<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
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] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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> 2
LOGO
10201 TORRE AVENUE
CUPERTINO, CALIFORNIA 95014
------------------------
JULY 30, 1999
------------------------
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's City Center offices, City Center 1, 20300
Stevens Creek Boulevard, Suite 200, Cupertino, California 95014, on September
15, 1999 at noon (Pacific time) (the "Meeting").
At the Meeting, you will be asked to (a) elect seven directors to
Symantec's Board of Directors (the "Board"), each to hold office until his or
her successor is elected and qualified or until his or her 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
3,211,400 shares of Symantec Common Stock, which will raise the 96 Plan's limit
on shares that may be issued pursuant to awards granted thereunder from
9,001,802 to 12,213,202; (c) vote upon a proposal to amend Symantec's 1998
Employee Stock Purchase Plan (the "Stock Purchase Plan") to make available for
issuance thereunder an additional 760,000 shares of Symantec Common Stock, which
will raise the Stock Purchase Plan's limit on shares that may be issued pursuant
to awards granted thereunder from 500,000 to 1,260,000 and to increase the limit
on such shares by 1% of Symantec's outstanding shares on each January 1
thereafter; and (d) ratify the selection of Ernst & Young LLP as Symantec's
independent auditors for the 2000 fiscal year. After careful consideration, your
Board of Directors unanimously recommends that you vote for the seven 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.
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,
[SIGNATURE]
John W. Thompson
President and Chief Executive Officer
<PAGE> 3
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 noon
(Pacific time) September 15, 1999 at Symantec Corporation's City Center offices,
City Center 1, 20300 Stevens Creek Boulevard, Suite 200, Cupertino, California
95014, for the following purposes:
1. To elect seven directors to Symantec's Board of Directors (the
"Board"), each to hold office until his or her successor is elected and
qualified or until his or her 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 3,211,400 shares of Symantec Common Stock, which will raise the
96 Plan's limit on shares that may be issued pursuant to awards granted
thereunder from 9,001,802 to 12,213,202;
3. To vote upon a proposal to amend Symantec's 1998 Employee Stock
Purchase Plan (the "Stock Purchase Plan") to make available for issuance
thereunder an additional 760,000 shares of Symantec Common Stock, which
will raise the Stock Purchase Plan's limit on shares that may be issued
pursuant to awards granted thereunder from 500,000 to 1,260,000 and to
increase the limit on such shares by 1% of Symantec's outstanding shares of
Common Stock on each January 1 during the term of the Stock Purchase Plan;
4. To ratify the selection of Ernst & Young LLP as Symantec's
independent auditors for the 2000 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.
Only stockholders of record as of July 20, 1999 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
signature
Derek P. Witte
Vice President, Worldwide Operations
Operations and Secretary
Cupertino, California
July 30, 1999
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.
i
<PAGE> 4
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 noon (Pacific time) on September 15, 1999 at Symantec
Corporation's City Center offices, City Center 1, 20300 Stevens Creek Boulevard,
Suite 200, Cupertino, California 95014, 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 August 6, 1999.
------------------------
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.
ii
<PAGE> 5
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 Proxies................................... 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............................................. 6
Compensation of Executive Officers........................ 7
REPORT OF THE COMPENSATION COMMITTEE AND BOARD ON EXECUTIVE
COMPENSATION.............................................. 9
COMPARISON OF CUMULATIVE TOTAL RETURN....................... 15
EMPLOYMENT AGREEMENTS AND CHANGE OF CONTROL AGREEMENTS...... 17
CERTAIN TRANSACTIONS........................................ 17
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 1998
Employee Stock Purchase Plan........................... 24
Proposal No. 4 Ratification of Selection of Independent
Auditors............................................... 28
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE..... 29
STOCKHOLDER PROPOSALS....................................... 29
OTHER BUSINESS.............................................. 29
AVAILABLE INFORMATION....................................... 29
ANNEX A -- Symantec Corporation's 1996 Equity Incentive
Plan...................................................... A-1
ANNEX B -- Symantec Corporation's Proposed 1998 Employee
Stock Purchase Plan....................................... B-1
</TABLE>
iii
<PAGE> 6
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's City Center offices, City Center 1, 20300 Stevens Creek
Boulevard, Suite 200, Cupertino, California 95014, on September 15, 1999 at noon
(Pacific time). Only holders of record of (i) Symantec Common Stock or (ii)
Exchangeable Shares at the close of business on July 20, 1999 (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)
55,074,611 shares of Symantec Common Stock and (ii) 1,659,684 Exchangeable
Shares. The sum of the shares requested for issuance under the 1996 Equity
Incentive Plan (the "96 Plan") and the 1998 Employee Stock Purchase Plan (the
"Stock Purchase Plan"), excluding shares requested to be added to the Stock
Purchase Plan each January 1 during the term of the Stock Purchase Plan, will be
approximately 7% of the outstanding shares of Symantec Common Stock as of the
Record Date. 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").
A majority, or 28,367,148, 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 August 6,
1999.
REVOCABILITY OF PROXIES
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
$7,000, 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
each 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 approval of
<PAGE> 7
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 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 solely 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>
John W. Thompson.......... 50 Chairman of the Board, President and Chief Executive
Officer
Greg Myers................ 49 Chief Financial Officer, Vice President of Finance
Christopher Calisi........ 39 Vice President, Remote Productivity Solutions Business
Unit
Dieter Giesbrecht......... 55 Vice President, Europe, Middle East and Africa ('EMEA')
Keith Robinson............ 42 Vice President, Americas
Enrique T. Salem.......... 33 Vice President, Security and Assistance Business Unit
and Chief Technical Officer
Dana E. Siebert........... 39 Executive Vice President, Worldwide Sales, Marketing and
Services
Derek Witte............... 42 Vice President, Worldwide Operations and Secretary
Carl D. Carman(2)(3)...... 63 Director
Walter W. Bregman(1)...... 65 Director
Robert S. Miller(1)(2).... 57 Director
Charles M. 51 Director
Boesenberg(3)...........
Robert R.B. Dykes(3)...... 50 Director
Tania Amochaev(2)......... 50 Director
</TABLE>
- ---------------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
(3) Member of the Nominating Committee.
The Board of Directors chooses executive officers, who then serve at the Board's
discretion. There is no family relationship between any of our directors or
executive officers and any other director or executive officer of Symantec.
John W. Thompson has served as President, Chief Executive Officer and
Chairman of the Board of Directors, since May 1999. Mr. Thompson joined Symantec
after 28 years at IBM Corporation. In his most recent position as General
Manager of IBM Americas, he was responsible for sales and support of IBM's
technology products and services in the United States, Canada and Latin America.
Prior to his position with IBM Americas, he was General Manager, Personal
Software Products, responsible for the development and marketing of O/S2, IBM's
Intel-based operating systems and other products. Mr. Thompson is a member of
the board of directors, Fortune Brands, Inc. and the Northern Indiana Public
Service Company (NIPSCO). He has served as chairman of the Florida A&M
University Industry Cluster and the Illinois Governor's Human Resource Advisory
Council. Mr. Thompson holds an undergraduate degree in business administration
from Florida A&M University and a master's degree in management science from
MIT's Sloan School of Management.
2
<PAGE> 8
Greg Myers has served as Vice President of Finance and Chief Financial
Officer for Symantec Corporation since January 1999. Mr. Myers is responsible
for worldwide finance, business development and investor relations. Prior to his
appointment as the Company's CFO in January 1999, Mr. Myers was Symantec's Vice
President of Finance, where he was responsible for world-wide accounting,
financial and strategic planning and business development. From 1997 through
mid-1998 Mr. Myers was Vice President of Financial Planning and Analysis for
Symantec. In this role, Mr. Myers managed the Company's strategic planning
process, the Company's budget and financial planning function and the worldwide
financial controller organization. From 1993 to 1996, Mr. Myers was the Director
of Financial Planning and Analysis Function, where he was responsible for the
budget, forecasting and financial analysis functions within Symantec. Before
joining Symantec in 1993, Mr. Myers was with Novell Corporation for five years
as their Director of Financial Planning and Analysis. Prior to Novell, Mr. Myers
has held various financial management positions for a number of companies within
Silicon Valley since 1975. Mr. Myers holds an undergraduate degree from
Cal-State University at Hayward and Masters in Business Administration from the
University of Santa Clara.
Christopher Calisi has served as Vice President, Remote Productivity
Solutions Business Unit of Symantec since September 1996. From July 1992 to
August 1996, Mr. Calisi held several positions within Symantec's Remote Access
Business Unit, including Development Manager, Director of Development, General
Manager and most recently, Vice President, Communication Products. 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
Corporation, 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. He is
also a Graduate of Harvard Business School's 1997 Executive Management
Program/TGM3. 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.
Dieter Giesbrecht has served as Vice President, EMEA (Europe, Middle East
and Africa) of Symantec since September 1996. From January 1996 until joining
Symantec, he was Vice President of Attachmate Europe based in Paris, France and
was responsible for the EMEA region. From 1991 to October 1995, he held several
executive functions within Lotus Development Europe including Managing Director
UK and Managing Director Central Europe. He has a degree in Electronics
Engineering from the Technical University of Furtwangen located in Germany. Mr.
Giesbrecht is a member of the Institute of Directors.
Keith Robinson has been Vice President for the Americas region since
September 1998. From November 1995 to August 1996, Mr. Robinson was Vice
President of Sales for the Americas region. Prior to this, Mr. Robinson served
as Vice President and General Manager of the Pacific Rim. Mr. Robinson was also
General Manager of Symantec Canada, an organization he helped establish. Prior
to joining Symantec he was employed by Ashton-Tate since 1982, where he held
various management positions in the United States and in other international
offices. Mr. Robinson holds a bachelors degree with honors from Sheffield
University in England and a masters degree from the University of California at
Los Angeles.
Enrique T. Salem is Vice President, Security and Assistance Business Unit
and Chief Technical Officer. Mr. Salem joined Symantec in April 1990 and has
held numerous positions including Director of Development and General Manager of
Advanced Utilities Group. Previous to joining Symantec, he was Vice President of
Security Pacific National Bank, Merchant Bank Division, where he was responsible
for the development and deployment of a global trading system. Mr. Salem holds a
Bachelor of Arts degree in Computer Science from Dartmouth College. He is a
member of the Board of Directors of the Software Council of Southern California
and a member of the IEEE. Mr. Salem became an executive officer of Symantec in
October 1996.
Dana E. Siebert is Executive Vice President for Worldwide Sales, Marketing
and Services. Previously, Mr. Siebert served as Vice President, Americas and
prior to that, Vice President, Worldwide Sales of Symantec and has also held the
position of Vice President, Worldwide Services of Symantec. Early at Symantec,
Mr. Siebert lead the team that built Symantec's international presence. Mr.
Siebert joined Symantec in September 1987. From 1985 to 1987, he was a Sales
Manager at THINK Technologies where he was responsible for U.S. corporate, OEM
and international sales. Previously, he held a number of sales management
positions in high technology companies including Wang Laboratories, Computerland
Corpora-
3
<PAGE> 9
tion and Burroughs Corporation. Mr. Siebert is a member of the Board of
Directors of TimeLine Solutions and Percon, Inc. Mr. Siebert holds a Bachelor of
Science degree in Business Administration from the University of New Hampshire
and is a member of the Software Publishers Association.
Derek Witte is Vice President Worldwide Operations. In this role, the
Global Information Systems, Facilities, Manufacturing, Purchasing and Legal
departments report to Mr. Witte. Previously, Mr. Witte served as Vice President,
General Counsel and Secretary of Symantec. 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 Computer, Inc. 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 and 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.
Carl D. Carman has been a director of Symantec since May 1984 and served as
Symantec's Chairman of the Board from January 1993 until April 1999. 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, from March 1988 until its dissolution in
December 1998. 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 degree in English from Harvard College. Mr. Bregman is also a director of
Quokka Sports Inc.
Robert S. Miller has been a director of Symantec since his appointment by
the Board in September 1994. Mr. Miller was Chairman and CEO of Waste
Management, Inc. from October 1997 until July 1998. He was Chairman of the Board
of Morrison-Knudsen Corporation from April 1995 until September 1996, and is now
Vice Chairman of the Board. 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 degree in Economics from
Stanford University, a law degree from Harvard Law School and a Masters of
Business Administration degree from Stanford University's Graduate School of
Business. Mr. Miller is also a director of Federal Mogul Corporation, Pope &
Talbot Inc. and Waste Management, Inc.
Charles M. Boesenberg has been a director of Symantec since June 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 Integrated Systems, Inc., a provider of embedded systems software.
Prior to joining Integrated Systems in October 1998, Mr. Boesenberg was
President and Chief Executive Officer of Magellan Corporation, which was the
surviving corporation of a merger with Ashtech, Inc., a position that he assumed
in January 1995 with Ashtech. 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 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,
4
<PAGE> 10
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 degree
in Mechanical Engineering from Rose Hulman Institute of Technology and a Master
of Science degree in Business Administration from Boston University.
Robert R.B. Dykes is President, Systems Group & Chief Financial Officer of
Flextronics, Inc. and has been a director of Symantec since March 1997. Mr.
Dykes was Symantec's Executive Vice President of Worldwide Operations and Chief
Financial Officer from October 1988 until February 1997. 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.
Tania Amochaev has been a director of Symantec since her appointment by the
Board of Directors in October 1997. Ms. Amochaev was Chief Executive Officer of
QRS Corporation, a provider of electronic commerce solutions to the retail
industry, from May 1993 until February 1997. She was President of QRS prior to
her promotion as that company's Chief Executive Officer and has also been
Chairman of the Executive Committee of the QRS Board of Directors since February
1997. From 1988 to 1992, Ms. Amochaev was Chief Executive Officer and Chairman
of Natural Language, Inc., and from 1984 until 1987, she was Chief Executive
Officer and Chairman of Comserv, Inc. Prior to Comserv, Ms. Amochaev worked in a
variety of management positions at Control Data Corporation during a fourteen
year period. Ms. Amochaev also serves on the boards of directors of QRS
Corporation, Government Technology Services, Inc. and Walker Interactive. She
has served on the Executive Board of the College of Letters and Sciences at the
University of California at Berkeley, and the Board of Trustees at the College
of St. Catherine. Ms. Amochaev received a Bachelor of Arts degree in Mathematics
from U.C. Berkeley, and a Masters of Science degree in Management from the
Stanford Graduate School of Business. She is also the recipient of an Honorary
Doctorate from the College of St. Catherine in Minnesota.
5
<PAGE> 11
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of July 20, 1999,
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 as calculated with respect to the fiscal
year ended April 2, 1999 and the CEO of Symantec, 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>
Mellon Bank Corp.(3)........................................ 3,488,947 6.2%
One Mellon Center
500 Grant Street
Pittsburgh, PA 15258
J. & W. Seligman(4)......................................... 3,126,000 5.6%
125 University Avenue
Palo Alto, CA 94307
Legg Mason(4)............................................... 3,035,000 5.4%
100 Light Street, 31st Floor
Baltimore, MD 21202
John W. Thompson(5)......................................... 3,000 *
Gordon E. Eubanks, Jr.(6)................................... 871,345 1.6%
Carl D. Carman(7)........................................... 171,250 *
Walter W. Bregman(8)........................................ 109,125 *
Robert R.B. Dykes(9)........................................ 87,826 *
Charles M. Boesenberg(10)................................... 66,998 *
Enrique Salem(11)........................................... 82,017 *
Keith Robinson(12).......................................... 31,617 *
Robert S. Miller(13)........................................ 52,000 *
Dana Siebert(14)............................................ 63,725 *
Christopher Calisi(15)...................................... 48,871 *
Tania Amochaev(16).......................................... 32,000 *
All current Symantec executive officers and directors as a
group (14 persons)(17).................................... 870,199 1.5%
</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 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 56,734,295 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 20, 1999.
(3) Based on information provided by Mellon Bank Corp. to Symantec in a
Schedule 13G/A dated February 24, 1999.
(4) Based on information provided by a third party investor relations firm
tracking Symantec's principal stockholders.
(5) Includes no shares subject to options exercisable within 60 days of July
20, 1999. Mr. Thompson became President, Chief Executive Officer and
Chairman of the Board in April 1999.
(6) Includes 741,873 shares subject to options exercisable within 60 days of
July 20, 1999. Mr. Eubanks resigned as President, Chief Executive Officer
and Chairman of the Board in April 1999.
(7) Includes 171,250 shares subject to options exercisable within 60 days of
July 20, 1999.
(8) Includes 97,750 shares subject to options exercisable within 60 days of
July 20, 1999.
(9) Includes 32,000 shares subject to options exercisable within 60 days of
July 20, 1999.
6
<PAGE> 12
(10) Includes 64,000 shares subject to options exercisable within 60 days of
July 20, 1999.
(11) Includes 74,026 shares subject to options exercisable within 60 days of
July 20, 1999.
(12) Includes 26,681 shares subject to options exercisable within 60 days of
July 20, 1999.
(13) Includes 50,000 shares subject to options exercisable within 60 days of
July 20, 1999.
(14) Includes 56,298 shares subject to options exercisable within 60 days of
July 20, 1999.
(15) Includes 48,871 shares subject to options exercisable within 60 days of
July 20, 1999.
(16) Includes 32,000 shares subject to options exercisable within 60 days of
July 20, 1999.
(17) Includes 763,596 shares subject to options exercisable within 60 days of
July 20, 1999, including the options described in notes (5)-(16).
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, 1997, 1998 and 1999 by
Symantec's Chief Executive Officer and Symantec's four most highly compensated
executive officers, other than the Chief Executive Officer, who were serving as
executive officers at the end of the fiscal year ended April 2, 1999. 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 except for those mentioned in the tables
below.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------------- AWARDS
OTHER -----------------------
ANNUAL STOCK ALL OTHER
SALARY BONUS COMPENSATION OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) (#) ($)
--------------------------- ---- ------- ------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Gordon E. Eubanks, Jr........ 1999 468,822(1) 157,219 5,780(12) 100,000 12,102(13)
President and 1998 412,500(2) 426,627 6,606(12) 150,000 12,314(13)
Chief Executive Officer 1997 362,500(3) 105,500 4,955(12) -- 16,338(13)
Keith Robinson............... 1999 207,190(4) 20,240 3,847(12) 51,000 86,654(14)
VP Americas 1998 175,000(5) -- 5,146(12) 15,425 135,750(14)
1997 172,479(6) -- 2,340(12) 5,000 115,807(14)
Christopher Calisi........... 1999 244,167 67,680 4,360(12) 18,000 4,647(15)
VP Remote Professional 1998 253,750(7) 90,200 8,719(12) 20,000 5,000(15)
Tools 1997 196,666(7) 105,634 6,354(12) 50,786 4,750(15)
Enrique T. Salem............. 1999 245,000(8) 70,515 11,222(12) 25,000 2,587(16)
VP Security and Assistance, 1998 240,000 190,200 11,222(12) 20,000 5,000(16)
Chief Technical Officer 1997 155,625(9) 30,000 6,457(12) 40,000 4,522(16)
Dana E. Siebert.............. 1999 280,000(10) 77,288 2,650(12) 25,000 25,695(17)
Executive VP Worldwide
Sales 1998 260,000(11) 204,945 2,138(12) 6,646 27,200(17)
Marketing Services 1997 260,000 65,000 2,299(12) 25,000 26,950(17)
</TABLE>
- ---------------
(1) Indicates payments at the annualized rate of $475,000 for the last quarter
of the 1999 fiscal year.
(2) Does not indicate an increase in Mr. Eubanks' annual salary effective
January 1, 1998 from $400,000 to $450,000, because payments to Mr. Eubanks
at the increased annualized rate were not made during the 1998 fiscal year.
(3) Includes payments at the annualized rate of $400,000 for the last quarter
of the 1997 fiscal year.
(4) Indicates payments at the annualized rate of $200,000 for the last two
quarters of the 1999 fiscal year.
(5) Includes a $7,536.62 retroactive payment during the 1998 fiscal year and
payments at the annualized rate of $187,920 for the last quarter of the
1998 fiscal year.
(6) Includes a $840.42 retroactive payment during the 1997 fiscal year and
payments at the annualized rate of $175,000 effective May 16, 1996.
7
<PAGE> 13
(7) Includes a $13,750 retroactive payment during the 1998 fiscal year and
payments at the annualized rate of $240,000 for the last quarter of the
1997 fiscal year.
(8) Indicates payments at the annualized rate of $260,000 for the last quarter
of the 1999 fiscal year.
(9) Includes payments at the annualized rate of $240,000 for the last quarter
of the 1997 fiscal year.
(10) Indicates payments at the annualized rate of $300,000 for the last quarter
of the 1999 fiscal year.
(11) Does not indicate an increase in Mr. Siebert's annual salary effective
January 1, 1998 from $260,000 to $270,000, because payments to Mr. Siebert
at the increased annualized rate were not made during the 1998 fiscal year.
(12) In each case, this represents the individual's automobile allowance.
(13) Includes approximately $4,750, $5,000 and $5,060, respectively, of matching
contributions to Symantec's 401(k) plan in 1997, 1998 and 1999; also
includes $11,588, $7,314 and $7,042 of interest forgiven in 1997, 1998 and
1999, respectively.
(14) Includes approximately $4,684, $5,089 and $5,427, respectively, of matching
contributions to Symantec's 401(k) plan in 1997, 1998 and 1999; also
includes $111,123, $130,661 and $81,227 of commission payments in 1997,
1998 and 1999, respectively.
(15) Includes approximately $4,750, $5,000 and $4,647 of matching contributions
to Symantec's 401(k) plan in 1997, 1998 and 1999, respectively.
(16) Includes approximately $4,522, $5,000 and $2,587 of matching contributions
to Symantec's 401(k) plan in 1997, 1998 and 1999, respectively.
(17) Includes approximately $4,750, $5,000 and $3,495 of matching contributions
to Symantec's 401(k) plan in 1997, 1998 and 1999, respectively and $22,200
of mortgage assistance in each of 1997, 1998 and 1999.
OPTION GRANTS IN FISCAL 1999
The following table sets forth further information regarding individual
grants of options to purchase Symantec Common Stock during the fiscal year ended
April 2, 1999 to each of the executive officers named in the Summary
Compensation Table above. All grants were made pursuant to the 96 Plan. In
accordance with the rules of the SEC, the table sets forth the hypothetical
gains or "option spreads" that would exist for the options at the end of their
respective ten-year terms based on assumed annualized rates of compound stock
price appreciation of 5% and 10% from the dates the options were granted to the
end of the respective option terms. Actual gains, if any, on option exercises
are dependent on the future performance of Symantec's Common Stock and overall
market conditions. There can be no assurances that the potential realizable
values shown in this table will be achieved.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------- POTENTIAL REALIZABLE VALUE
% OF TOTAL AT ASSUMED ANNUAL RATES OF
# OF SHARES OPTIONS STOCK PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM(3)
OPTIONS EMPLOYEES IN PRICE EXPIRATION -----------------------------
NAME GRANTED(1) FISCAL YEAR(2) ($/SHARE) DATE 5% 10%
---- ----------- -------------- --------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gordon E. Eubanks,
Jr. ................... 100,000 2.5% $21 1/07/09 $1,320,679 $3,346,859
Keith Robinson........... 6,000 0.2% $26.9375 4/03/08 $ 101,645 $ 257,589
30,000 0.8% $16.8125 11/16/08 $ 317,199 $ 803,844
15,000 0.4% $21 1/07/09 $ 198,102 $ 502,029
Christopher Calisi....... 18,000 0.5% $21 1/07/09 $ 237,722 $ 602,435
Enrique Salem............ 5,000 0.1% $14.125 9/15/08 $ 44,416 $ 112,558
20,000 0.5% $21 1/07/09 $ 264,136 $ 669,372
Dana Siebert............. 25,000 0.6% $21 1/07/09 $ 330,170 $ 836,715
</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 96 Plan and generally, no more than 25% of the original
grant becomes exercisable in any year. Options lapse after ten years or, if
earlier, 90 days after termination of employment.
8
<PAGE> 14
(2) Symantec granted options on a total of 3,331,142 shares to employees in
fiscal 1999. The Company did not reprice options in fiscal 1999 and does not
intend to reprice options during the next three fiscal years.
(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.
AGGREGATE OPTION EXERCISES IN FISCAL 1999 AND APRIL 2, 1999 OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
ACQUIRED ON VALUE OPTIONS AT APRIL 2, 1999 APRIL 2, 1999($) (1)(2)
NAME EXERCISE(#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ----------- ----------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Gordon E. Eubanks, Jr......... -- -- 561,666/258,334 $2,207,340/$117,689
Keith Robinson................ -- -- 21,617/ 57,393 $ 33,474/$ 8,295
Christopher Calisi............ -- -- 38,693/ 62,446 $ 127,931/$117,689
Enrique Salem................. -- -- 62,809/ 73,157 $ 232,244/$174,843
Dana Siebert.................. 15,963 $257,792 45,677/ 62,526 $ 216,633/$119,088
</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 April 2, 1999 ($16.125 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.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended April 2, 1999, Symantec's Compensation
Committee consisted of Carl Carman, Robert S. Miller and Tania Amochaev; Mr.
Carman and Mr. Miller served as members of the Committee during all of the
fiscal year ended April 2, 1999, while Ms. Amochaev became a member of the
Committee on March 16, 1999. None of the members of Symantec's Compensation
Committee has ever been an officer or employee of Symantec or any of its
subsidiaries, and none of the members of Symantec's Compensation Committee has
any relationship requiring disclosure under any paragraph of Item 404 of
Regulation S-K. In addition, Symantec has no disclosures to report under Item
402(j)(3) of Regulation S-K.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
This Report of the Compensation Committee shall not be deemed to be
incorporated by reference by any general statement incorporating by reference
this Proxy Statement into any filing under the Securities Act, or under the
Exchange Act, except to the extent that Symantec specifically incorporates this
information by reference, and shall not otherwise be deemed soliciting material
or filed under such acts.
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") as well as other executive officers. Effective January 1, 1999, the
Company adopted three new bonus compensation plans for individuals employed at
or above the level of Vice President: the Symantec Corporation CY1999 President
and CEO Variable Compensation Plan (the "CEO Compensation Plan"); the Symantec
Corporation CY1999 Executive Staff Variable Compensation Plan (the "Executive
Staff Compensation Plan"); and the Symantec Corporation CY1999 Vice President
Variable Compensation Plan (the three plans are sometimes collectively referred
to as the "Compensation Plans"). The Committee administers bonus compensation
awards to executive officers in accordance with the Compensation Plans. The
terms of the Compensation Plans provide that the Board retains the right to
alter or cancel one or more of the Compensation Plans for any reason at any
time, and any payments made under the Compensation Plans are made at the sole
discretion of the Board. The Committee administers stock option awards to
executive officers in accordance with the Company's stock option plan. During
Committee meetings, all discussions regarding
9
<PAGE> 15
compensation of the CEO are held without his attendance. Similarly, none of the
other 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 officer is contingent upon corporate
performance, and is adjusted, when appropriate, based on such executive
officer's performance against personal performance objectives. Each executive
officer's performance for the past fiscal year and the objectives for the
current year are reviewed together with the executive officer's responsibility
level and Symantec's fiscal performance versus objectives and potential
performance targets. Generally, when establishing salaries, bonus levels and
stock option awards for executive officers, the Committee considers: (i)
Symantec's financial performance during the past year and recent quarters; (ii)
the individual's performance during the past year and recent quarters; and (iii)
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 obtains executive compensation data from other high technology
companies, including high technology companies of a similar size. 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 "Comparison of Cumulative Total Return" below), but the sample was
not intended to correlate with this index. For fiscal 1999, Symantec set target
compensation levels for executive compensation based on this survey and
discretionary judgments made by the CEO or, in the case of the CEO's
compensation, discretionary judgments made by the Committee.
Compensation of Executive Officers During Fiscal 1999
During the fiscal year ended April 2, 1999, base salaries for executive
officers began at levels established in the prior year. The base salaries for
Messrs. Calisi, Eubanks, Giesbrecht, Salem, Siebert and Witte were increased
moderately (between 5% and 11%). The base salary of Mr. Robinson increased
significantly (17%) in recognition of his increased responsibilities in
connection with his promotion to the executive staff as Vice President,
Americas. The base salary of Mr. Myers was increased significantly (29%) in
recognition of his increased responsibilities in connection with his promotion
to the executive staff as Chief Financial Officer. The base salary for Mr. Bain
remained the same prior to his resignation from the Company.
During the fiscal year ended April 2, 1999, bonuses for the executive staff
and executive officers were paid on a quarterly basis. Except for Mr. Witte, all
of Symantec's executive officers were members of the executive staff during the
fiscal year ended April 2, 1999. Mr. Witte became a member of the executive
staff when he was promoted to the position of Vice President Worldwide
Operations. All of Symantec's executive officers are currently members of the
executive staff. The new Executive Staff Compensation Plan (like all the
Compensation Plans) is comprised of a quarterly and an annual bonus component.
The Compensation Plans retain a quarterly bonus component for the reasons noted
by the Committee in the past: (i) a quarterly bonus program is an important
benefit for retention purposes; (ii) it is consistent with bonus payments made
to similarly situated individuals in comparable companies; (iii) a quarterly
bonus payment more accurately and timely compensates the executive staff for
growth in the Company's quarterly revenue and earnings per share and achievement
of personal objectives; and (iv) quarterly bonuses allow fluctuations in
performance criteria from quarter to quarter to be appropriately recognized and
rapidly communicated. The Compensation Plans also include an independent annual
bonus component based on the achievement of calendar year planned financial
results and, in the case of executive staff members other than the CEO, the
accomplishment of key individual objectives.
Under the bonus program employed by the Committee prior to the adoption of
the new Compensation Plans, the executive staff received bonuses following the
end of each quarter based on recommendations made by the CEO. Under the prior
bonus plan, an executive staff member's bonus target with respect to the first
three quarters of the calendar year was 10% of his base salary. With respect to
the last quarter of the calendar
10
<PAGE> 16
year, each member of the executive staff was eligible to receive up to 50% of
his base salary, which included the 10% bonus target for the quarter, as well as
a 40% bonus target based on results for the entire year. With respect to Mr.
Witte, bonuses under the prior plan were paid on a quarterly basis considering
the same variables as those considered for the other executive officers;
however, for the first three calendar quarters, Mr. Witte's quarterly bonus
target was 6.25%. For the last calendar quarter, Mr. Witte was eligible to
receive up to 31.25% of his base salary, which included the 6.25% bonus target
for the fourth calendar quarter, as well as a 25% bonus target that was based on
results for the entire calendar year.
The following metrics were considered in calculating the amount of the
executive staff's and Mr. Witte's bonuses for a calendar quarter under the bonus
program employed by the Committee prior to the adoption of the new Compensation
Plans: (a) Symantec's quarterly earnings per share; (b) Symantec's quarterly
revenues; (c) achievement of certain Company-wide objectives; and (d)
achievement of an individual's objectives for the quarter. Typically, each
quarterly metric was given equal weight in determining an individual's quarterly
bonus. With respect to each quarterly metric, an individual must have achieved
at least an 80% performance rating to receive any bonus for such variable. The
bonus target payment for a particular metric was multiplied by the related
quarterly performance rating, and an individual could not have received a
quarterly performance rating greater than 100%.
The following metrics were considered in calculating the amount of the
executive staff's and Mr. Witte's bonuses at the end of the 1998 calendar year
under the bonus program employed by the Committee prior to the adoption of the
new Compensation Plans: (a) the Company's annual revenue growth; (b) the
Company's annual earnings per share; and (c) achievement of targeted objectives.
An individual was only eligible for the 40% annual bonus (25% in the case of Mr.
Witte) if Symantec achieved 100% or more of its revenue growth target or more
than 100% of its earnings per share target. If these targets were surpassed, an
executive staff member could have received a bonus of up to 40% (25% in the case
of Mr. Witte) of his annual salary, which amount was determined based on the
individual's performance on targeted objectives related to key Company-wide
initiatives.
Under the Executive Staff Compensation Plan currently in effect, the
executive staff receives bonuses following the end of each quarter based on
stated quarterly financial metrics and individual objectives. For each quarter,
an executive staff member's bonus target is 10% of his base salary (40% of base
salary for the full year). In addition, each member of the executive staff is
eligible to receive up to 40% of his base salary by meeting calendar year
planned financial results and by accomplishing key objectives. An executive
staff member can achieve an additional 50% of the annual 40% potential bonus by
exceeding the key objectives, making the maximum achievable bonus under the plan
equal to 100% of the executive staff member's annual base salary.
The following metrics and weightings will be considered in calculating the
amount of the executive staff's bonuses for a calendar quarter under the
Executive Staff Compensation Plan: (a) Symantec's quarterly earnings per share
(20% weighting); (b) Symantec's quarterly planned revenues (30% weighting); and
(c) achievement of certain objectives (both individual and Company-wide) for the
quarter (50% weighting). A performance threshold of 80% must be exceeded with
respect to each quarterly metric before the portion of the quarterly bonus
associated with that metric will be paid. The bonus target payment for a
particular metric will be multiplied by the related quarterly performance
rating. An individual cannot receive a quarterly performance rating greater than
100%.
The following metrics and weightings will be considered in calculating the
amount of the executive staff's bonuses at the end of the 1999 calendar year
under the Executive Staff Compensation Plan: (a) the Company's annual revenue
growth (30% weighting); (b) the Company's annual earnings per share (20%
weighting); and (c) achievement of certain targeted objectives (50% weighting).
An individual will only be eligible for an annual bonus if Symantec achieves
100% or more of its revenue growth target or 100% or more of its earnings per
share target. If these targets are met, an executive staff member can receive a
bonus of up to 60% of his annual salary, which amount will be determined based
on the individual's performance with respect to the targeted objectives.
Symantec establishes its financial objectives in connection with its normal
financial budgeting process. Each year, a budget is established for the
following four fiscal quarters. During each annual budget cycle,
11
<PAGE> 17
changes to the budgets are made to reflect changed conditions. In addition, the
budgets may be modified between normal budget cycles if significant events
occur. Symantec's performance with respect to revenues and earnings per share
are the primary financial objectives 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.
Stock Options Granted to Executive Officers in Fiscal 1999
The Committee 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 these 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.
Generally, when making stock option grants for executive officers, the Committee
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 April 2, 1999, the Committee made certain
stock option grants to executive officers (see "DIRECTORS AND
MANAGEMENT -- Compensation of Executive Officers -- Option Grants in Fiscal
1999"). 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 Committee during Symantec's 1999 fiscal year 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. Thompson. The number of stock
options awarded is based on a discretionary and subjective determination by the
Committee, in consultation with the CEO, of what they believe is appropriate for
each officer, with consideration given by the 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 Committee of what is
appropriate at the time. In fiscal 1999, the primary factor considered in
granting the options to executive officers was the number of unvested options
held by the executive officers. The Company did not reprice options in Fiscal
1999 and does not intend to reprice options during the next three fiscal years.
Fiscal 1999 CEO Compensation
Compensation for the CEO is determined through a process generally similar
to that discussed above for executive officers. The salary for the CEO during
the fiscal year ended April 2, 1999 was increased from $450,000 to $475,000
effective January 1, 1999. Mr. Eubanks was the CEO of the Company during the
entire fiscal year ended April 2, 1999; Mr. Thompson did not receive
compensation from Symantec during the fiscal year ended April 2, 1999.(1)
Mr. Eubanks' bonuses were determined on a similar basis as bonuses for the
rest of the executive staff; however, there are some significant differences.
For the first three calendar quarters, Mr. Eubanks' target bonus was 12.5% of
his base salary. His target bonus for the fourth calendar quarter was 62.5% of
his base salary, which consisted of a target bonus of 12.5% for the fourth
calendar quarter and an annual target bonus component of 50% of his base salary,
based on results for the entire calendar year. The Committee considered
- ---------------
1 For the fiscal year ending April 1, 2000, the salary for the CEO was
further increased from $475,000 to $600,000 effective upon the hiring of Mr.
Thompson (in recognition his value to the Company). In accordance with the
Employment Agreement dated April 11, 1999 between Mr. Thompson and Symantec (the
"Employment Agreement"), the Board has agreed that Mr. Thompson's base salary
will be reviewed on an annual basis by the Committee (and may be increased from
time to time in the discretion of the Board), but in no event shall be reduced
below $600,000 during Mr. Thompson's term of employment with the Company.
Compensation paid to Mr. Thompson during the fiscal year ending April 1, 2000
will be prorated for the portion of the year that he was employed by Symantec.
12
<PAGE> 18
the Company's earnings per share and revenue in determining Mr. Eubanks'
quarterly and annual bonuses, with each metric being given equal weight. Under
the bonus program employed by the Committee prior to the adoption of the new
Compensation Plans, if Symantec achieved at least 80% of its revenue target and
80% of its earnings per share target, Mr. Eubanks was to receive at least 80% of
the bonus allocated to the applicable metric. Furthermore, Mr. Eubanks could
have received an additional bonus of up to 50% of his base salary (for a maximum
bonus potential of 150% of his base salary over the course of the calendar year)
if the Company's annual earnings per share and annual revenue exceeded 100% of
the planned metrics. The amount of the additional 50% bonus paid to Mr. Eubanks
would have been dependent on the amount by which the Company's annual earnings
per share and annual revenue exceeded the targeted amounts (between 100% and
130% of targeted amounts), and would have been calculated on a linear basis. Mr.
Eubanks received an aggregate of 157,219 in Fiscal 1999.
Under the CEO Compensation Plan currently in effect, Mr. Thompson will
receive bonuses following the end of each quarter based on stated quarterly
financial metrics. For each quarter, Mr. Thompson's bonus target will be 12.5%
of his base salary (50% of base salary for the full year). In addition, Mr.
Thompson will be eligible to receive up to 50% of his base salary by meeting
certain calendar year planned financial results. Mr. Thompson can achieve an
additional 50% of his base salary by exceeding the calendar year planned
financial results, making the maximum achievable bonus under the plan equal to
150% of Mr. Thompson's annual base salary.(2)
The following metrics and weightings will be considered in calculating the
amount of Mr. Thompson's bonus for a calendar quarter under the CEO Compensation
Plan: (a) Symantec's quarterly earnings per share (50% weighting); and (b)
Symantec's quarterly planned total revenues (50% weighting). A minimum threshold
of 80% must be exceeded with respect to each quarterly metric before that
metric's portion of the quarterly bonus will be paid. The bonus target payment
for a particular metric will be calculated on a linear basis in relation to the
percent of the metric achieved up to 100% of the target amount. No additional
bonus will be paid for achieving more than 100% of a metric.
The following metrics and weightings will be considered in calculating the
amount of Mr. Thompson's bonus at the end of the 1999 calendar year under the
CEO Compensation Plan: (a) the Company's annual revenue growth (50% weighting);
and (b) the Company's annual earnings per share (50% weighting). Mr. Thompson
will only be eligible for an annual bonus if Symantec achieves 100% or more of
its annual revenue growth target or 100% or more of its annual earnings per
share target. If these targets are met, Mr. Thompson can receive a bonus of up
to 50% of his annual salary calculated on a linear basis in relation to the
percent of the metric achieved up to 100% of the target amount. Unlike the
quarterly bonus, Mr. Thompson can earn an additional bonus of up to 50% of his
annual salary calculated on a linear basis for achieving between 100-120% of
each annual bonus metric. No additional bonus will be paid for achieving more
than 120% of a metric.
The Committee believes that the CEO's performance bonuses should be paid
solely in relation to the success and strength of Symantec, and although
achieving personal objectives is important, the success and strength of Symantec
is the ultimate measure of the CEO's effectiveness.
Stock Options Granted to the CEO in Fiscal 1999
The Committee 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 Committee 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 April 2, 1999,
- ---------------
2 Under the Employment Agreement, Mr. Thompson is guaranteed a bonus of
$75,000 for the quarter ending June 30, 1999 whether or not the relevant
quarterly metrics are achieved. Similarly, Mr. Thompson is guaranteed an annual
bonus for calendar year 1999 at least equal to $75,000 plus one half of the
amount that would have been payable if Mr. Thompson had been employed by
Symantec for the full year based on the relevant annual metrics.
13
<PAGE> 19
Mr. Eubanks received stock options to acquire 100,000 shares of Symantec common
stock, which options vest over a four-year period and are exercisable at $21.00
per share.(3)
Changes to Tax Law -- Limits on Executive Compensation
The Omnibus Budget Reconciliation Act of 1993 added Section 162(m) to the
U.S. Internal Revenue 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. The
Company was in compliance with Section 162(m) during the 1999 fiscal year. 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. In this regard,
certain of the payments under the Company's Compensation Plans and a portion of
the stock awards to Mr. Thompson will not be deductible under Section 162(m).
By: The Compensation Committee of the
Board of Directors:
Date: April 2, 1999
Carl D. Carman
Robert S. Miller
Tania Amochaev
- ---------------
3 For the fiscal year ending April 1, 2000 (and in accordance with the
terms of the Employment Agreement), Mr. Thompson received stock options to
acquire 1,000,000 shares of Symantec common stock, which options vest over a
five-year period and are exercisable at $13 per share. The Employment Agreement
also provides that Mr. Thompson is to receive 100,000 shares of restricted
Symantec common stock on his first day of employment for a purchase price equal
to the par value of the common stock of $0.01 per share. These shares of
restricted stock are to vest over a two-year period, with 50,000 shares vesting
on April 14, 2000 and 50,000 shares vesting on April 14, 2001. These shares of
restricted stock are not transferable until they are vested, and unvested shares
are subject to repurchase by Symantec at $0.01 per share upon termination of Mr.
Thompson's employment with the Company. See "Employment Agreements and Change of
Control Agreements."
14
<PAGE> 20
The stock price performance graphs below shall not be deemed to be
incorporated by reference by any general statement incorporating by reference
this Proxy Statement into any filing under the Securities Act, or under the
Exchange Act, except to the extent that Symantec specifically incorporates this
information by reference, and shall not otherwise be deemed soliciting material
or filed under such acts.
COMPARISON OF CUMULATIVE TOTAL RETURN
MARCH 31, 1994 TO MARCH 31, 1999
The graph below compares the cumulative total stockholder return on
Symantec Common Stock from March 31, 1994 to March 31, 1999 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, 1994, and reinvestment of all
dividends). The past performance of Symantec's Common Stock is no indication of
future performance.
<TABLE>
<CAPTION>
SYMANTEC S&P 500 S&P HIGH TECH COMPOSITE
-------- ------- -----------------------
<S> <C> <C> <C>
'3/94' 100.00 100.00 100.00
'3/95' 147.00 116.00 127.00
'3/96' 182.00 153.00 171.00
'3/97' 91.00 183.00 231.00
'3/98' 173.00 271.00 349.00
'3/99' 108.00 321.00 560.00
</TABLE>
- ---------------
(1) The graph assumes that US$100 was invested in Symantec's Common Stock and in
each Index on March 31, 1994.
(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.
15
<PAGE> 21
COMPARISON OF CUMULATIVE TOTAL RETURN
JUNE 23, 1989 TO MARCH 31, 1999
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, 1999 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.
SYMANTEC CORPORATION
COMPARISON OF CUMULATIVE TOTAL RETURN
JUNE 23, 1989 TO MARCH 31, 1999
<TABLE>
<CAPTION>
SYMANTEC 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' 224 247 248
'3/97' 248 296 336
'3/98' 468 438 507
'3/99' 295 519 814
</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 US$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.
16
<PAGE> 22
EMPLOYMENT AGREEMENTS AND CHANGE OF CONTROL AGREEMENTS
In January 1999 Mr. Eubanks and the Company entered into an agreement (the
"Agreement") whereby Mr. Eubanks agreed to resign as President and Chief
Executive Officer upon the appointment of his successor. Mr. Eubanks and the
Company also agreed that Mr. Eubanks would assist the Company in the search for
such successor. The Agreement provides that for a period of two years after his
resignation, Mr. Eubanks would enter into a consulting relationship with the
Company during the term of which he would receive a consulting fee equal to his
base salary and a quarterly bonus of 6.25% and his options would continue to
vest as if he were still a Symantec employee and Symantec agreed to pay certain
health and other benefit premiums on Mr. Eubanks' behalf. In addition, Mr.
Eubanks would become Chairman of the Board of Directors upon his resignation
from the Company and he would receive stock option grants,.directors fees and
any other remuneration paid to directors who are not employees of the Company.
The Company also agreed to continue to provide indemnification to Mr. Eubanks
during the term of his consulting period. Mr. Eubanks resigned as President and
Chief Executive Officer in April 1999 upon Mr. Thompson's hiring and resigned as
Chairman of the Board two weeks later upon Mr. Thompson's appointment as
Chairman of the Board. In connection with the Agreement, Mr. Eubanks and the
Company entered into a mutual general release of claims. Upon Mr. Eubanks'
resignation from the Board, the Board voted to accelerate the vesting of the
stock options held by Mr. Eubanks that otherwise would have been subject to
vesting during the consulting period under the original Agreement. Additionally,
the Board agreed to release Mr. Eubanks from any further obligation to provide
consulting services under the original Agreement.
In accordance with the Employment Agreement dated April 11, 1999 between
Mr. Thompson and Symantec (the "Employment Agreement"), the Board decided to
grant Mr. Thompson a base salary of $600,000 and agreed that Mr. Thompson's base
salary will be reviewed on an annual basis by the Committee (and may be
increased from time to time in the discretion of the Board), but in no event
shall be reduced below $600,000 during Mr. Thompson's term of employment with
the Company. Compensation paid to Mr. Thompson during the fiscal year ending
April 1, 2000 will be prorated for the portion of the year that he was employed
by Symantec. Under the Employment Agreement, Mr. Thompson is guaranteed a bonus
of $75,000 for the quarter ending June 30, 1999 whether or not the relevant
quarterly metrics are achieved. Similarly, Mr. Thompson is guaranteed an annual
bonus for calendar year 1999 at least equal to $75,000 plus one half of the
amount that would have been payable if Mr. Thompson had been employed by
Symantec for the full year based on the relevant annual metrics. For the fiscal
year ending April 1, 2000, Mr. Thompson was granted stock options to acquire
1,000,000 shares of Symantec common stock, which options vest over a five-year
period and are exercisable at $13 per share. The Employment Agreement also
provides that Mr. Thompson is to receive 100,000 shares of restricted Symantec
common stock on his first day of employment for a purchase price equal to the
par value of the common stock of $0.01 per share. These shares of restricted
stock are subject to reverse vesting over a two-year period, with 50,000 shares
vesting on April 14, 2000 and 50,000 shares vesting on April 14, 2001. These
share of restricted stock are not transferable until they are vested, and
unvested shares are subject to repurchase by Symantec at $0.01 per share upon
termination of Mr. Thompson's employment with the Company.
CERTAIN TRANSACTIONS
In March 1989, Symantec sold 45,000 shares of Symantec Common Stock to
Gordon E. Eubanks, Jr., the Company's former President and Chief Executive
Officer 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 remained employed by Symantec, accrued interest on the note was forgiven
annually and Symantec paid Mr. Eubanks the amount of his tax liability on such
forgiveness. As of June 30, 1999, the outstanding principal balance on this note
was $120,000.
In May 1999, the Company issued a promissory note in the principal amount
of $1,400,000 to John W. Thompson, the Company's President and Chief Executive
Officer in connection with the acquisition of a residential property following
Mr. Thompson's relocation from New York to California. The note bears interest
at 4.9% per annum payable in May 2000. The principal under the note is due in
May 2000 and is secured by a deed of trust on the property. If Mr. Thompson's
employment with the Company ceases prior to
17
<PAGE> 23
maturity of the note other than for cause (as defined in the note), the
principal and any accrued interest will be due in May 2001. As of June 30, 1999,
the full principal amount on this note was outstanding.
In May 1999, the Company issued a promissory note in the principal amount
of $300,000 to Keith Robinson, the Company's Vice President, Americas in
connection with improvements to a property. The note bears interest at 4.9% per
annum payable in monthly installments of $1,225. The principal under the note is
due in June 2000 and is secured by a deed of trust on the property. As of June
30, 1999, the full principal amount on this note was outstanding.
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.
THE PROPOSALS
PROPOSAL NO. 1 -- ELECTION OF SYMANTEC DIRECTORS
At the Symantec Stockholders Meeting, the seven current members of the
Board will be nominated for re-election, all of whom have been nominated by the
Board's Nominating Committee. The nominees for re-election to the Board are
Tania Amochaev, Charles M. Boesenberg, Walter W. Bregman, Carl D. Carman, Robert
R.B. Dykes, Robert S. Miller and John W. Thompson. Each of these directors,
except Mr. Thompson, was elected at Symantec's annual meeting of stockholders on
September 17, 1998. Mr. Thompson was appointed to the Board in April 1999 to
fill the vacancy created by Mr. Eubanks' resignation.
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
seven members. Shares represented by the accompanying proxy will be voted for
the election of the seven 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 April 2, 1999, the Board of Symantec held a
total of ten meetings. No director attended fewer than 75% of the aggregate of
the total number of meetings of the Board (held during the period for which he
or she was a director) and the total number of meetings held by all committees
of the Board on which he or she served (during the period that he or she
served). The Board has an Audit Committee, a Compensation Committee and a
Nominating Committee.
18
<PAGE> 24
Messrs. Bregman and Miller are currently the members of Symantec's Audit
Committee, which met four times during the fiscal year ended April 2, 1999. The
Audit Committee meets with Symantec's outside auditors and reviews Symantec's
accounting policies and internal controls.
Messrs. Carman and Miller and Ms. Amochaev are currently the members of
Symantec's Compensation Committee, which met five times during the fiscal year
ended April 2, 1999. The Compensation Committee recommends cash-based and stock
compensation for executive officers of Symantec.
Messrs. Dykes, Carman and Boesenberg are currently the members of
Symantec's Nominating Committee, which met seven times during the fiscal year
ended April 2, 1999. Mr. Dykes is the chairman of the Nominating Committee. The
Nominating Committee recommends candidates for election to the company's Board
of Directors. The Nominating Committee does not accept suggestions for nominees
recommended by stockholders.
DIRECTORS' COMPENSATION
Messrs. Bregman, Boesenberg, Carman, Dykes and Miller and Ms. Amochaev are
each entitled to receive $1,500 per meeting of the Board or a committee of the
Board which they attend. During fiscal 1999, Mr. Boesenberg received $13,500 for
attending Board meetings and related expenses, Mr. Bregman received $20,800 for
attending Board meetings and related expenses, Mr. Carman received $19,500 for
attending Board meetings and related expenses, Mr. Miller received $22,755 for
attending Board meetings and related expenses, Mr. Dykes received $18,000 for
attending Board meetings and related expenses, and Ms. Amochaev received $10,040
for attending Board meetings and related expenses. All members of the Board are
reimbursed for invoiced out-of-pocket expenses that they incur in attending
Board meetings.
Mr. Bregman provides services to Symantec as a marketing consultant. 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 $16,000. During fiscal 1999, (i) Messrs. Bregman,
Boesenberg, Dykes, Miller and Ms. Amochaev each received a non-qualified stock
option to purchase 6,000 shares of Symantec's Common Stock at an exercise price
of $29.93 per share, which were granted in April 1998, and (iii) Mr. Carman
received a non-qualified stock option to purchase 20,000 shares of Symantec's
Common Stock at an exercise price of $29.93 per share, which was granted in
April 1998. Each of these options was granted automatically, pursuant to the
1993 Directors Plan. The 1993 Directors Plan expired in July 1998. Prior to
expiration, the 1993 Directors Plan provided 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 adopted a new formula for option grants
to non-employee directors under the 96 Plan on September 17, 1998. The award
formula for nonqualified stock option grants under the 96 Plan is as follows: An
initial grant of 20,000 shares will be made to a new director upon such director
first becoming a director. An award grant of 10,000 shares will be made to a
continuing director other than the Chairman of the Board, and an award grant of
20,000 shares will be made to the Chairman of the Board, at the first Board
meeting following the first day of each fiscal year of the Company; provided
that no such grant shall be made within six months of an initial grant. Options
granted will be 100% vested on the date of grant and shall remain exercisable
for a period of seven months following the non-employee director's termination
as a director or consultant of Symantec. All option grants to directors in the
next fiscal year will be made under the 1996 Plan.
THE BOARD RECOMMENDS A VOTE "FOR" ELECTION
OF EACH OF THE SEVEN 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"), a copy of which is
attached hereto as Annex A, to make available for issuance thereunder
19
<PAGE> 25
3,211,400 additional shares of Symantec Common Stock, which will raise the 96
Plan's limit on shares that may be issued pursuant to awards granted thereunder
from 9,001,802 to 12,213,202.
The Board believes that the amendment to increase the shares of Symantec
Common Stock available for issuance under the 96 Plan is in the best interests
of Symantec. The purpose of the 96 Plan is to provide employees of Symantec with
a convenient means to acquire an equity interest in Symantec, to provide to
employees incentives based on an increase in the value of Symantec's Common
Stock, and to provide an incentive for continued employment. The Board believes
that the additional reserve of shares with respect to which shares may be issued
is needed to ensure that Symantec can meet these goals. The shares awarded under
the 96 Plan come from authorized but unissued shares of Symantec Common Stock.
Without the 3,211,400 shares that are the subject of this proposal, there are a
total of 9,001,802 shares of Symantec's Common Stock authorized for issuance
upon the exercise of options granted under the 96 Plan. As of June 30, 1999, a
total of 682,938 shares had been purchased upon the exercise of options issued
under the 96 Plan, and a total of 7,944,625 shares of Symantec Common Stock were
subject to outstanding options that have been granted pursuant to the 96 Plan to
an aggregate of approximately 2,369 persons, leaving 374,239 shares reserved for
grant of options under the 96 Plan. The outstanding options are exercisable at
an average exercise price of $19.57 per share. During the 1999 fiscal year,
4,083,578 options were granted by Symantec, all of which were under the 96 Plan
in the case of employees and consultants or under the Directors Plan in the case
of directors, and 1,148,210 options were canceled.
Summary of 1996 Equity Incentive Plan
The following summary of the principal provisions of the 96 Plan as
proposed to be amended is qualified in its entirety by reference to the full
text of the 96 Plan, which is included as Annex A hereto.
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 and amended effective
September 18, 1997 and September 17, 1998. 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. Internal
Revenue Code of 1986, as amended (the "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 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.
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, 1999, approximately 2,492 people were eligible to
participate in the 96 Plan. Over the term of the 1996 Plan, the following named
executive officers have been granted options to purchase shares of Common Stock
under the 1996 Plan as follows: Gordon Eubanks, Jr. -- 250,000 options;
Christopher Calisi -- 88,786 options; Enrique Salem -- 85,000 options, Dana
Siebert -- 56,646 options and Keith Robinson -- 71,425 options. In addition,
John W. Thompson, the Company's current President and Chief Executive Officer
was granted 800,000 options under the 96 Plan upon joining the Company in April
1999. Over the term of the 1996 Plan, current executive officers as a group have
been granted options to purchase 1,404,250 shares, no current non-employee
directors have been granted options to purchase shares, and all employees as a
group, other than executive officers and directors, have been granted options to
purchase 9,081,091 shares (excluding 1,865,778 options which were subject to
cancellation). No
20
<PAGE> 26
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 reserved for issuance under the 96
Plan consists of shares of Symantec Common Stock authorized but unissued Common
Stock. The aggregate number of shares that may be issued under awards pursuant
to the 96 Plan as amended is 12,213,202. 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), and shares that
are subject to an award granted under the 96 Plan but are forfeited or
repurchased by Symantec at the original issue price, or that are subject to an
award that terminates without shares being issued, will again 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 incentive stock option
("ISO") or a non-qualified stock option ("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: Except with respect to options
granted to non-employee directors described below, 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 at the rate of 2.0833% per month
over the succeeding three years of employment. Options granted to
non-employee directors are immediately exercisable subject to repurchase to
the extent that such options have not vested (see "Formula for Non-Employee
Director Option Grants and Vesting" below).
(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. The exercise price for non-employee director formula option grants
may not be less than 100% of the fair market value of the shares of Common
Stock on the date of grant. On July 20, 1999, the fair market value of
Symantec Common Stock was $32.25.
(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
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<PAGE> 27
leave is guaranteed by law), the optionee typically has three months to
exercise any then-exercisable options except as may otherwise be provided.
(See "Formula for Non-Employee Director Option Grants and Vesting" below);
provided, however, that the exercise period may be extended by the
Committee for up to five years. A twelve-month exercise period applies in
cases of optionee's disability (as defined in the 96 Plan) or death.
(f) Recapitalization; Change of Control: 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 Code, all outstanding awards may be assumed, converted or
replaced by the successor corporation, or the successor corporation may
substitute equivalent awards or provide substantially similar consideration
to participants as was provided to stockholders; provided that formula
option grants to non-employee directors shall accelerate and be fully
vested upon such merger, consolidation or corporate transaction.
(g) 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.
(h) 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.
Formula for Non-Employee Director Option Grants and Vesting. Symantec will
automatically grant options, in accordance with a formula, to each director of
the Company who is not an employee of Symantec (or of any parent or subsidiary
of Symantec) ("non-employee director"). As of July 20, 1999, six directors were
in the class of persons eligible to receive options. The award formula for
nonqualified stock option grants is as follows: An initial grant of 20,000
shares will be made to a new director upon such director first becoming a
director. An award grant of 10,000 shares will be made to a continuing director
other than the Chairman of the Board, and an award grant of 20,000 shares will
be made to the Chairman of the Board, at the first Board meeting following the
first day of each fiscal year of the Company; provided that no such grant shall
be made within six months of an initial grant. Options granted will be 100%
vested on the date of grant and shall remain exercisable for a period of seven
months following the non-employee director's termination as a director or
consultant of Symantec.
Prior to July, 1998, non-employee directors were eligible to receive grants
pursuant to the 1993 Directors Stock Option Plan. The 1993 Directors Stock
Option Plan expired in July, 1998. All option grants to directors in the next
fiscal year will be made under the 1996 Plan.
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.
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.
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<PAGE> 28
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 capital gain, depending upon the amount of
time the ISO Shares were held by the optionee.
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). Upon resale of the shares by the optionee, any subsequent appreciation
or depreciation in the value of the shares will be treated as long-term or
short-term capital gain or loss.
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.
Maximum Tax Rates. The maximum rate applicable to ordinary income is 39.6%.
Long-term capital gain on stock held for more than twelve months will be taxed
at a maximum rate of 20%. Capital gains will
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<PAGE> 29
continue to be offset by capital losses and up to $3,000 of capital losses may
be offset annually against ordinary income.
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.
ERISA Information. The 96 Plan is not subject to any of the provisions of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA".)
Benefits to Certain Persons.
Because awards to employees 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 could be received by
various directors under the 96 Plan in the fiscal year ending April 1, 2000:
1996 PLAN
<TABLE>
<CAPTION>
NUMBER OF SHARES EXERCISE PRICE*
---------------- ---------------
<S> <C> <C>
Carl Carman........................................... 10,000
Charles Boesenberg.................................... 10,000
Tania Amochaev........................................ 10,000
Robert S. Miller...................................... 10,000
Robert R.B. Dykes..................................... 10,000
Walter Bregman........................................ 10,000
</TABLE>
- ---------------
* The exercise price of the options granted under the 1996 Plan will be the fair
market value of Symantec Common Stock on the date such options are granted.
THE BOARD RECOMMENDS A VOTE "FOR"
APPROVAL OF THE AMENDMENT TO THE 96 PLAN
PROPOSAL NO. 3 -- APPROVAL OF AMENDMENT TO SYMANTEC'S 1998 EMPLOYEE STOCK
PURCHASE PLAN.
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 1998 Employee Stock Purchase Plan (the "Stock Purchase Plan"),
a copy of which is attached hereto as Annex B, to make available for issuance
thereunder 760,000 additional shares of Symantec Common Stock, which will raise
the 96 Plan's limit on shares that may be issued pursuant to awards granted
thereunder from 500,000 to 1,260,000, and to provide for an automatic increase
in the shares under the Stock Purchase Plan on each January 1, and each
anniversary thereafter of 1% of the total number of outstanding shares of
Symantec Common Stock on the immediately preceding December 31, but not to
exceed 8,000,000 shares.
As of April 2, 1999, 2,473,929 shares of Common Stock had been sold
pursuant to the 1989 Stock Purchase Plan, the current Stock Purchase Plan's
predecessor, at a weighted average price of $11.04 per share, with no shares
available for future issuance under the 1989 Stock Purchase Plan. The 1989 Stock
Purchase Plan expires on October 24, 1999. After such date, the Company intends
to issue all future shares available for purchase under the Company's stock
purchase plans under the Stock Purchase Plan, and the proposed increase in
shares available under the Stock Purchase Plan is intended to compensate for
shares issued under the Stock Purchase Plan during the current fiscal year
except to the extent that employees remain eligible to participate in the 1989
Plan until its termination. As of June 30, 1998, approximately 2,492 employees
were currently eligible to participate in the Stock Purchase Plan over the term
of the Stock purchase Plan. The
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<PAGE> 30
terms of the Stock Purchase Plan are substantially similar to the terms of the
1989 Stock Purchase Plan, and are summarized below.
The Board of Directors believes that the proposed amendment to the Stock
Purchase Plan to provide for an increase in the number of shares by 760,000
shares reserved for issuance and the automatic increase in the authorized shares
by an additional 1% per year on the first day of each calendar year are in the
best interest of the Company. 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 approval of the amendment to the Stock Purchase Plan
at this time will ensure that Symantec will be able to continue providing the
benefits of an employee stock purchase plan to its employees who are
participating in the 1989 Stock Purchase Plan and in the Stock Purchase Plan.
The 1989 Stock Purchase Plan terminates on October 24, 1999.
Summary of Stock Purchase Plan
General. The Employee Stock Purchase Plan was approved by the stockholders
on September 17, 1998. The purpose of the Stock purchase 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
the purchase of shares of the Company's Common Stock.
The Stock Purchase Plan is intended to qualify as an "employee stock
purchase plan" under Section 423 of the Code. The shares to be awarded under the
Stock Purchase Plan come from authorized but unissued shares of Symantec Common
Stock. The following summary of the principal provisions of the proposed new
Stock Purchase Plan is qualified in its entirety by reference to the full text
of the Stock Purchase Plan, 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 under the Stock Purchase Plan. No shares were issued under the Stock
Purchase Plan in Fiscal 1999. The following table summarizes the maximum
benefits that were received by various persons under the 1989 Stock Purchase
Plan in the fiscal year ended April 2, 1999:
1989 EMPLOYEE STOCK PURCHASE PLAN
<TABLE>
<CAPTION>
NUMBER OF
DOLLAR VALUE* SHARES
------------- ---------
<S> <C> <C>
Gordon E. Eubanks, Jr....................................... 30,750 2,000
Howard Bain III............................................. 30,750 2,000
Christopher Calisi.......................................... 0 0
Enrique Salem............................................... 30,750 2,000
Dana E. Siebert............................................. 7,470 626
Keith Robinson.............................................. 20,881 1,628
Current Executive Group (eight persons)..................... 114,299 8,971
Non-executive director group (six persons).................. 0 0
Non-executive officer employee group........................ 4,413,407 442,131
</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.
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 administered by the Board of Directors.
References herein to the "Committee" mean either the committee appointed to
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<PAGE> 31
administer the Stock Purchase Plan or the Board of Directors if no committee
continues to have authority to do so.
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. Internal Revenue Code.
(e) employees who would, by virtue of their participation in such
Offering Period, be participating simultaneously in more than one Offering
Period under the Stock Purchase Plan; and
(f) Individuals who provide services to Symantec or any subsidiaries
as independent contractors who are reclassified as common law employees for
any reason except for Federal income and employment tax purposes.
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 or Purchase Periods (as
defined below) 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. 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. Internal Revenue 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. On July 20, 1999, the fair market value of Symantec Common Stock was
$32.25.
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 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
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<PAGE> 32
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.
Amendment or Termination of ESPP. The Stock Purchase Plan may be amended or
terminated by the Board at any time, except that any such termination or
amendment cannot adversely affect a previously granted right of a plan
participant; however, if the Board determines that a change in the accounting
rules or applicable laws renders the amendment or termination desirable, then
the Board may approve such an amendment or termination at any time.
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. Internal Revenue 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 SUCH TAX CONSEQUENCES OF
PARTICIPATION IN THE STOCK PURCHASE PLAN.
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<PAGE> 33
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 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
depending upon the amount of time the shares are held.
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
long-term or short-term 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.
Capital gains may be offset by capital losses and up to $3,000 of capital
losses may be offset annually again ordinary income.
Maximum Tax Rates. The maximum rate applicable to ordinary income is 39.6%.
Long-term capital gain on stock held for more than twelve months will be taxed
at a maximum rate of 20%. 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.
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). 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.
THE BOARD RECOMMENDS A VOTE "FOR" APPROVAL OF THE AMENDMENT
TO THE 1998 EMPLOYEE STOCK PURCHASE PLAN.
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
2000, 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, March 29, 1996, March 28, 1997, April 3, 1998 and April 2,
1999. Representatives of Ernst & Young LLP will be present at the Symantec
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<PAGE> 34
Stockholders Meeting and 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.
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
1999, except that due to administrative errors, that have since been thoroughly
evaluated and the related procedures revised, Mr. Carman's Form 4 for the month
of April 1998 was not filed in a timely manner. A Form 5 was filed by Mr. Carman
in April 1999.
STOCKHOLDER PROPOSALS
Requirements for Stockholder Proposals to be Brought Before an Annual
Meeting. For stockholder proposals to be considered properly brought before an
annual meeting by a stockholder, the stockholder must have given timely notice
thereof in writing to the Secretary of the Company. To be timely for the 2000
Annual Meeting, a stockholder's notice must be delivered to or mailed and
received by the Secretary of the Company at the principal executive offices of
the Company, between May 22, 2000 and June 21, 2000. A stockholder's notice to
the Secretary must set forth as to each matter the stockholder proposes to bring
before the annual meeting (i) a brief description of the business desired to be
brought before the annual meeting and the reasons for conducting such business
at the annual meeting, (ii) the name and record address of the stockholder
proposing such business, (iii) the class and number of shares of the Company
which are beneficially owned by the stockholder, and (iv) any material interest
of the stockholder in such business.
Requirements for Stockholder Proposals to be Considered for Inclusion in
the Company's Proxy Materials. Stockholder proposals submitted pursuant to Rule
14a-8 under the Exchange Act and intended to be presented at the Company's 2000
Annual Meeting of Stockholders must be received by the Company not later than
April 1, 2000 in order to be considered for inclusion in the Company's proxy
materials for that meeting.
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.
AVAILABLE INFORMATION
Symantec is subject to the informational requirements of the Exchange Act
and in accordance therewith files reports, proxy and information statements, and
other information with the Commission. Such reports, proxy and information
statements, and other information filed by Symantec can be inspected and copies
at the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington, D.C., as well as the regional offices of the
Commission located at Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois, and Seven World Trade Center, Suite 1300, New York, New York.
Copies of such materials can be obtained from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. Symantec's Common Stock is listed on the Nasdaq National Market. Reports
and other information concerning Symantec are available for inspection at the
National Association of
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Securities Dealers, Inc. at 9513 Key West Avenue, Rockville, Maryland 20850. The
Commission maintains a World Wide Web site that contains reports, proxy and
information statements, and other information filed through the Commission's
Electronic Data Gathering, Analysis and Retrieval System. This Web site can be
accessed at http://www.sec.gov.
By Order of the Board of Directors
signature
Derek P. Witte
Vice President, Worldwide Operations
and Secretary
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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 22.
2. Shares Subject to the Plan.
2.1 Number of Shares Available. Subject to Sections 2.2 and 17, the total
number of Shares reserved and available for grant and issuance pursuant to this
Plan will be 12,213,202 Shares. Subject to Sections 2.2 and 17, 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; and provided further, that unless otherwise
determined by the Board, non-employee directors shall receive options only
pursuant to the formula award provisions set forth in Section 6. 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,
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, except as provided
in Section 6, 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;
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(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 Section 162(m) 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.
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 7 of this Plan.
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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; provided however, that
options granted to non-employee directors pursuant to Section 6 shall
remain exercisable for a period of seven (7) months following the
non-employee director's termination as a director or consultant of the
Company or any Affiliate.
(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 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.
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6. Formula for Non-Employee Director Option Grants and Vesting.
6.1 Grant of Formula Option. Options shall be granted to non-employee
directors of the Company or any Affiliate ("non-employee directors") during the
term of this Plan as follows: (i) to the extent that a stock option has not
already been granted to a non-employee director during the fiscal year of the
Company in which such director becomes a director, a NQSO to purchase 20,000
shares will automatically be granted to such director upon such director's
joining the Board, (ii) a NQSO to purchase 10,000 shares will be granted to each
non-employee director, other than a non-employee director acting as the Chairman
of the Board at the first Board meeting following the first day of each fiscal
year of the Company, provided that no such grant shall be made to a director
within six months of the initial grant to such director, and (iii) a NQSO to
purchase 20,000 shares will be granted each year to the non-employee director
acting as the Chairman of the Board at the first Board meeting following the
first day of each fiscal year of the Company, provided, that no such grant shall
be made to a director within six months of the initial grant to such director.
Only non-employee directors who are neither an employee of the Company nor the
holder of more than one percent of the Shares or a representative of any such
stockholder shall be eligible for a formula option grant.
6.2 Exercise Period For Formula Options. Options shall be immediately
exercisable on the date of grant and shall expire, unless earlier terminated in
accordance with the provisions of this Plan, on the fifth anniversary of the
date of grant. The Company shall reserve to itself or its assignees(s) a right
to repurchase any or all unvested Shares held by a non-employee director upon
the non-employee director's termination as a director or consultant of the
Company or an Affiliate at the director's original Purchase Price.
6.3 Vesting of Formula Options. Options granted will be 100% vested on the
date of grant.
7. Payment for Share Purchases.
7.1 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;
(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
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(f) by any combination of the foregoing.
7.2 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.
8. Withholding Taxes.
8.1 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.
8.2 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.
9. Privileges of Stock Ownership.
9.1 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
11.
9.2 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.
10. 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.
11. 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 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.
12. 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.
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13. 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 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.
14. 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.
15. 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.
16. 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.
17. Corporate Transactions.
17.1 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
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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, or the successor 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); provided that all formula option grants,
pursuant to Section 6, shall accelerate and be fully vested upon such merger,
consolidation or corporate transaction. In the event such successor corporation
(if any) fails to assume or substitute Options pursuant to a transaction
described in this Subsection 17.1, all Options will expire on such transaction
at such time and on such conditions as the Board shall determine.
17.2 Other Treatment of Awards. Subject to any greater rights granted to
Participants under the foregoing provisions of this Section 17, in the event of
the occurrence of any transaction described in Section 17.1, 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."
17.3 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.
18. 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.
19. 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.
20. Amendment or Termination of Plan. The Board may at any time terminate
or amend this Plan in any respect, including without limitation amendment of
Section 6 of this Plan; provided, however, that the Board will not, without the
approval of the stockholders of the Company, amend this Plan to increase the
number of shares that may be issued under this Plan, or change the designation
of employees or class of employees eligible for participation in this Plan.
21. 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.
22. 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"
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(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.
"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
(d) if none of the foregoing is applicable, by the Committee in
good faith.
"Outside Director" shall mean a person who satisfies the requirements
of an "outside director" as set forth in regulations promulgated under
Section 162(m) of the Code.
"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.
"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 17, 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
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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'S PROPOSED
1998 EMPLOYEE STOCK PURCHASE PLAN
(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 1,260,000 shares of Common Stock are reserved for issuance
under the Plan. In addition, on each January 1, the aggregate number of shares
of the Company's Common Stock reserved for issuance under the Plan shall be
increased automatically by a number of shares equal to 1% of the total number of
outstanding shares of the Company's Common Stock on the immediately preceding
December 31; provided that the aggregate number of shares issued over the term
of this Plan shall not exceed 8,000,000 shares. 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.
(f) individuals who provide services to the Company or any of its
Subsidiaries as independent contractors who are reclassified as common law
employees for any reason except for federal income and employment tax
purposes.
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.
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 without stockholder
approval.
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 3rd business
day before such 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 3rd
business day 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 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.
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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 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;
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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 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.
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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 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
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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.
21. STOCKHOLDER APPROVAL
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.
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.
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(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
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.
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, 1999 (unless the Board makes the
Plan effective as of an earlier date) 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 of all of the shares of Common
Stock reserved for issuance under the Plan, or ten (10) years from the effective
date. 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;
provided that if the Board determines that a change in applicable accounting
rules or a change in applicable laws, renders an amendment or termination
desirable, then the Board may approve such an amendment or termination. The
Board may not amend the Plan 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;
or
(b) Change the designation of the employees (or class of employees)
eligible for participation in the Plan.
Notwithstanding the foregoing, the Board may make such amendments to the
Plan as the Board determines to be advisable, if the continuation of the Plan or
any Offering Period would result in financial accounting treatment for the Plan
that is different from the financial accounting treatment in effect on the date
this Plan is adopted by the Board.
B-7
<PAGE> 52
DETACH HERE
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PROXY
SYMANTEC CORPORATION
10201 TORRE AVENUE
CUPERTINO, CALIFORNIA 95014
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 15, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder(s) appoints Gregory Myers 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 Detrina Corporation, a wholly
owned subsidiary of Symantec, that are held of record by the undersigned as of
July 20, 1999 which the undersigned is entitled to vote at the Annual Meeting of
Stockholders of Symantec to be held on September 15, 1999, at Symantec
Corporation, City Center 1, 20300 Stevens Creek Boulevard, Suite 200, Cupertino,
California, at noon, (Pacific Time), and at any adjournments 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 PROPOSALS
1 THROUGH 4, 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.
SEE REVERSE SEE REVERSE
SIDE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
<PAGE> 53
DETACH HERE
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PLEASE MARK
[X] VOTES AS IN
THIS EXAMPLE
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR PROPOSALS
1, 2, 3 AND 4.
1. Proposal to elect the following directors:
Nominees: Walter W. Bregman, Charles M. Boesenberg,
Robert R. B. Dykes, Carl D. Carman, Robert S. Miller,
Tania Amochaev, John W. Thompson
[ ] FOR ALL NOMINEES [ ] WITHHELD FROM ALL NOMINEES
[ ] ______________________________________
For all nominees except as noted above
2. Proposal to amend Symantec's 1996 Equity Incentive Plan:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to amend Symantec's 1998 Employee Stock Purchase Plan:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. Proposal to ratify the selection of the independent auditors:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
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 include their capacities. If
the signer in a corporation, please print full corporate name and indicate
capacity of duly authorized officer executing on behalf of the
corporation. If the signed is a partnership, please print full
partnership name and indicate capacity of duly authorized person executing
on behalf of the partnership.
Signature: ______________ Date: _______ Signature: _______________ Date: _______
