Symantec 2006 Annual Report Download - page 107

SYMANTEC CORPORATION
Notes to Consolidated Financial Statements Ì (Continued)
Officer in December 2005, 100,000 shares were forfeited and we reversed the related deferred stock-based
compensation.
We recorded amortization of deferred stock-based compensation related to restricted stock and restricted
stock units issued under the 2004 and 1996 Equity Incentive Plans of $2 million and $1 million during fiscal
2006 and 2005, respectively.
Assumed Veritas stock options
In connection with our acquisition of Veritas, we assumed each outstanding option to purchase Veritas
common stock with an exercise price equal to or less than $49.00 as well as each additional option required to
be assumed by applicable law. Each option assumed was converted into an option to purchase Symantec
common stock after applying the exchange ratio of 1.1242 shares of Symantec common stock for each share of
Veritas common stock. In total, we assumed and converted Veritas options into options to purchase 66 million
shares of Symantec common stock. In addition, we assumed and converted all outstanding Veritas RSUs into
approximately 425,000 Symantec RSUs, based on the exchange ratio.
The assumed options and RSUs retained all applicable terms and vesting periods. In general, the
assumed options vest over a four-year period from the original date of grant. Options granted prior to May
2004 generally have a maximum term of 10 years and options granted thereafter generally have a maximum
term of seven years. The assumed RSUs generally vest over a three or four year period from the original date
of grant.
Other stock option plans
Options remain outstanding under several other stock option plans, including the 2001 Non-Qualified
Equity Incentive Plan, the 1999 Acquisition Plan, the 1996 Equity Incentive Plan, the 1988 Employee Stock
Option Plan, and various plans assumed in connection with acquisitions. No further options may be granted
under any of these plans.
Acceleration of stock option vesting
On March 30, 2006, we accelerated the vesting of certain stock options with exercise prices equal to or
greater than $27.00 per share that were outstanding on that date. We did not accelerate the vesting of any
stock options held by our executive officers or directors. The vesting of options to purchase approximately
6.7 million shares of common stock, or approximately 14% of our outstanding unvested options, was
accelerated. The weighted average exercise price of the stock options for which vesting was accelerated was
$28.73. We accelerated the vesting of the options to reduce future stock-based compensation expense that we
would otherwise be required to recognize in our results of operations after adoption of SFAS No. 123R. We
adopted SFAS No. 123R on April 1, 2006, which is the beginning of our 2007 fiscal year. Because of system
constraints, it is not practicable for us to estimate the amount by which the acceleration of vesting will reduce
our future stock-based compensation expense. The acceleration of the vesting of these options did not result in
a charge to expense in fiscal 2006.
In January and March 2006, we accelerated the vesting of options held by three former officers of Veritas
upon their resignation from Symantec. We accelerated the vesting of options to purchase an aggregate of
728,106 shares and recorded a charge to Stock-based compensation expense of $441,000 in connection with
the modification of these stock options.
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