with definitions given such terms under the Securities Exchange Act of
1934, as amended (the "Exchange Act") and Section 162(m) of the U.S. Code,
respectively. References herein to the "Committee" mean either the committee
appointed to administer the 96 Plan or the Board. Subject to the terms of the 96
Plan, the Committee determines the persons who are to receive awards, the number
of shares subject to each such award and the terms and conditions of such
awards. The Committee also has the authority to
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<PAGE>
construe and interpret any of the provisions of the 96 Plan or any awards
granted thereunder and to modify awards granted under the 96 Plan. The
interpretation by the Committee of any of the provisions of the 96 Plan or any
award granted under the 96 Plan is final and conclusive, unless such
interpretation is in contravention of any express term of the 96 Plan.
ELIGIBILITY. The 96 Plan provides that awards may be granted to employees,
officers, directors, consultants, independent contractors and advisors of
Symantec or of any parent, subsidiary or affiliate of Symantec as the Committee
may determine. As of June 30, 1996, approximately 2,200 people were eligible to
participate in the 96 Plan. No person will be eligible to receive more than
500,000 shares in any calendar year pursuant to the grant of awards under the 96
Plan other than new employees of Symantec, or any parent, subsidiary or
affiliate of Symantec, who are eligible to receive up to a maximum of 800,000
shares in the calendar year in which they commence employment. A person may be
granted more than one award under the 96 Plan.
STOCK RESERVED FOR ISSUANCE. The stock subject to awards under the 96 Plan
consists of shares of Symantec Common Stock reserved for issuance thereunder.
The aggregate number of shares that may be issued under awards pursuant to the
96 Plan as amended is 2,675,000 plus (i) any shares that remain unissued under
Symantec's 1988 Option Plan on the date that Symantec's Board of Directors
approved the 96 Plan and (ii) any shares issuable upon exercise of options
granted under the 1988 Option Plan that expire, are cancelled or become
unexercisable without having been exercised in full, provided that such total
number may not exceed 4,077,946. In addition, shares that are subject to
issuance upon exercise of an option under the 96 Plan but cease to be subject to
such option for any reason (other than exercise of such option), that are
subject to an award granted under the 96 Plan but are forfeited or repurchased
by Symantec at the original issue price, and that are subject to an award that
terminates without shares being issued, will be available for grant and issuance
under the 96 Plan.
TERMS OF OPTIONS. Subject to the terms and conditions of the 96 Plan, the
Committee, in its discretion, determines for each option certain terms and
conditions, including, whether the option is to be an ISO or a NQSO, the number
of shares for which the option will be granted, the exercise price of the
option, and the periods during which the option may be exercised. Each option is
evidenced by a stock option agreement in such form as the Committee approves and
is subject to the following conditions, in addition to those described elsewhere
herein or in the 96 Plan:
(a) DATE OF GRANT: The date of grant of an option will be the date on
which the Committee decides to grant the option, unless the Committee
specifies otherwise. The related stock option agreement and a copy of the 96
Plan will be delivered to the optionee within a reasonable time after the
option is granted.
(b) TERM OF EXERCISE OF OPTIONS: Options are exercisable within the
period, or upon the events, determined by the Committee as set forth in the
related stock option agreement. However, no option may be exercisable after
ten years from the date of grant, and no ISO granted to a 10% stockholder
can be exercisable after five years from the date of grant. Symantec
anticipates that most of the options that will be granted under the 96 Plan
will be exercisable for ten years and options granted under the 96 Plan will
generally vest and become exercisable at a rate of 25% one year after the
date of grant, and then ratably in monthly increments over the succeeding
three years of employment.
(c) EXERCISE PRICE: Each stock option agreement states the related
option exercise price, which may not be less than 100% of the fair market
value of the shares of Common Stock on the date of the grant. The exercise
price of an ISO granted to a 10% stockholder may not be less than 110% of
the fair market value of shares of Symantec Common Stock on the date of
grant. On July 15, 1996, the fair market value of Symantec Common Stock was
$8.9375.
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(d) METHOD OF EXERCISE: Options may be exercised only by delivery to
Symantec of a written stock option exercise agreement, stating the number of
shares purchased, the restrictions imposed on the shares purchased, if any,
and certain representations and covenants regarding optionee's investment
intent and access to information, together with payment in full of the
exercise price for the number of shares purchased. The option exercise price
is typically payable in cash or by check, but may also be payable, at the
discretion of the Committee, in a number of other forms of consideration,
including cancellation of indebtedness, fully paid shares of Symantec Common
Stock, delivery of a promissory note, waiver of compensation due or accrued
to an optionee for services rendered, through a "same day sale," through a
"margin commitment," or any combination of the foregoing.
(e) TERMINATION OF EMPLOYMENT: If an optionee ceases to provide
services as an employee, director, consultant, independent contractor or
advisor to Symantec, or a parent, subsidiary or affiliate of Symantec
(except in the case of death, disability, sick leave, military leave, or any
other leave of absence approved by the Committee which does not exceed 90
days, or if reinstatement upon expiration of such leave is guaranteed by
law), the optionee typically has three months to exercise any
then-exercisable options; provided, however, that the exercise period may be
extended to prevent an optionee subject to Section 16(b) of the Exchange Act
from having a matching purchase and sale. A twelve month exercise period
applies in cases of optionee's disability (as defined in the 96 Plan) or
death.
(f) LIMITATIONS ON EXERCISE: The Committee may determine a minimum
number of shares that can be purchased on an exercise of an option.
Notwithstanding the minimum number, an optionee will not be prevented from
exercising his or her option for the full number of shares for which such
option is exercisable.
(g) LIMITATIONS ON ISOS: An individual will not be eligible to receive
an ISO unless such individual is an employee of Symantec or of a parent or
subsidiary of Symantec. The aggregate fair market value (determined as of
the time an option is granted) of the shares with respect to which ISOs are
exercisable for the first time by an optionee during any calendar year may
not exceed $100,000.
(h) TRANSFERABILITY: An option generally is not transferable, and is
exercisable during the optionee's lifetime only by the optionee.
(i) RECAPITALIZATION: The number of shares subject to any award, and
the number of shares issuable under the 96 Plan, are subject to
proportionate adjustment in the event of a stock dividend, recapitalization,
stock split, reverse stock split, subdivision, combination, reclassification
or similar change relating to the capital structure of Symantec without
consideration. In the event of a dissolution or liquidation of Symantec, a
merger or consolidation in which Symantec does not survive (other than a
merger with a wholly owned subsidiary or where there is no substantial
change in the stockholders of the corporation and the options granted are
assumed, converted or replaced by the successor corporation), a merger in
which Symantec is the surviving corporation, but after which the
stockholders of Symantec cease to own an equity interest in Symantec, a sale
of all or substantially all of Symantec's assets or any other transaction
that qualifies as a "corporate transaction" under Section 424(a) of the U.S.
Code, all outstanding awards may be assumed, converted or replaced by the
successor corporation. Alternatively, the successor corporation may
substitute equivalent awards or provide substantially similar consideration
to participants as was provided to stockholders. If a successor corporation
refuses to assume or substitute options, such options will expire upon the
occurrence of the transaction.
(j) RIGHTS AS STOCKHOLDER: An optionee has no rights as a stockholder
with respect to any shares covered by an option until the option has been
validly exercised and shares of Symantec Common Stock are issued to the
optionee.
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(k) OTHER PROVISIONS: The option grant and exercise agreements
authorized under the 96 Plan, which may be different for each option, may
contain such other provisions as the Committee deems advisable, including
without limitation, (i) restrictions upon the exercise of the option and
(ii) a right of repurchase in favor of Symantec to repurchase unvested
shares held by an optionee upon termination of the optionee's employment at
the original purchase price.
AMENDMENT AND TERMINATION OF THE 96 PLAN. The Committee, to the extent
permitted by law, and with respect to any shares at the time not subject to
awards, may suspend or discontinue the 96 Plan or revise or amend the 96 Plan in
any respect whatsoever; provided that the Committee may not, without approval of
the stockholders, amend the 96 Plan in a manner that requires stockholder
approval pursuant to the U.S. Code or the regulations thereunder or pursuant to
Rule 16b-3.
TERM OF THE 96 PLAN. Awards may be granted pursuant to the 96 Plan from
time to time until the expiration of the ten year period commencing with the
date the 96 Plan was adopted by the Board of Directors.
FEDERAL INCOME TAX INFORMATION. Options so designated under the 96 Plan are
intended to qualify as ISOs. All options that are not designated as ISOs are
intended to be NQSOs.
THE FOLLOWING IS A GENERAL SUMMARY AS OF THE DATE OF THIS PROXY STATEMENT OF
THE U.S. FEDERAL INCOME TAX CONSEQUENCES TO SYMANTEC AND PARTICIPATING EMPLOYEES
ASSOCIATED WITH STOCK OPTIONS GRANTED UNDER THE 96 PLAN. THE U.S. FEDERAL TAX
LAWS MAY CHANGE AND THE U.S. FEDERAL, STATE AND LOCAL TAX CONSEQUENCES FOR ANY
OPTIONEE WILL DEPEND UPON HIS OR HER INDIVIDUAL CIRCUMSTANCES. EACH
PARTICIPATING EMPLOYEE HAS BEEN AND IS ENCOURAGED TO SEEK THE ADVICE OF A
QUALIFIED TAX ADVISOR REGARDING THE TAX CONSEQUENCES OF PARTICIPATION IN THE 96
PLAN.
TAX TREATMENT OF THE OPTIONEE
INCENTIVE STOCK OPTIONS. An optionee will recognize no income upon grant of
an ISO and will incur no tax upon exercise of an ISO unless the optionee is
subject to the alternative minimum tax. If the optionee holds the shares
purchased upon exercise of the ISO (the "ISO Shares") for more than one year
after the date the option was exercised and for more than two years after the
option grant date, the optionee generally will realize long-term capital gain or
loss (rather than ordinary income or loss) upon disposition of the ISO Shares.
This gain or loss will be equal to the difference between the amount realized
upon such disposition and the amount paid for the ISO Shares.
If the optionee disposes of ISO Shares prior to the expiration of either
required holding period (a "disqualifying disposition"), then gain realized upon
such disposition, up to the difference between the option exercise price and the
fair market value of the ISO Shares on the date of exercise (or, if less, the
amount realized on a sale of such ISO Shares), will be treated as ordinary
income. Any additional gain will be long-term or short-term capital gain,
depending upon the amount of time the ISO Shares were held by the optionee.
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ALTERNATIVE MINIMUM TAX. The difference between the exercise price and fair
market value of the ISO Shares on the date of exercise is an adjustment to
income for purposes of the alternative minimum tax ("AMT"). The AMT (imposed to
the extent it exceeds the taxpayer's regular tax) is currently 26% of an
individual taxpayer's alternative minimum taxable income (28% percent in the
case of alternative minimum taxable income in excess of $175,000). Alternative
minimum taxable income is determined by adjusting regular taxable income for
certain items, increasing that income by certain tax preference items and
reducing this amount by the applicable exemption amount ($45,000 in the case of
a joint return, subject to reduction under certain circumstances). If a
disqualifying disposition of the ISO Shares occurs in the same calendar year as
exercise of the ISO, there is no AMT adjustment with respect to those ISO
Shares. Also, upon a sale of ISO Shares that is not a disqualifying disposition,
alternative minimum taxable income is reduced in the year of sale by the excess
of the fair market value of the ISO Shares at exercise over the amount paid for
the ISO Shares.
NONQUALIFIED STOCK OPTIONS. An optionee will not recognize any taxable
income at the time a NQSO is granted. However, upon exercise of a NQSO the
optionee must include in income as compensation an amount equal to the
difference between the fair market value of the shares on the date of exercise
and the optionee's purchase price. The included amount must be treated as
ordinary income by the optionee and may be subject to income tax withholding by
Symantec (either by payment in cash or withholding out of the optionee's
salary). The Omnibus Budget Reconciliation Act of 1993 has increased the
required flat federal withholding rate to 28% effective with respect to taxable
years beginning after December 31, 1993. Upon resale of the shares by the
optionee, any subsequent appreciation or depreciation in the value of the shares
will be treated as capital gain or loss.
OMNIBUS BUDGET RECONCILIATION ACT OF 1993. The Omnibus Reconciliation Act
of 1993 provides that the maximum tax rate applicable to ordinary income is
39.6%. Long-term capital gain will be taxed at a maximum rate of 28%. For this
purpose, in order to receive long-term capital gain treatment, the stock must be
held for more than one year. Capital gains will continue to be offset by capital
losses and up to $3,000 of capital losses may be offset annually against
ordinary income. The Omnibus Reconciliation Act of 1993 also increased the AMT
to 26% (28% for alternative minimum taxable income in excess of $175,000) of an
individual taxpayer's alternative minimum taxable income, effective with respect
to taxable years beginning after December 31, 1992.
ESTIMATED TAXES. Estimated tax payments may be due on amounts an optionee
includes in income if the income recognition event occurs before the last month
of his or her taxable year and no other exceptions to the underpayment of
estimated tax penalties applies. Generally, estimated taxes must be paid with
respect to regular and alternative minimum tax liabilities if the amount of a
taxpayer's withheld taxes together with any estimated taxes is less than 90
percent of that taxpayer's total regular or alternative minimum tax liability
for the year, unless an exception applies.
TAX TREATMENT OF SYMANTEC. Symantec will be entitled to a deduction in
connection with the exercise of a NQSO by a domestic employee or other person to
the extent that the optionee recognizes ordinary income. Symantec will be
entitled to a deduction in connection with the disposition of shares acquired
under an ISO only to the extent that the optionee recognizes ordinary income on
a disqualifying disposition of the ISO Shares. The IRS is currently considering
regulations that would require companies to withhold taxes from an optionee in
the event that the optionee makes a disqualifying disposition of shares acquired
under an ISO.
OFFICERS AND DIRECTORS. Shares purchased under the 96 Plan by affiliates of
Symantec (that is, persons in a control relationship with Symantec) are subject
to special restrictions on resale imposed by the Securities Act of 1933, as
amended (the "Securities Act"). Such shares can be resold only if registered for
resale, sold under Rule 144 of the Securities Act or sold under another
exemption from registration. Among other requirements, Rule 144 imposes volume
limitations on resales.
ERISA INFORMATION. Symantec believes that the 96 Plan is not subject to any
of the provisions of the Employee Retirement Income Security Act of 1974, as
amended.
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<PAGE>
BENEFITS TO CERTAIN PERSONS.
Because benefits under the 96 Plan will vary depending on the timing of
participants' exercise decisions and on the fair market value of Symantec's
Common Stock at various future dates, it is not possible to determine exactly
what benefits might be received by Symantec's directors, executive officers and
other employees under the 96 Plan. The following table summarizes the benefits
that were received by various persons under Symantec's 1988 Employees Stock
Option Plan in the fiscal year ended March 31, 1996:
1988 EMPLOYEES STOCK OPTION PLAN
<TABLE>
<CAPTION>
NUMBER OF EXERCISE
NAME AND POSITION SHARES PRICE
- ------------------------------------------------------------- --------------- ------------------------
<S> <C> <C>
Gordon E. Eubanks, Jr........................................ 220,000 $10.3125
Robert R.B. Dykes............................................ 60,000 $10.3125
John C. Laing................................................ 60,000 $10.3125
Mark W. Bailey............................................... 50,000 $10.3125
Dana E. Siebert.............................................. 65,000 $10.3125
Executive Group (eight persons).............................. 560,054 $10.3125 -- $13.10
Non-executive director group (five persons).................. 0 N/A
Non-executive officer employee group......................... 4,989,446.42 $10.3125 -- $32.875
</TABLE>
THE BOARD RECOMMENDS A VOTE "FOR"
APPROVAL OF THE AMENDMENT TO THE 96 PLAN
PROPOSAL NO. 3 -- APPROVAL OF AMENDMENT TO SYMANTEC'S 1989 EMPLOYEE STOCK
PURCHASE PLAN
At the Symantec Stockholders Meeting, Symantec's stockholders will be asked
to consider a proposal to (i) increase by 1,400,000 shares (from 2,000,000 to
3,400,000) the number of shares of Symantec Common Stock reserved for issuance
thereunder and (ii) amend the employee eligibility requirements so that persons
who are employed by Symantec on the third business day before the beginning of
an offering period and meet the other eligibility requirements are eligible to
participate in the Stock Purchase Plan.
The Board believes that the increase in shares available under the Stock
Purchase Plan and the amendment to the employee eligibility requirements are in
the best interests of Symantec. The purpose of the Stock Purchase Plan is to
provide employees of Symantec with a convenient means to acquire an equity
interest in Symantec through payroll deductions, and to provide an incentive for
continued employment. The Board believes that the additional reserve of shares
from which shares may be issued is needed to ensure that Symantec can meet those
goals.
PROPOSED AMENDMENT
The amendment to the Stock Purchase Plan, if approved, would increase the
number of shares of Symantec's Common Stock that may be issued under the Stock
Purchase Plan from 2,000,000 to 3,400,000. In addition, the amendment would
change the employee eligibility requirements so that employees who are employed
by Symantec on the third business day prior to the beginning of an offering
period (as defined in the Stock Purchase Plan), and meet the other eligibility
requirements, would be eligible to participate in the plan. Currently, persons
who are employed by Symantec on the fifteenth day of the month prior to an
offering period, and meet the other eligibility requirements, are eligible to
participate in the plan. The Stock Purchase Plan is intended to qualify as an
"employee stock purchase plan" under Section 423 of the U.S. Code. The shares
awarded under the Stock Purchase Plan come from authorized but unissued shares
of Symantec Common Stock. As of June 30, 1996, a total of 1,714,971 shares of
Symantec Common Stock had been issued pursuant to the Stock Purchase Plan, at an
average purchase price of $10.06 per share, and approximately 2,200 employees
were eligible to participate in the Stock Purchase Plan. A summary of the
history and principal
24
<PAGE>
provisions of the Stock Purchase Plan follows; the summary is qualified in its
entirety by reference to the full text of the Stock Purchase Plan, as proposed
to be amended, which is included as Annex B hereto.
Because benefits under the Stock Purchase Plan will vary depending on
participants' elections and the fair market value of Symantec's Common Stock at
various future dates, it is not possible to determine exactly what benefits
might be received by Symantec's directors, executive officers and other
employees following the adoption of the proposed amendment to the Stock Purchase
Plan. The following table summarizes the benefits that were received by various
persons under the Stock Purchase Plan in the fiscal year ended March 31, 1996:
AMENDED PLAN BENEFITS
1989 EMPLOYEE STOCK PURCHASE PLAN
<TABLE>
<CAPTION>
NUMBER OF
NUMBER OF SHARES DOLLAR VALUE SHARES
- --------------------------------------------------------------- ---------------- -----------
<S> <C> <C>
Gordon E. Eubanks, Jr.......................................... $ 43,854.15 2,325
Robert R.B. Dykes.............................................. $ 43,854.15 2,325
John C. Laing.................................................. $ 43,254.15 2,325
Mark Bailey.................................................... $ 37,607.29 2,324
Dana Siebert................................................... $ 10,221.99 645
Executive Group (eight persons)................................ $ 256,453.33 14,744
Non-executive director group (five persons).................... $ 0 0
Non-executive officer employee group........................... $ 5,892,524.84 401,500
</TABLE>
Dollar value is based on the difference between the purchase price of the
shares (85% of the lesser of the fair market value of the shares on the first
day of the two-year offering period or the fair market value on the last
business day of the six-month purchase period, as described in more detail in
the following summary) and the closing sales price of the Symantec Common Stock
on the immediately preceding business day.
SUMMARY OF STOCK PURCHASE PLAN
The following is a summary of the principal provisions of the Stock Purchase
Plan as proposed to be amended. Tax information related to the Stock Purchase
Plan follows this summary.
GENERAL. The Stock Purchase Plan, was adopted by the Board of Directors on
October 24, 1989 and approved by the shareholders on August 28, 1990. The Stock
Purchase Plan was amended in 1992 to increase the number of shares available for
issuance from 600,000 to 700,000, in 1993 to increase the number of shares
available for issuance from 700,000 to 1,100,000, in 1994 to increase the number
of shares available from 1,100,000 to 1,500,000, and in 1995 to increase the
number of shares available from 1,500,000 to 2,000,000. If Proposal No. 3 is
adopted, the number of shares available for issuance will be increased from
2,000,000 to 3,400,000 and persons who are employed by Symantec on the third
business day before the beginning of an offering period, rather than the
fifteenth day of the month prior to such offering period, will be eligible to
participate, provided they meet the other eligibility requirements. The shares
awarded under the Stock Purchase Plan come from authorized but unissued shares
of Symantec Common Stock. Symantec intends that the Stock Purchase Plan qualify
as an "employee stock purchase plan" under Section 423 of the U.S. Code. The
Stock Purchase Plan was implemented on January 1, 1990 with the initial Purchase
Period (as defined below) being nine months instead of the customary six months.
ADMINISTRATION. The Stock Purchase Plan permits either the Board of
Directors or a committee appointed by the Board to administer the Stock Purchase
Plan. The Stock Purchase Plan is currently administered by the Board of
Directors. References herein to the "Committee" mean either the
25
<PAGE>
committee appointed to administer the Stock Purchase Plan or the Board of
Directors if no committee continues to have authority to do so. The
interpretation by the Committee of any of the provisions of the Stock Purchase
Plan or of any option granted under it is final and conclusive.
ELIGIBILITY. All employees of Symantec (including directors who are
employees), or any parent or subsidiary thereof, are eligible to participate in
the Stock Purchase Plan, except the following:
(a) employees who are not employed by Symantec or any subsidiary thereof
on the third business day before the beginning of an Offering Period;
(b) employees who are customarily employed for less than twenty hours
per week;
(c) employees who are customarily employed for less than five months in
a calendar year;
(d) employees who own or hold options to purchase, or who as a result of
participation in the Stock Purchase Plan would own stock or hold options to
purchase, stock possessing 5% or more of the total combined voting power or
value of all classes of stock of Symantec pursuant to Section 425(d) of the
U.S. Code.
Each offering of Symantec Common Stock under the Stock Purchase Plan is for
a period of 24 months (the "Offering Period"). Offering Periods commence on the
first day of January and July of each year. The first day of each Offering
Period is the "Offering Date" for such Offering Period. An employee cannot
participate simultaneously in more than one Offering Period. The Committee has
the power to change the duration of Offering Periods without stockholder
approval. Each Offering Period consists of four six-month exercise periods (each
a "Purchase Period") commencing on the first day of January and July of each
year, provided that, for the initial Offering Period, the first two Purchase
Periods commenced on January 1, 1990 and October 1, 1990 and ended on September
30, 1990 and December 31, 1990, respectively. The last business day of each
Purchase Period is the "Purchase Date." All accrued payroll deductions of each
participant are applied to the purchase of shares in accordance with the terms
of the Stock Purchase Plan at the end of each six-month Purchase Period.
Employees participate in the Stock Purchase Plan during each pay period
through payroll deductions. An employee sets the rate of such payroll
deductions, which may not be less than 2% nor more than 10% of the employee's
W-2 compensation, unreduced by the amount by which the employee's salary is
reduced pursuant to Sections 125 or 401(k) of the U.S. Code. Eligible employees
may elect to participate in any Offering Period by enrolling as provided under
the terms of the Stock Purchase Plan. Once enrolled, a participating employee
will automatically participate in each succeeding Offering Period unless such
employee withdraws from the Offering Period or the Stock Purchase Plan. After
the rate of payroll deductions for an Offering Period has been set by an
employee, that rate continues to be effective for the remainder of the Offering
Period (and for all subsequent Offering Periods in which the employee is
automatically enrolled) unless otherwise changed by the employee. The employee
may increase or lower the rate of payroll deductions for any upcoming Purchase
Period, but may only lower the rate of payroll deductions during the current
Purchase Period. Not more than one change may be made effective during any one
Purchase Period.
PURCHASE PRICE. The purchase price of shares that may be acquired in any
Offering Period under the Stock Purchase Plan is 85% of the lesser of (a) the
fair market value of the shares on the Offering Date, or (b) the fair market
value of the shares on the applicable Purchase Date. The fair market value of
the Common Stock on a given date is the closing sales price of the Common Stock
on the immediately preceding business day as quoted on the Nasdaq National
Market and reported in The Wall Street Journal. On July 15, 1996, the fair
market value of Symantec Common Stock (as determined by the closing price on the
Nasdaq National Market on the last trading day prior to such date) was $8.9375.
PURCHASE OF STOCK; EXERCISE OF OPTION. The number of whole shares an
employee is able to purchase in any Purchase Period within an Offering Period is
determined by dividing the total amount
26
<PAGE>
of payroll deductions withheld from the employee during the Purchase Period
pursuant to the Stock Purchase Plan by the price for each share determined as
described above. The purchase takes place automatically on the Purchase Date.
Any cash balance remaining in an employee's account following the purchase is
refunded to the employee as soon as practicable; however, any such cash balance
representing a fractional share may be applied to the purchase of additional
shares in the immediately succeeding Purchase Period. No employee is permitted
to purchase more than (i) 200% of the number of shares determined by using 85%
of the fair market value of a share of Symantec Common Stock on the Offering
Date as the denominator or (ii) the maximum number of shares set by the
Committee.
WITHDRAWAL. An employee may withdraw from any Offering Period or from the
Stock Purchase Plan. No further payroll deductions for the purchase of shares
will be made for the succeeding Offering Period unless the employee enrolls in
the new Offering Period in the same manner as for initial participation in the
Stock Purchase Plan. An employee may also participate in a current Purchase
Period under an Offering Period and enroll in the next Offering Period by (i)
withdrawing from participation in the current Offering Period effective as of
the last day of the concurrent Purchase Period and (ii) enrolling in the new
Offering Period. If the purchase price (as defined above) on the first day of
any current Offering Period in which employees are enrolled is higher than the
purchase price on the first day of any subsequent Offering Period, then all
participating employees will be automatically withdrawn from such earlier
commencing Offering Period and re-enrolled in the subsequent Offering Period.
TERMINATION OF EMPLOYMENT. Termination of an employee's employment for any
reason, including retirement or death, cancels his or her participation in the
Stock Purchase Plan immediately. In such event, the payroll deductions credited
to the employee's account will be returned to such employee or, in the case of
death, to the employee's legal representative.
ADJUSTMENT UPON CHANGES IN CAPITALIZATION. The number of shares subject to
any option, and the number of shares issuable under the Stock Purchase Plan, are
subject to adjustment in the event of a recapitalization of Symantec Common
Stock. In the event of a proposed dissolution or liquidation of Symantec, or in
the event of a proposed sale of all or substantially all of the assets of
Symantec, or the merger of Symantec with or into another corporation, the
Committee in its sole discretion may give each employee the right immediately to
exercise all or any part of the employee's outstanding options, including
options that would not otherwise then be exercisable. If Symantec issues
additional securities to raise additional capital, no adjustment will be made in
the number or price per share of the shares available under the Stock Purchase
Plan. In the event any change is made in the capital structure of Symantec, such
as a stock split or a stock dividend, that results in an increase or decrease in
the number of shares of Common Stock outstanding without receipt of additional
consideration by Symantec, appropriate adjustment will be made by Symantec in
the number of shares available under the Stock Purchase Plan, the number of
shares subject to outstanding options and in the purchase price per share,
subject to any required action by the Board of Directors or stockholders of
Symantec.
U.S. FEDERAL INCOME TAX INFORMATION. THE STOCK PURCHASE PLAN IS INTENDED TO
QUALIFY AS AN "EMPLOYEE STOCK PURCHASE PLAN" WITHIN THE MEANING OF SECTION 423
OF THE U.S. CODE.
THE FOLLOWING IS A GENERAL SUMMARY AS OF THE DATE OF THIS PROXY STATEMENT OF
THE U.S. FEDERAL INCOME TAX CONSEQUENCES TO SYMANTEC AND THE PARTICIPATING
EMPLOYEE ASSOCIATED WITH THE PURCHASE OF SHARES UNDER THE STOCK PURCHASE PLAN.
THE U.S. FEDERAL TAX LAWS MAY CHANGE AND THE U.S. FEDERAL, STATE AND LOCAL TAX
CONSEQUENCES FOR ANY PARTICIPATING EMPLOYEE WILL DEPEND UPON HIS OR HER
INDIVIDUAL CIRCUMSTANCES. EACH PARTICIPATING EMPLOYEE HAS BEEN AND IS ENCOURAGED
TO SEEK THE ADVICE OF A QUALIFIED TAX ADVISOR REGARDING THE TAX CONSEQUENCES OF
PARTICIPATION IN THE STOCK PURCHASE PLAN.
TAX TREATMENT OF THE EMPLOYEE. Participating employees will not recognize
income for U.S. federal income tax purposes either upon enrollment in the Stock
Purchase Plan or upon the purchase
27
<PAGE>
of shares. All tax consequences are deferred until a participating employee
sells the shares, disposes of shares by gift or dies. Payroll deductions,
however, remain fully taxable as ordinary income at the time the deduction is
taken, and there is no deferral of the ordinary income tax assessed on these
amounts.
If shares are held for more than one year after the date of purchase and
more than two years from the beginning of the applicable Offering Period, or if
the employee dies while owning the shares, the employee realizes ordinary income
on a sale (or a disposition by way of gift or upon death) to the extent of the
lesser of: (i) 15% of the fair market value of the shares at the beginning of
the Offering Period; or (ii) the actual gain (the amount by which the market
value of the shares on the date of sale, gift or death exceeds the purchase
price). All additional gain upon the sale of shares is treated as long-term
capital gain. If the shares are sold and the sale price is less than the
purchase price, there is no ordinary income, and the employee has a long-term
capital loss for the difference between the sale price and the purchase price.
If the shares are sold, or are otherwise disposed of including by way of
gift (but not death, bequest or inheritance) (in any case, a "disqualifying
disposition"), within either the one-year or the two-year holding periods
described above, the employee, realizes ordinary income at the time of sale or
other disposition taxable to the extent that the fair market value of the shares
at the date of purchase was greater than the purchase price. This excess will
constitute ordinary income (not currently subject to withholding) in the year of
the sale or other disposition even if no gain is realized on the sale or if a
gratuitous transfer is made. The difference, if any, between the proceeds of
sale and the fair market value of the shares at the date of purchase is a
capital gain or loss.
Ordinary income recognized by a participant upon a disqualifying disposition
constitutes taxable compensation that will be reported on the participant's W-2
form. The ordinary income should not constitute "wages" subject to withholding
by Symantec; however, the IRS is presently studying this position and may
require withholding in the future.
Capital gains may be offset by capital losses and up to $3,000 of capital
losses may be offset annually again ordinary income.
OMNIBUS BUDGET RECONCILIATION ACT OF 1993. The Omnibus Budget
Reconciliation Act of 1993, enacted in August 1993, provides that the maximum
tax rate applicable to ordinary income is 39.6%. Long-term capital gain will be
taxed at a maximum of 28%. For this purpose, in order to receive long-term
capital gain treatment, the stock purchased must be held for more than one year.
TAX TREATMENT OF SYMANTEC. Symantec will be entitled to a deduction in
connection with the disposition of shares acquired under the Stock Purchase Plan
only to the extent that the employee recognizes ordinary income on a
disqualifying disposition of the shares (but not if an employee meets the
holding period requirements). The Omnibus Budget Reconciliation Act of 1993
denies deductions to companies for certain compensation paid to certain
employees in excess of $1 million. It is unclear whether the IRS will assert
that ordinary income recognized on a disqualifying disposition will be subject
to this limitation. Symantec will treat any transfer of record ownership of
shares including a transfer to a broker or nominee or into "street name," as a
disposition, unless it is notified to the contrary. In order to enable Symantec
to learn of disqualifying dispositions and ascertain the amount of the
deductions to which it is entitled, employees are required to notify Symantec in
writing of the date and terms of any disposition of shares purchased under the
Stock Purchase Plan.
OFFICERS AND DIRECTORS. Shares purchased under the Stock Purchase Plan by
affiliates of Symantec (that is, persons in a control relationship with
Symantec) are subject to special restrictions on resale imposed by the
Securities Act. Such shares can be resold only if registered for resale, sold
under Rule 144 of the Commission or sold under another exemption from
registration. Among other requirements, Rule 144 imposes volume limitations on
resales.
THE BOARD RECOMMENDS A VOTE "FOR" APPROVAL OF THE
AMENDMENT TO THE 1989 EMPLOYEE STOCK PURCHASE PLAN.
28
<PAGE>
PROPOSAL NO. 4 -- RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board has selected Ernst & Young LLP as its principal independent
auditors to perform the audit of Symantec's financial statements for fiscal
1996, and the stockholders are being asked to ratify such selection. Ernst &
Young LLP audited Symantec's financial statements for Symantec's fiscal years
ended March 31, 1989, 1990 and 1991, April 3, 1992, April 2, 1993, April 1,
1994, March 31, 1995 and March 29, 1996. Representatives of Ernst & Young LLP
will be present at the Symantec Stockholders Meeting, will be given an
opportunity to make a statement at the Symantec Stockholders Meeting if they
desire to do so, and will be available to respond to appropriate questions.
THE BOARD RECOMMENDS A VOTE "FOR"
THE RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP
DISSENTING STOCKHOLDERS' RIGHTS
Under the Delaware General Corporation Law, holders of Symantec Common Stock
who object to any of the Proposals will not be entitled to demand appraisal of,
or to receive payment for, their Symantec Common Stock.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16 of the Exchange Act requires Symantec's directors and officers,
and persons who own more than 10% of Symantec's Common Stock to file initial
reports of ownership and reports of changes in ownership with the SEC and the
Nasdaq National Market. Such persons are required by SEC regulation to furnish
Symantec with copies of all Section 16(a) forms that they file.
Based solely on its review of the copies of such forms furnished to Symantec
and written representation from the executive officers and directors, Symantec
believes that all Section 16(a) filing requirements were met in fiscal 1996.
STOCKHOLDER PROPOSALS
Stockholder proposals for inclusion in the proxy statement and form of proxy
relating to Symantec's 1997 Annual Meeting of Stockholders must be received by
Symantec a reasonable time before a solicitation is made, and in any event not
later than March 31, 1997.
OTHER BUSINESS
The Board does not presently intend to bring any other business before the
Symantec Stockholders Meeting and, so far as is known to the Board, no matters
are to be brought before the Symantec Stockholders Meeting except as specified
in the notice of the Symantec Stockholders Meeting. As to any business that may
properly come before the Symantec Stockholders Meeting, however, it is intended
that proxies, in the form enclosed, will be voted in respect thereof in
accordance with the judgment of the persons voting such proxies.
29
<PAGE>
AVAILABLE INFORMATION
Symantec is subject to the informational requirements of the Exchange Act,
and in accordance therewith file reports, proxy statements and other information
with the SEC. The reports, proxy statements and other information filed by
Symantec with the SEC can be inspected and copied at the public reference
facilities maintained by the SEC at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the SEC's Regional Offices at Seven World Trade
Center, 13th Floor, New York, New York 10048 and at Northwestern Atrium Center,
500 West Madison Street, Chicago, Illinois 60661-2511. Copies of such material
also can be obtained from the Public Reference Section of the SEC at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. In
addition, material filed by Symantec can be inspected at the offices of the
National Association of Securities Dealers, Inc., Reports Section, 1735 K
Street, N.W., Washington, D.C. 20006.
By Order of the Board of Directors
/s/ DEREK P. WITTE
--------------------------------------
Derek P. Witte
VICE PRESIDENT, SECRETARY AND GENERAL
COUNSEL
30
<PAGE>
ANNEX A
SYMANTEC CORPORATION
1996 EQUITY INCENTIVE PLAN
(AS PROPOSED TO BE AMENDED)
1. PURPOSE. The purpose of this Plan is to provide incentives to attract,
retain and motivate eligible persons whose present and potential contributions
are important to the success of the Company, its Parent, Subsidiaries and
Affiliates, by offering them an opportunity to participate in the Company's
future performance through awards of Options. Capitalized terms not defined in
the text are defined in Section 21.
2. SHARES SUBJECT TO THE PLAN.
2.1 NUMBER OF SHARES AVAILABLE. Subject to Sections 2.2 and 16, the total
number of Shares reserved and available for grant and issuance pursuant to this
Plan will be 2,675,000 Shares plus any Shares that are made available for grant
and issuance under the Plan pursuant to the following sentence. Any Shares
remaining unissued under the Company's 1988 Stock Option Plan (the "PRIOR PLAN")
on the Effective Date (as defined in Section 17 below) and any Shares issuable
upon exercise of options granted pursuant to the Prior Plan that expire, are
cancelled or become unexercisable for any reason without having been exercised
in full will no longer be available for grant and issuance under the Prior Plan,
but will become available for grant and issuance under this Plan, provided that
such total number does not exceed 4,077,946. Subject to Sections 2.2 and 16,
Shares that: (a) are subject to issuance upon exercise of an Option but cease to
be subject to such Option for any reason other than exercise of such Option; (b)
are subject to an Award granted hereunder but are forfeited or are repurchased
by the Company at the original issue price; or (c) are subject to an Award that
otherwise terminates without Shares being issued; will again be available for
grant and issuance in connection with future Awards under this Plan. At all
times the Company shall reserve and keep available a sufficient number of Shares
as shall be required to satisfy the requirements of all outstanding Options
granted under this Plan and all other outstanding but unvested Awards granted
under this Plan.
2.2 ADJUSTMENT OF SHARES. In the event that the number of outstanding
Shares is changed by a stock dividend, recapitalization, stock split, reverse
stock split, subdivision, combination, reclassification or similar change in the
capital structure of the Company without consideration, then (a) the number of
Shares reserved for issuance under this Plan, (b) the Exercise Prices of and
number of Shares subject to outstanding Options, and (c) the number of Shares
subject to other outstanding Awards will be proportionately adjusted, subject to
any required action by the Board or the stockholders of the Company and
compliance with applicable securities laws; PROVIDED, HOWEVER, that fractions of
a Share will not be issued but will either be replaced by a cash payment equal
to the Fair Market Value of such fraction of a Share or will be rounded up to
the nearest whole Share, as determined by the Committee.
3. ELIGIBILITY. ISOs (as defined in Section 5 below) may be granted only
to employees (including officers and directors who are also employees) of the
Company or of a Parent or Subsidiary of the Company. All other Awards may be
granted to employees, officers, directors, consultants, independent contractors
and advisors of the Company or any Parent, Subsidiary or Affiliate of the
Company; provided such consultants, contractors and advisors render bona fide
services not in connection with the offer and sale of securities in a
capital-raising transaction. No person will be eligible to receive more than
500,000 Shares in any calendar year under this Plan pursuant to the grant of
Awards hereunder, other than new employees of the Company or of a Parent,
Subsidiary or Affiliate of the Company (including new employees who are also
officers and directors of the Company or any Parent,
1
<PAGE>
Subsidiary or Affiliate of the Company) who are eligible to receive up to a
maximum of 800,000 Shares in the calendar year in which they commence their
employment. A person may be granted more than one Award under this Plan.
4. ADMINISTRATION.
4.1 COMMITTEE AUTHORITY. This Plan will be administered by the Committee
or by the Board acting as the Committee. Subject to the general purposes, terms
and conditions of this Plan, and to the direction of the Board, the Committee
will have full power to implement and carry out this Plan. Without limitation,
the Committee will have the authority to:
(a) construe and interpret this Plan, any Award Agreement and any other
agreement or document executed pursuant to this Plan;
(b) prescribe, amend and rescind rules and regulations relating to this
Plan;
(c) select persons to receive Awards;
(d) determine the form and terms of Awards;
(e) determine the number of Shares or other consideration subject to
Awards;
(f) determine whether Awards will be granted singly, in combination
with, in tandem with, in replacement of, or as alternatives to, other Awards
under this Plan or any other incentive or compensation plan of the Company
or any Parent, Subsidiary or Affiliate of the Company;
(g) grant waivers of Plan or Award conditions;
(h) determine the vesting, exercisability and payment of Awards;
(i) correct any defect, supply any omission or reconcile any
inconsistency in this Plan, any Award or any Award Agreement;
(j) amend any option agreements executed in connection with this Plan;
(k) determine whether an Award has been earned; and
(l) make all other determinations necessary or advisable for the
administration of this Plan.
4.2 COMMITTEE DISCRETION. Any determination made by the Committee with
respect to any Award will be made in its sole discretion at the time of grant of
the Award or, unless in contravention of any express term of this Plan or Award,
at any later time, and such determination will be final and binding on the
Company and on all persons having an interest in any Award under this Plan. The
Committee may delegate to one or more officers of the Company the authority to
grant an Award under this Plan to Participants who are not Insiders of the
Company.
4.3 EXCHANGE ACT REQUIREMENTS. If two or more members of the Board are
Outside Directors, the Committee will be comprised of at least two (2) members
of the Board, all of whom are Outside Directors and Disinterested Persons.
During all times that the Company is subject to Section 16 of the Exchange Act,
the Company will take appropriate steps to comply with the disinterested
administration requirements of Section 16(b) of the Exchange Act, which will
consist of the appointment by the Board of a Committee consisting of not less
than two (2) members of the Board, each of whom is a Disinterested Person.
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5. OPTIONS. The Committee may grant Options to eligible persons and will
determine whether such Options will be Incentive Stock Options within the
meaning of the Code ("ISOS") or Nonqualified Stock Options ("NQSOS"), the number
of Shares subject to the Option, the Exercise Price of the Option, the period
during which the Option may be exercised, and all other terms and conditions of
the Option, subject to the following:
5.1 FORM OF OPTION GRANT. Each Option granted under this Plan will be
evidenced by an Award Agreement which will expressly identify the Option as an
ISO or an NQSO ("Stock Option Agreement"), and will be in such form and contain
such provisions (which need not be the same for each Participant) as the
Committee may from time to time approve, and which will comply with and be
subject to the terms and conditions of this Plan.
5.2 DATE OF GRANT. The date of grant of an Option will be the date on
which the Committee makes the determination to grant such Option, unless
otherwise specified by the Committee. The Stock Option Agreement and a copy of
this Plan will be delivered to the Participant within a reasonable time after
the granting of the Option.
5.3 EXERCISE PERIOD. Options will be exercisable within the times or upon
the events determined by the Committee as set forth in the Stock Option
Agreement governing such Option; PROVIDED, HOWEVER, that no Option will be
exercisable after the expiration of ten (10) years from the date the Option is
granted; and provided further that no ISO granted to a person who directly or by
attribution owns more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or of any Parent or Subsidiary of the
Company ("TEN PERCENT STOCKHOLDER") will be exercisable after the expiration of
five (5) years from the date the ISO is granted. The Committee also may provide
for the exercise of Options to become exercisable at one time or from time to
time, periodically or otherwise, in such number of Shares or percentage of
Shares as the Committee determines.
5.4 EXERCISE PRICE. The Exercise Price of an Option will be determined by
the Committee when the Option is granted and may be not less than 100% of the
Fair Market Value of the Shares on the date of grant; provided that the Exercise
Price of any ISO granted to a Ten Percent Stockholder will not be less than 110%
of the Fair Market Value of the Shares on the date of grant. Payment for the
Shares purchased may be made in accordance with Section 6 of this Plan.
5.5 METHOD OF EXERCISE. Options may be exercised only by delivery to the
Company of a written stock option exercise agreement (the "EXERCISE AGREEMENT")
in a form approved by the Committee (which need not be the same for each
Participant), stating the number of Shares being purchased, the restrictions
imposed on the Shares purchased under such Exercise Agreement, if any, and such
representations and agreements regarding Participant's investment intent and
access to information and other matters, if any, as may be required or desirable
by the Company to comply with applicable securities laws, together with payment
in full of the Exercise Price for the number of Shares being purchased.
5.6 TERMINATION. Notwithstanding the exercise periods set forth in the
Stock Option Agreement, exercise of an Option will always be subject to the
following:
(a) If the Participant is Terminated for any reason except death or
Disability, then the Participant may exercise such Participant's Options
only to the extent that such Options would have been exercisable upon the
Termination Date no later than three (3) months after the Termination Date
(or such shorter or longer time period not exceeding five (5) years as may
be determined by the Committee, with any exercise beyond three (3) months
after the Termination Date deemed to be an NQSO), but in any event, no later
than the expiration date of the Options.
(b) If the Participant is Terminated because of Participant's death or
Disability (or the Participant dies within three (3) months after a
Termination other than because of Participant's death or disability), then
Participant's Options may be exercised only to the extent that such Options
would have been exercisable by Participant on the Termination Date and must
be exercised by Participant (or Participant's legal representative or
authorized assignee) no later
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than twelve (12) months after the Termination Date (or such shorter or
longer time period not exceeding five (5) years as may be determined by the
Committee, with any such exercise beyond (a) three (3) months after the
Termination Date when the Termination is for any reason other than the
Participant's death or Disability, or (b) twelve (12) months after the
Termination Date when the Termination is for Participant's death or
Disability, deemed to be an NQSO), but in any event no later than the
expiration date of the Options.
5.7 LIMITATIONS ON EXERCISE. The Committee may specify a reasonable
minimum number of Shares that may be purchased on any exercise of an Option,
provided that such minimum number will not prevent Participant from exercising
the Option for the full number of Shares for which it is then exercisable.
5.8 LIMITATIONS ON ISOS. The aggregate Fair Market Value (determined as of
the date of grant) of Shares with respect to which ISOs are exercisable for the
first time by a Participant during any calendar year (under this Plan or under
any other incentive stock option plan of the Company or any Affiliate, Parent or
Subsidiary of the Company) will not exceed $100,000. If the Fair Market Value of
Shares on the date of grant with respect to which ISOs are exercisable for the
first time by a Participant during any calendar year exceeds $100,000, then the
Options for the first $100,000 worth of Shares to become exercisable in such
calendar year will be ISOs and the Options for the amount in excess of $100,000
that become exercisable in that calendar year will be NQSOs. In the event that
the Code or the regulations promulgated thereunder are amended after the
Effective Date of this Plan to provide for a different limit on the Fair Market
Value of Shares permitted to be subject to ISOs, such different limit will be
automatically incorporated herein and will apply to any Options granted after
the effective date of such amendment.
5.9 MODIFICATION, EXTENSION OR RENEWAL. The Committee may modify, extend
or renew outstanding Options and authorize the grant of new Options in
substitution therefor, provided that any such action may not, without the
written consent of a Participant, impair any of such Participant's rights under
any Option previously granted. Any outstanding ISO that is modified, extended,
renewed or otherwise altered will be treated in accordance with Section 424(h)
of the Code.
5.10 NO DISQUALIFICATION. Notwithstanding any other provision in this
Plan, no term of this Plan relating to ISOs will be interpreted, amended or
altered, nor will any discretion or authority granted under this Plan be
exercised, so as to disqualify this Plan under Section 422 of the Code or,
without the consent of the Participant affected, to disqualify any ISO under
Section 422 of the Code.
6. PAYMENT FOR SHARE PURCHASES.
6.1 PAYMENT. Payment for Shares purchased pursuant to this Plan may be
made in cash (by check) or, where expressly approved for the Participant by the
Committee and where permitted by law:
(a) by cancellation of indebtedness of the Company to the Participant;
(b) by surrender of shares that either: (1) have been owned by
Participant for more than six (6) months and have been paid for within the
meaning of SEC Rule 144 (and, if such shares were purchased from the Company
by use of a promissory note, such note has been fully paid with respect to
such shares); or (2) were obtained by Participant in the public market;
(c) by tender of a full recourse promissory note having such terms as
may be approved by the Committee and bearing interest at a rate sufficient
to avoid imputation of income under Sections 483 and 1274 of the Code;
PROVIDED, HOWEVER, that Participants who are not employees or directors of
the Company will not be entitled to purchase Shares with a promissory note
unless the note is adequately secured by collateral other than the Shares;
PROVIDED, FURTHER, that the portion of the Purchase Price equal to the par
value of the Shares, if any, must be paid in cash;
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(d) by waiver of compensation due or accrued to the Participant for
services rendered; PROVIDED, FURTHER, that the portion of the Purchase Price
equal to the par value of the Shares, if any, must be paid in cash;
(e) with respect only to purchases upon exercise of an Option, and
provided that a public market for the Company's stock exists:
(1) through a "same day sale" commitment from the Participant and a
broker-dealer that is a member of the National Association of Securities
Dealers (an "NASD DEALER") whereby the Participant irrevocably elects to
exercise the Option and to sell a portion of the Shares so purchased to
pay for the Exercise Price, and whereby the NASD Dealer irrevocably
commits upon receipt of such Shares to forward the Exercise Price
directly to the Company; or
(2) through a "margin" commitment from the Participant and an NASD
Dealer whereby the Participant irrevocably elects to exercise the Option
and to pledge the Shares so purchased to the NASD Dealer in a margin
account as security for a loan from the NASD Dealer in the amount of the
Exercise Price, and whereby the NASD Dealer irrevocably commits upon
receipt of such Shares to forward the Exercise Price directly to the
Company; or
(f) by any combination of the foregoing.
6.2 LOAN GUARANTEES. The Committee may help the Participant pay for Shares
purchased under this Plan by authorizing a guarantee by the Company of a
third-party loan to the Participant, provided the Company has full recourse to
the Participant relative to the guarantee.
7. WITHHOLDING TAXES.
7.1 WITHHOLDING GENERALLY. Whenever Shares are to be issued in
satisfaction of Awards granted under this Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Shares. Whenever, under this Plan, payments
in satisfaction of Awards are to be made in cash, such payment will be net of an
amount sufficient to satisfy federal, state, and local withholding tax
requirements.
7.2 STOCK WITHHOLDING. When, under applicable tax laws, a Participant
incurs tax liability in connection with the exercise or vesting of any Award
that is subject to tax withholding and the Participant is obligated to pay the
Company the amount required to be withheld, the Committee may allow the
Participant to satisfy the minimum withholding tax obligation by electing to
have the Company withhold from the Shares to be issued that number of Shares
having a Fair Market Value equal to the minimum amount required to be withheld,
determined on the date that the amount of tax to be withheld is to be determined
(the "Tax Date"). All elections by a Participant to have Shares withheld for
this purpose will be made in writing in a form acceptable to the Committee and
will be subject to the following restrictions:
(a) the election must be made on or prior to the applicable Tax Date;
(b) once made, then except as provided below, the election will be
irrevocable as to the particular Shares as to which the election is made;
(c) all elections will be subject to the consent or disapproval of the
Committee;
(d) if the Participant is an Insider and if the Company is subject to
Section 16(b) of the Exchange Act: (1) the election may not be made within
six (6) months of the date of grant of the Award, except as otherwise
permitted by SEC Rule 16b-3(e) under the Exchange Act, and (2) either (A)
the election to use stock withholding must be irrevocably made at least six
(6) months prior to the Tax Date (although such election may be revoked at
any time at least six (6) months
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prior to the Tax Date) or (B) the exercise of the Option or election to use
stock withholding must be made in the ten (10) day period beginning on the
third day following the release of the Company's quarterly or annual summary
statement of sales or earnings; and
(e) in the event that the Tax Date is deferred until six (6) months
after the delivery of Shares under Section 83(b) of the Code, the
Participant will receive the full number of Shares with respect to which the
exercise occurs, but such Participant will be unconditionally obligated to
tender back to the Company the proper number of Shares on the Tax Date.
8. PRIVILEGES OF STOCK OWNERSHIP.
8.1 VOTING AND DIVIDENDS. No Participant will have any of the rights of a
stockholder with respect to any Shares until the Shares are issued to the
Participant. After Shares are issued to the Participant, the Participant will be
a stockholder and have all the rights of a stockholder with respect to such
Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; PROVIDED, that if such
Shares are Restricted Stock, then any new, additional or different securities
the Participant may become entitled to receive with respect to such Shares by
virtue of a stock dividend, stock split or any other change in the corporate or
capital structure of the Company will be subject to the same restrictions as the
Restricted Stock; PROVIDED, FURTHER, that the Participant will have no right to
retain such stock dividends or stock distributions with respect to Shares that
are repurchased at the Participant's original Purchase Price pursuant to Section
10.
8.2 FINANCIAL STATEMENTS. The Company will provide financial statements to
each Participant prior to such Participant's purchase of Shares under this Plan,
and to each Participant annually during the period such Participant has Awards
outstanding; provided, however, the Company will not be required to provide such
financial statements to Participants whose services in connection with the
Company assure them access to equivalent information.
9. TRANSFERABILITY. Awards granted under this Plan, and any interest
therein, will not be transferable or assignable by Participant, and may not be
made subject to execution, attachment or similar process, otherwise than by will
or by the laws of descent and distribution or as consistent with the specific
Plan and Award Agreement provisions relating thereto. During the lifetime of the
Participant an Award will be exercisable only by the Participant, and any
elections with respect to an Award, may be made only by the Participant.
10. RESTRICTIONS ON SHARES. At the discretion of the Committee, the
Company may reserve to itself and/or its assignee(s) in the Award Agreement a
right to repurchase a portion of or all Shares that are not "Vested" (as defined
in the Award Agreement) held by a Participant following such Participant's
Termination at any time within ninety (90) days after the later of Participant's
Termination Date and the date Participant purchases Shares under this Plan, for
cash and/or cancellation of purchase money indebtedness, at the Participant's
original Purchase Price.
11. CERTIFICATES. All certificates for Shares or other securities
delivered under this Plan will be subject to such stock transfer orders, legends
and other restrictions as the Committee may deem necessary or advisable,
including restrictions under any applicable federal, state or foreign securities
law, or any rules, regulations and other requirements of the SEC or any stock
exchange or automated quotation system upon which the Shares may be listed or
quoted.
12. ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a
Participant's Shares, the Committee may require the Participant to deposit all
certificates representing Shares, together with stock powers or other
instruments of transfer approved by the Committee, appropriately endorsed in
blank, with the Company or an agent designated by the Company to hold in escrow
until such restrictions have lapsed or terminated, and the Committee may cause a
legend or legends referencing such restrictions to be placed on the
certificates. Any Participant who is permitted to execute a promissory note as
partial or full consideration for the purchase of Shares under this Plan will be
required to pledge and deposit with the Company all or part of the Shares so
purchased as collateral to secure the
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payment of Participant's obligation to the Company under the promissory note;
PROVIDED, HOWEVER, that the Committee may require or accept other or additional
forms of collateral to secure the payment of such obligation and, in any event,
the Company will have full recourse against the Participant under the promissory
note notwithstanding any pledge of the Participant's Shares or other collateral.
In connection with any pledge of the Shares, Participant will be required to
execute and deliver a written pledge agreement in such form as the Committee
will from time to time approve. The Shares purchased with the promissory note
may be released from the pledge on a PRO RATA basis as the promissory note is
paid.
13. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or from
time to time, authorize the Company, with the consent of the respective
Participants, to issue new Awards in exchange for the surrender and cancellation
of any or all outstanding Awards. The Committee may at any time buy from a
Participant an Award previously granted with payment in cash, Shares (including
Restricted Stock) or other consideration, based on such terms and conditions as
the Committee and the Participant may agree.
14. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award will not be
effective unless such Award is in compliance with all applicable federal and
state securities laws, rules and regulations of any governmental body, and the
requirements of any stock exchange or automated quotation system upon which the
Shares may then be listed or quoted, as they are in effect on the date of grant
of the Award and also on the date of exercise or other issuance. Notwithstanding
any other provision in this Plan, the Company will have no obligation to issue
or deliver certificates for Shares under this Plan prior to: (a) obtaining any
approvals from governmental agencies that the Company determines are necessary
or advisable; and/or (b) completion of any registration or other qualification
of such Shares under any state or federal law or ruling of any governmental body
that the Company determines to be necessary or advisable. The Company will be
under no obligation to register the Shares with the SEC or to effect compliance
with the registration, qualification or listing requirements of any state
securities laws, stock exchange or automated quotation system, and the Company
will have no liability for any inability or failure to do so.
15. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Award granted
under this Plan will confer or be deemed to confer on any Participant any right
to continue in the employ of, or to continue any other relationship with, the
Company or any Parent, Subsidiary or Affiliate of the Company or limit in any
way the right of the Company or any Parent, Subsidiary or Affiliate of the
Company to terminate Participant's employment or other relationship at any time,
with or without cause.
16. CORPORATE TRANSACTIONS.
16.1 ASSUMPTION OR REPLACEMENT OF AWARDS BY SUCCESSOR. In the event of (a)
a dissolution or liquidation of the Company, (b) a merger or consolidation in
which the Company is not the surviving corporation (OTHER THAN a merger or
consolidation with a wholly-owned subsidiary, a reincorporation of the Company
in a different jurisdiction, or other transaction in which there is no
substantial change in the stockholders of the Company or their relative stock
holdings and the Awards granted under this Plan are assumed, converted or
replaced by the successor corporation, which assumption will be binding on all
Participants), (c) a merger in which the Company is the surviving corporation
but after which the stockholders of the Company (other than any stockholder
which merges (or which owns or controls another corporation which merges) with
the Company in such merger) cease to own their shares or other equity interests
in the Company, (d) the sale of substantially all of the assets of the Company,
or (e) any other transaction which qualifies as a "corporate transaction" under
Section 424(a) of the Code wherein the stockholders of the Company give up all
of their equity interest in the Company (EXCEPT for the acquisition, sale or
transfer of all or substantially all of the outstanding shares of the Company
from or by the stockholders of the Company), any or all outstanding Awards may
be assumed, converted or replaced by the successor corporation (if any), which
assumption, conversion or replacement will be binding on all Participants. In
the alternative, the successor
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corporation may substitute equivalent Awards or provide substantially similar
consideration to Participants as was provided to stockholders (after taking into
account the existing provisions of the Awards). The successor corporation may
also issue, in place of outstanding Shares of the Company held by the
Participant, substantially similar shares or other property subject to
repurchase restrictions no less favorable to the Participant. In the event such
successor corporation (if any) refuses to assume or substitute Options, as
provided above, pursuant to a transaction described in this Subsection 16.1,
such Options will expire on such transaction at such time and on such conditions
as the Board will determine.
16.2 OTHER TREATMENT OF AWARDS. Subject to any greater rights granted to
Participants under the foregoing provisions of this Section 16, in the event of
the occurrence of any transaction described in Section 16.1, any outstanding
Awards will be treated as provided in the applicable agreement or plan of
merger, consolidation, dissolution, liquidation, sale of assets or other
"corporate transaction."
16.3 ASSUMPTION OF AWARDS BY THE COMPANY. The Company, from time to time,
also may substitute or assume outstanding awards granted by another company,
whether in connection with an acquisition of such other company or otherwise, by
either; (a) granting an Award under this Plan in substitution of such other
company's award; or (b) assuming such award as if it had been granted under this
Plan if the terms of such assumed award could be applied to an Award granted
under this Plan. Such substitution or assumption will be permissible if the
holder of the substituted or assumed award would have been eligible to be
granted an Award under this Plan if the other company had applied the rules of
this Plan to such grant. In the event the Company assumes an award granted by
another company, the terms and conditions of such award will remain unchanged
(EXCEPT that the exercise price and the number and nature of Shares issuable
upon exercise of any such option will be adjusted appropriately pursuant to
Section 424(a) of the Code). In the event the Company elects to grant a new
Option rather than assuming an existing option, such new Option may be granted
with a similarly adjusted Exercise Price.
17. ADOPTION AND STOCKHOLDER APPROVAL. This Plan will become effective on
the date that it is adopted by the Board (the "EFFECTIVE DATE"). This Plan shall
be approved by the stockholders of the Company (excluding Shares issued pursuant
to this Plan), consistent with applicable laws, within twelve (12) months before
or after the Effective Date. Upon the Effective Date, the Board may grant Awards
pursuant to this Plan; PROVIDED, HOWEVER, that: (a) no Option may be exercised
prior to initial stockholder approval of this Plan; (b) no Option granted
pursuant to an increase in the number of Shares subject to this Plan approved by
the Board will be exercised prior to the time such increase has been approved by
the stockholders of the Company; and (c) in the event that stockholder approval
of this Plan or any amendment increasing the number of Shares subject to this
Plan is not obtained, all Awards granted hereunder will be canceled, any Shares
issued pursuant to any Award will be canceled, and any purchase of Shares
hereunder will be rescinded. So long as the Company is subject to Section 16(b)
of the Exchange Act, the Company will comply with the requirements of Rule 16b-3
(or its successor), as amended, with respect to stockholder approval.
18. TERM OF PLAN. Unless earlier terminated as provided herein, this Plan
will terminate ten (10) years from the date this Plan is adopted by the Board
or, if earlier, the date of stockholder approval.
19. AMENDMENT OR TERMINATION OF PLAN. The Board may at any time terminate
or amend this Plan in any respect, including without limitation amendment of any
form of Award Agreement or instrument to be executed pursuant to this Plan;
PROVIDED, HOWEVER, that the Board will not, without the approval of the
stockholders of the Company, amend this Plan in any manner that requires such
stockholder approval pursuant to the Code or the regulations promulgated
thereunder as such provisions apply to ISO plans or (if the Company is subject
to the Exchange Act or Section 16(b) of the Exchange Act) pursuant to the
Exchange Act or Rule 16b-3 (or its successor), as amended, thereunder,
respectively.
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20. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of this Plan by the
Board, the submission of this Plan to the stockholders of the Company for
approval, nor any provision of this Plan will be construed as creating any
limitations on the power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including, without limitation, the
granting of stock options and bonuses otherwise than under this Plan, and such
arrangements may be either generally applicable or applicable only in specific
cases.
21. DEFINITIONS. As used in this Plan, the following terms will have the
following meanings:
"AFFILIATE" means any corporation that directly, or indirectly through one
or more intermediaries, controls or is controlled by, or is under common control
with, another corporation, where "control" (including the terms "controlled by"
and "under common control with") means the possession, direct or indirect, of
the power to cause the direction of the management and policies of the
corporation, whether through the ownership of voting securities, by contract or
otherwise.
"AWARD" means any award under this Plan, including any Option.
"AWARD AGREEMENT" means, with respect to each Award, the signed written
agreement between the Company and the Participant setting forth the terms and
conditions of the Award.
"BOARD" means the Board of Directors of the Company.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMITTEE" means the committee appointed by the Board to administer this
Plan, or if no such committee is appointed, the Board.
"COMPANY" means Symantec Corporation, a corporation organized under the laws
of the State of Delaware, or any successor corporation.
"DISABILITY" means a disability, whether temporary or permanent, partial or
total, within the meaning of Section 22(e)(3) of the Code, as determined by the
Committee.
"DISINTERESTED PERSON" means a director who has not, during the period that
person is a member of the Committee and for one year prior to commencing service
as a member of the Committee, been granted or awarded equity securities pursuant
to this Plan or any other plan of the Company or any Parent, Subsidiary or
Affiliate of the Company, except in accordance with the requirements set forth
in Rule 16b-3(c)(2)(i) (and any successor regulation thereto) as promulgated by
the SEC under Section 16(b) of the Exchange Act, as such rule is amended from
time to time and as interpreted by the SEC.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXERCISE PRICE" means the price at which a holder of an Option may purchase
the Shares issuable upon exercise of the Option.
"FAIR MARKET VALUE" means, as of any date, the value of a share of the
Company's Common Stock determined as follows:
(a) if such Common Stock is then quoted on the Nasdaq National Market,
its closing price on the Nasdaq National Market on the last trading day
prior to the date of determination as reported in THE WALL STREET JOURNAL;
(b) if such Common Stock is publicly traded and is then listed on a
national securities exchange, its closing price on the last trading day
prior to the date of determination on the principal national securities
exchange on which the Common Stock is listed or admitted to trading as
reported in THE WALL STREET JOURNAL;
(c) if such Common Stock is publicly traded but is not quoted on the
Nasdaq National Market nor listed or admitted to trading on a national
securities exchange, the average of the closing bid and asked prices on the
last trading day prior to the date of determination as reported in THE WALL
STREET JOURNAL; or
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(d) if none of the foregoing is applicable, by the Committee in good
faith.
"INSIDER" means an officer or director of the Company or any other person
whose transactions in the Company's Common Stock are subject to Section 16 of
the Exchange Act.
"OUTSIDE DIRECTOR" means any director who is not; (a) a current employee of
the Company or any Parent, Subsidiary or Affiliate of the Company; (b) a former
employee of the Company or any Parent, Subsidiary or Affiliate of the Company
who is receiving compensation for prior services (other than benefits under a
tax-qualified pension plan); (c) a current or former officer of the Company or
any Parent, Subsidiary or Affiliate of the Company; or (d) currently receiving
compensation for personal services in any capacity, other than as a director,
from the Company or any Parent, Subsidiary or Affiliate of the Company;
PROVIDED, HOWEVER, that at such time as the term "Outside Director", as used in
Section 162(m) of the Code is defined in regulations promulgated under Section
162(m) of the Code, "Outside Director" will have the meaning set forth in such
regulations, as amended from time to time and as interpreted by the Internal
Revenue Service.
"OPTION" means an award of an option to purchase Shares pursuant to Section
5.
"PARENT" means any corporation (other than the Company) in an unbroken chain
of corporations ending with the Company, if at the time of the granting of an
Award under this Plan, each of such corporations other than the Company owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
"PARTICIPANT" means a person who receives an Award under this Plan.
"PLAN" means this Symantec Corporation 1996 Equity Incentive Plan, as
amended from time to time.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHARES" means shares of the Company's Common Stock reserved for issuance
under this Plan, as adjusted pursuant to Sections 2 and 16, and any successor
security.
"SUBSIDIARY" means any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company if, at the time of granting of
the Award, each of the corporations other than the last corporation in the
unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.
"TERMINATION" or "TERMINATED" means, for purposes of this Plan with respect
to a Participant, that the Participant has for any reason ceased to provide
services as an employee, director, consultant, independent contractor or advisor
to the Company or a Parent, Subsidiary or Affiliate of the Company, except in
the case of sick leave, military leave, or any other leave of absence approved
by the Committee, provided that such leave is for a period of not more than
ninety (90) days, or reinstatement upon the expiration of such leave is
guaranteed by contract or statute. The Committee will have sole discretion to
determine whether a Participant has ceased to provide services and the effective
date on which the Participant ceased to provide services (the "TERMINATION
DATE").
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ANNEX B
SYMANTEC CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
(ADOPTED BY THE BOARD OF DIRECTORS ON OCTOBER 24, 1989)
(AS PROPOSED TO BE AMENDED)
1. ESTABLISHMENT OF PLAN
Symantec Corporation (the "Company") proposes to grant options for purchase
of the Company's Common Stock to eligible employees of the Company and
Subsidiaries (as hereinafter defined) pursuant to this Employee Stock Purchase
Plan (the "Plan"). For purposes of this Plan, "parent corporation" and
"Subsidiary" (collectively, "Subsidiaries") shall have the same meanings as
"parent corporation" and "subsidiary corporation" in Section 424, of the
Internal Revenue Code of 1986, as amended (the "Code"). The Company intends that
the Plan shall qualify as an "employee stock purchase plan" under Section 423 of
the Code (including any amendments or replacements of such section), and the
Plan shall be so construed. Any term not expressly defined in the Plan but
defined for purposes of Section 423 of the Code shall have the same definition
herein. A total of 3,400,000 shares of Common Stock are reserved for issuance
under the Plan. Such number shall be subject to adjustments effected in
accordance with Section 14 of the Plan.
2. PURPOSES
The purpose of the Plan is to provide employees of the Company and
Subsidiaries designated by the Board of Directors as eligible to participate in
the Plan with a convenient means to acquire an equity interest in the Company
through payroll deductions, to enhance such employees' sense of participation in
the affairs of the Company and Subsidiaries, and to provide an incentive for
continued employment.
3. ADMINISTRATION
The Plan is administered by the Board of Directors of the Company or by a
committee designated by the Board of Directors of the Company (in which event
all references herein to the Board of Directors shall be to the committee).
Subject to the provisions of the Plan and the limitations of Section 423 of the
Code or any successor provision in the Code, all questions of interpretation or
application of the Plan shall be determined by the Board and its decisions shall
be final and binding upon all participants. Members of the Board shall receive
no compensation for their services in connection with the administration of the
Plan, other than standard fees as established from time to time by the Board of
Directors of the Company for services rendered by Board members serving on Board
committees. All expenses incurred in connection with the administration of the
Plan shall be paid by the Company.
4. ELIGIBILITY
Any employee of the Company or the Subsidiaries is eligible to participate
in an Offering Period (as hereinafter defined) under the Plan except the
following:
(a) employees who are not employed by the Company or Subsidiaries on the
third business day before the beginning of such Offering Period;
(b) employees who are customarily employed for less than 20 hours per
week;
(c) employees who are customarily employed for less than 5 months in a
calendar year;
(d) employees who, together with any other person whose stock would be
attributed to such employee pursuant to Section 425(d) of the Code, own
stock or hold options to purchase stock or who, as a result of being granted
an option under the Plan with respect to such Offering Period, would own
stock or hold options to purchase stock possessing 5 percent or more of the
total combined voting power or value of all classes of stock of the Company
or any of its Subsidiaries; and
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(e) employees who would, by virtue of their participation in such
Offering Period, be participating simultaneously in more than one Offering
Period under the Plan.
5. OFFERING DATES
The Offering Periods of the Plan (the "Offering Period") shall be of 24
months duration commencing January 1 and July 1 of each year and ending on the
second December 31 and June 30, respectively, thereafter. The first day of each
Offering Period is referred to as the "Offering Date." Except as provided in the
next succeeding sentence, each Offering Period shall consist of four six-month
purchase periods (individually, a "Purchase Period") during which payroll
deductions of the participant are accumulated under this Plan. Each such
six-month Purchase Period shall commence on each January 1 and July 1 of an
Offering Period and shall end on the next June 30 and December 31, respectively;
provided, however, that the first two Purchase Periods during the initial
Offering Period shall commence on January 1 and October 1, respectively, and end
on September 30 and December 31, respectively. The last business day of each
Purchase Period is hereinafter referred to as the Purchase Date. The Board of
Directors of the Company shall have the power to change the duration of Offering
Periods or Purchase Periods with respect to future offerings without stockholder
approval if such change is announced at least fifteen (15) days prior to the
scheduled beginning of the first Offering Period or Purchase Period, as the case
may be, to be affected.
6. PARTICIPATION IN THE PLAN
Eligible employees may become participants in an Offering Period under the
Plan on the first Offering Date after satisfying the eligibility requirements by
delivering to the Company's or Subsidiary's (whichever employs such employee)
treasury department (the "treasury department") not later than the 15th day of
the month before such Offering Date (or not later than the 22nd day of the month
for the first Offering Date) unless a later time for filing the subscription
agreement is set by the Board for all eligible Employees with respect to a given
Offering Period a subscription agreement authorizing payroll deductions. An
eligible employee who does not deliver a subscription agreement to the treasury
department by such date after becoming eligible to participate in such Offering
Period under the Plan shall not participate in that Offering Period or any
subsequent Offering Period unless such employee enrolls in the Plan by filing
the subscription agreement with the treasury department not later than the 15th
day of the month preceding a subsequent Offering Date. Once an employee becomes
a participant in an Offering Period, such employee will automatically
participate in the Offering Period commencing immediately following the last day
of the prior Offering Period unless the employee withdraws from the Plan or
terminates further participation in the Offering Period as set forth in Section
11 below. Such participant is not required to file any additional subscription
agreements in order to continue participation in the Plan. Any participant whose
option expires and who has not withdrawn from the Plan pursuant to Section 11
below will automatically be re-enrolled in the Plan and granted a new option on
the Offering Date of the next Offering Period. A participant in the Plan may
participate in only one Offering Period at any time.
7. GRANT OF OPTION ON ENROLLMENT
Enrollment by an eligible employee in the Plan with respect to an Offering
Period will constitute the grant (as of the Offering Date) by the Company to
such employee of an option to purchase on each Purchase Date up to that number
of shares of Common Stock of the Company determined by dividing the amount
accumulated in such employee's payroll deduction account during such Purchase
Period by the lower of (i) eighty-five percent (85%) of the fair market value of
a share of the Company's Common Stock on the Offering Date (the "Entry Price")
or (ii) eighty-five percent (85%) of the fair market value of a share of the
Company's Common Stock on the Purchase Date, provided, however, that the number
of shares of the Company's Common Stock subject to any option granted pursuant
to this Plan shall not exceed the lesser of (a) the maximum number of shares set
by the Board pursuant to Section 10(c) below with respect to all Purchase
Periods within the applicable Offering Period or Purchase Period, or (b) 200% of
the number of shares determined by using 85% of the fair market
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value of a share of the Company's Common Stock on the Offering Date as the
denominator. Fair market value of a share of the Company's Common Stock shall be
determined as provided in Section 8 hereof.
8. PURCHASE PRICE
The purchase price per share at which a share of Common Stock will be sold
in any Offering Period shall be 85 percent of the lesser of:
(a) The fair market value on the Offering Date; or
(b) The fair market value on the Purchase Date.
For purposes of the Plan, the term "fair market value" on a given date shall
mean the closing price from the previous day's trading of a share of the
Company's Common Stock as reported on the NASDAQ National Market System.
9. PAYMENT OF PURCHASE PRICE; CHANGES IN PAYROLL DEDUCTIONS; ISSUANCE OF SHARES
(a) The purchase price of the shares is accumulated by regular payroll
deductions made during each Purchase Period. The deductions are made as a
percentage of the employee's compensation in one percent increments not less
than 2 percent nor greater than 10 percent. Compensation shall mean all W-2
compensation, including, but not limited to base salary, wages, commissions,
overtime, shift premiums and bonuses, plus draws against commissions; provided,
however, that for purposes of determining a participant's compensation, any
election by such participant to reduce his or her regular cash remuneration
under Sections 125 or 401(k) of the Code shall be treated as if the participant
did not make such election. Payroll deductions shall commence on the first
payday following the Offering Date and shall continue to the end of the Offering
Period unless sooner altered or terminated as provided in the Plan.
(b) A participant may lower (but not increase) the rate of payroll
deductions during a Purchase Period by filing with the treasury department a new
authorization for payroll deductions, in which case the new rate shall become
effective for the next payroll period commencing more than 15 days after the
treasury department's receipt of the authorization and shall continue for the
remainder of the Offering Period unless changed as described below. Such change
in the rate of payroll deductions may be made at any time during an Offering
Period, but not more than one change may be made effective during any Purchase
Period. A participant may increase or lower the rate of payroll deductions for
any subsequent Purchase Period by filing with the treasury department a new
authorization for payroll deductions not later than the 15th day of the month
before the beginning of such Purchase Period.
(c) All payroll deductions made for a participant are credited to his or her
account under the Plan and are deposited with the general funds of the Company;
no interest accrues on the payroll deductions. All payroll deductions received
or held by the Company may be used by the Company for any corporate purpose, and
the Company shall not be obligated to segregate such payroll deductions.
(d) On each Purchase Date, so long as the Plan remains in effect and
provided that the participant has not submitted a signed and completed
withdrawal form before that date which notifies the Company that the participant
wishes to withdraw from that Offering Period under the Plan and have all payroll
deductions accumulated in the account maintained on behalf of the participant as
of that date returned to the participant, the Company shall apply the funds then
in the participant's account to the purchase of whole shares of Common Stock
reserved under the option granted to such participant with respect to the
Offering Period to the extent that such option is exercisable on the Purchase
Date. The purchase price per share shall be as specified in Section 8 of the
Plan. Any cash remaining in a participant's account after such purchase of
shares shall be refunded to such participant in cash; provided, however, that
any amount remaining in such participant's account on a Purchase Date which is
less than the amount necessary to purchase a full share of Common Stock of the
Company shall be carried forward, without interest, into the next Purchase
Period or Offering Period, as the
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case may be. In the event that the Plan has been oversubscribed, all funds not
used to purchase shares on the Purchase Date shall be returned to the
participant. No Common Stock shall be purchased on a Purchase Date on behalf of
any employee whose participation in the Plan has terminated prior to such
Purchase Date.
(e) As promptly as practicable after the Purchase Date, the Company shall
arrange the delivery to each participant, as appropriate, of a certificate
representing the shares purchased upon exercise of his option; provided that the
Board may deliver certificates to a broker or brokers that hold such certificate
in street name for the benefit of each such participant.
(f) During a participant's lifetime, such participant's option to purchase
shares hereunder is exercisable only by him or her. The participant will have no
interest or voting right in shares covered by his or her option until such
option has been exercised. Shares to be delivered to a participant under the
Plan will be registered in the name of the participant or in the name of the
participant and his or her spouse.
10. LIMITATIONS ON SHARES TO BE PURCHASED
(a) No employee shall be entitled to purchase stock under the Plan at a rate
which, when aggregated with his or her rights to purchase stock under all other
employee stock purchase plans of the Company or any Subsidiary, exceeds $25,000
in fair market value, determined as of the Offering Date (or such other limit as
may be imposed by the Code) for each calendar year in which the employee
participates in the Plan.
(b) No more than 200% of the number of shares determined by using 85% of the
fair market value of a share of the Company's Common Stock on the Offering Date
as the denominator may be purchased by a participant on any single Purchase
Date.
(c) No employee shall be entitled to purchase more than the Maximum Share
Amount (as defined below) on any single Purchase Date. Not less than thirty days
prior to the commencement of any Purchase Period, the Board may, in its sole
discretion, set a maximum number of shares which may be purchased by any
employee at any single Purchase Date (hereinafter the "Maximum Share Amount").
In no event shall the Maximum Share Amount exceed the amounts permitted under
Section 10(b) above. If a new Maximum Share Amount is set, then all participants
must be notified of such Maximum Share Amount not less than fifteen days prior
to the commencement of the next Purchase Period. Once the Maximum Share Amount
is set, it shall continue to apply in respect of all succeeding Purchase Dates
and Purchase Periods unless revised by the Board as set forth above.
(d) If the number of shares to be purchased on a Purchase Date by all
employees participating in the Plan exceeds the number of shares then available
for issuance under the Plan, the Company will make a PRO RATA allocation of the
remaining shares in as uniform a manner as shall be practicable and as the Board
shall determine to be equitable. In such event, the Company shall give written
notice of such reduction of the number of shares to be purchased under a
participant's option to each employee affected thereby.
(e) Any payroll deductions accumulated in a participant's account which are
not used to purchase stock due to the limitations in this Section 10 shall be
returned to the participant as soon as practicable after the end of the Offering
Period.
11. WITHDRAWAL
(a) Each participant may withdraw from an Offering Period under the Plan by
signing and delivering to the treasury department notice on a form provided for
such purpose. Such withdrawal may be elected at any time at least 15 days prior
to the end of an Offering Period.
(b) Upon withdrawal from the Plan, the accumulated payroll deductions shall
be returned to the withdrawn employee and his or her interest in the Plan shall
terminate. In the event an employee voluntarily elects to withdraw from the
Plan, he or she may not resume his or her participation in the
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Plan during the same Offering Period, but he or she may participate in any
Offering Period under the Plan which commences on a date subsequent to such
withdrawal by filing a new authorization for payroll deductions in the same
manner as set forth above for initial participation in the Plan.
(c) If the purchase price on the first day of any current Offering Period in
which a participant is enrolled is higher than the purchase price on the first
day of any subsequent Offering Period, the Company will automatically enroll
such participant in the subsequent Offering Period . A participant does not need
to file any forms with the Company to automatically be enrolled in the
subsequent Offering Period.
12. TERMINATION OF EMPLOYMENT
Termination of a participant's employment for any reason, including
retirement or death or the failure of a participant to remain an eligible
employee, terminates his or her participation in the Plan immediately. In such
event, the payroll deductions credited to the participant's account will be
returned to him or her or, in the case of his or her death, to his or her legal
representative. For this purpose, an employee will not be deemed to have
terminated employment or failed to remain in the continuous employ of the
Company in the case of sick leave, military leave, or any other leave of absence
approved by the Board of Directors of the Company; provided that such leave is
for a period of not more than ninety (90) days or reemployment upon the
expiration of such leave is guaranteed by contract or statute.
13. RETURN OF PAYROLL DEDUCTIONS
In the event an employee's interest in the Plan is terminated by withdrawal,
termination of employment or otherwise, or in the event the Plan is terminated
by the Board, the Company shall promptly deliver to the employee all payroll
deductions credited to his or her account. No interest shall accrue on the
payroll deductions of a participant in the Plan.
14. CAPITAL CHANGES
Subject to any required action by the stockholders of the Company, the
number of shares of Common Stock covered by each option under the Plan which has
not yet been exercised and the number of shares of Common Stock which have been
authorized for issuance under the Plan but have not yet been placed under option
(collectively, the "Reserves"), as well as the price per share of Common Stock
covered by each option under the Plan which has not yet been exercised, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split or the payment of a stock
dividend (but only on the Common Stock) or any other increase or decrease in the
number of shares of Common Stock effected without receipt of consideration by
the Company; provided, however, that conversion of any convertible securities of
the Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an option.
In the event of the proposed dissolution or liquidation of the Company, the
Offering Period will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Board. The Board may, in the
exercise of its sole discretion in such instances, declare that the options
under the Plan shall terminate as of a date fixed by the Board and give each
participant the right to exercise his or her option as to all of the optioned
stock, including shares which would not otherwise be exercisable. In the event
of a proposed sale of all or substantially all of the assets of the Company, or
the merger of the Company with or into another corporation, each option under
the Plan shall be assumed or an equivalent option shall be substituted by such
successor corporation or a parent or subsidiary of such successor corporation,
unless the Board determines, in the exercise of its sole discretion and in lieu
of such assumption or substitution, that the participant shall have the right to
exercise the option as to all of the optioned stock. If the Board makes an
option exercisable in lieu of
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assumption or substitution in the event of a merger or sale of assets, the Board
shall notify the participant that the option shall be fully exercisable for a
period of twenty (20) days from the date of such notice, and the option will
terminate upon the expiration of such period.
The Board may, if it so determines in the exercise of its sole discretion,
also make provision for adjusting the Reserves, as well as the price per share
of Common Stock covered by each outstanding option, in the event that the
Company effects one or more reorganizations, recapitalizations, rights offerings
or other increases or reductions of shares of its outstanding Common Stock, and
in the event of the Company being consolidated with or merged into any other
corporation.
15. NONASSIGNABILITY
Neither payroll deductions credited to a participant's account nor any
rights with regard to the exercise of an option or to receive shares under the
Plan may be assigned, transferred, pledged or otherwise disposed of in any way
(other than by will, the laws of descent and distribution or as provided in
Section 22 hereof) by the participant. Any such attempt at assignment, transfer,
pledge or other disposition shall be without effect.
16. REPORTS
Individual accounts will be maintained for each participant in the Plan.
Each participant shall receive promptly after the end of each Purchase Period a
report of his account setting forth the total payroll deductions accumulated,
the number of shares purchased, the per share price thereof and the remaining
cash balance, if any, carried forward to the next Purchase Period or Offering
Period, as the case may be.
17. NOTICE OF DISPOSITION
Each participant shall notify the Company if the participant disposes of any
of the shares purchased in any Offering Period pursuant to this Plan if such
disposition occurs within two years from the Offering Date or within six months
from the Purchase Date on which such shares were purchased (the "Notice
Period"). Unless such participant is disposing of any of such shares during the
Notice Period, such participant shall keep the certificates representing such
shares in his or her name (and not in the name of a nominee) during the Notice
Period. The Company may, at any time during the Notice Period, place a legend or
legends on any certificate representing shares acquired pursuant to the Plan
requesting the Company's transfer agent to notify the Company of any transfer of
the shares. The obligation of the participant to provide such notice shall
continue notwithstanding the placement of any such legend on certificates.
18. NO RIGHTS TO CONTINUED EMPLOYMENT
Neither this Plan nor the grant of any option hereunder shall confer any
right on any employee to remain in the employ of the Company or any Subsidiary
or restrict the right of the Company or any Subsidiary to terminate such
employee's employment.
19. EQUAL RIGHTS AND PRIVILEGES
All eligible employees shall have equal rights and privileges with respect
to the Plan so that the Plan qualifies as an "employee stock purchase plan"
within the meaning of Section 423 or any successor provision of the Code and the
related regulations. Any provision of the Plan which is inconsistent with
Section 423 or any successor provision of the Code shall without further act or
amendment by the Company or the Board be reformed to comply with the
requirements of Section 423. This Section 19 shall take precedence over all
other provisions in the Plan.
20. NOTICES
All notices or other communications by a participant to the Company under or
in connection with the Plan shall be deemed to have been duly given when
received in the form specified by the Company at the location, or by the person,
designated by the Company for the receipt thereof.
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21. STOCKHOLDER APPROVAL OF AMENDMENTS
Any required approval of the stockholders of the Company shall be solicited
substantially in accordance with Section 14(a) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the rules and regulations promulgated
thereunder. Such approval of an amendment shall be solicited at or prior to the
first annual meeting of stockholders held subsequent to the grant of an option
under the Plan as then amended to an officer or director of the Company. If such
stockholder approval is obtained at a duly held stockholders' meeting, it must
be obtained by the affirmative vote of the holders of a majority of the
outstanding shares of the Company, or if such stockholder approval is obtained
by written consent, it must be obtained by the unanimous written consent of all
stockholders of the Company; provided, however, that approval at a meeting or by
written consent may be obtained by a lesser degree of stockholder approval if
the Board determines, in its discretion after consultation with the Company's
legal counsel, that such lesser degree of stockholder approval will comply with
all applicable laws and will not adversely affect the qualification of the Plan
under Section 423 of the Code or Rule 16b-3 promulgated under the Exchange Act
("Rule 16b-3").
22. DESIGNATION OF BENEFICIARY
(a) A participant may file a written designation of a beneficiary who is to
receive any shares and cash, if any, from the participant's account under the
Plan in the event of such participant's death subsequent to the end of a
Purchase Period but prior to delivery to him of such shares and cash. In
addition, a participant may file a written designation of a beneficiary who is
to receive any cash from the participant's account under the Plan in the event
of such participant's death prior to a Purchase Date.
(b) Such designation of beneficiary may be changed by the participant at any
time by written notice. In the event of the death of a participant and in the
absence of a beneficiary validly designated under the Plan who is living at the
time of such participant's death, the Company shall deliver such shares or cash
to the executor or administrator of the estate of the participant, or if no such
executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may deliver such shares or cash to the spouse or
to any one or more dependents or relatives of the participant, or if no spouse,
dependent or relative is known to the Company, then to such other person as the
Company may designate.
23. CONDITIONS UPON ISSUANCE OF SHARES; LIMITATION ON SALE OF SHARES
Shares shall not be issued with respect to an option unless the exercise of
such option and the issuance and delivery of such shares pursuant thereto shall
comply with all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act of 1933, as amended, the Exchange Act,
the rules and regulations promulgated thereunder, and the requirements of any
stock exchange upon which the shares may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.
So long as the purchase of shares on a Purchase Date is exempt from the
operation of Section 16(b) of the Exchange Act by the operation of Rule 16b-6
promulgated under the Exchange Act, shares purchased by a person subject to the
requirements of Section 16(b) of the Exchange Act may not be sold prior to the
expiration of six (6) months from the Purchase Date on which such shares were
purchased or such other date as may be required by Rule 16b-3 (or any successor
rule).
24. APPLICABLE LAW
The Plan shall be governed by the substantive laws (excluding the conflict
of laws rules) of the State of Delaware.
25. AMENDMENT OR TERMINATION OF THE PLAN
This Plan shall be effective January 1, 1990, subject to approval by the
stockholders of the Company within twelve (12) months after the date the Plan is
adopted by the Board of Directors of the Company and the Plan shall continue
until the earlier to occur of termination by the Board, issuance
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of all of the shares of Common Stock reserved for issuance under the Plan, or
ten (10) years from the adoption of the Plan by the Board. The Board of
Directors of the Company may at any time amend or terminate the Plan, except
that any such termination cannot affect options previously granted under the
Plan, nor may any amendment make any change in an option previously granted
which would adversely affect the right of any participant, nor may any amendment
be made without approval of the stockholders of the Company obtained in
accordance with Section 21 hereof within 12 months of the adoption of such
amendment (or earlier if required by Section 21) if such amendment would:
(a) Increase the number of shares that may be issued under the Plan;
(b) Change the designation of the employees (or class of employees)
eligible for participation in the Plan; or
(c) Constitute an amendment for which stockholder approval is required
in order to comply with Rule 16b-3 (or any successor rule) of the Exchange
Act.
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SYMANTEC CORPORATION
10201 TORRE AVENUE
CUPERTINO, CALIFORNIA 95014
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 25, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder(s) appoints Robert R.B. Dykes and Derek P.
Witte, and each of them, with full power of substitution, as attorneys and
proxies for and in the name and place of the undersigned, and hereby authorizes
each of them to represent and to vote all of the shares of Common Stock of
Symantec Corporation ("Symantec") and all of the Exchangeable Shares of Delrina
Corporation, a wholly owned subsidiary of Symantec, that are held of record by
the undersigned as of July 28, 1996 which the undersigned is entitled to vote at
the Annual Meeting of Stockholders of Symantec to be held on September 25, 1996,
at Symantec Corporation, 10201 Torre Avenue, Cupertino, California, at 9:00
a.m., (Pacific Time), and at any adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED AND RETURNED IN A TIMELY MANNER WILL BE
VOTED AT THE ANNUAL MEETING AND AT ANY ADJOURNMENT THEREOF IN THE MANNER
DESCRIBED HEREIN. IF NO CONTRARY INDICATION IS MADE THE PROXY WILL BE VOTED FOR
THE PROPOSALS AND IN ACCORDANCE WITH THE JUDGMENT OF THE PERSONS NAMED AS
PROXIES HEREIN ON ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE ANNUAL
MEETING.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
CONTINUED AND TO BE SIGNED AND DATED ON REVERSE SIDE
SEE REVERSE SIDE
<PAGE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR PROPOSALS 1,
2, 3 and 4.
1. PROPOSAL TO ELECT THE FOLLOWING DIRECTORS:
WALTER W. BREGMAN For: _______
Against: _______
LESLIE L. VADASZ For: _______
Against: _______
GORDON E. EUBANKS, JR. For: _______
Against: _______
CARL D. CARMAN For: _______
Against: _______
CHARLES M. BOESENBERG For: _______
Against: _______
ROBERT S. MILLER For: _______
Against: _______
2. PROPOSAL TO AMEND SYMANTEC'S 1996
EQUITY INCENTIVE PLAN: For: ______ Against: ______
3. PROPOSAL TO AMEND SYMANTEC'S 1989
EMPLOYEE STOCK PURCHASE PLAN: For: ______ Against: ______
4. PROPOSAL TO RATIFY THE SELECTION
OF THE INDEPENDENT AUDITORS: For: ______ Against: ______
/ / MARK HERE FOR ADDRESS CHANGE
AND NOTE AT LEFT
This Proxy must be signed exactly
as your name appears hereon. When
shares are held by joint tenants,
both should sign. Attorneys,
executors, administrators, trustees
and guardians should indicate their
capacities. If the signer is a
corporation, please print full
corporate name and indicate
capacity of duly authorized officer
executing on behalf of the
corporation. If the signer is a
partnership, please print full
partnership name and indicate
capacity of duly authorized person
executing on behalf of the
partnership.
(REVERSE SIDE)
SIGNATURE(S): ______________________________ DATE: ______, 1996
