Symantec 2013 Annual Report Download - page 38

PROPOSAL NO. 4
APPROVAL OF OUR 2013 EQUITY INCENTIVE PLAN
We are asking stockholders to approve our 2013 Equity Incentive Plan (the “2013 Plan”). On July 25, 2013,
the Board approved the 2013 Plan, subject to stockholder approval at the annual meeting. The 2013 Plan is the
successor to the 2004 Equity Incentive Plan (the “2004 Plan”).
If the 2013 Plan is approved by our stockholders, it will contain the following important features:
‰45,000,000 shares of our common stock will be reserved for issuance under the 2013 Plan, which repre-
sents approximately 6.4% of our outstanding shares as of August 1, 2013.
‰The 2013 Plan has a fixed number of shares available for issuance. It is not an “evergreen” plan.
‰Unlike the 2004 Plan, the 2013 Plan does not contain a “fungible share reserve.” Instead, each one share
granted as a restricted stock award, restricted stock unit (including PRUs and PCSUs (as defined in the
Compensation Discussion & Analysis section (beginning on page 47)), stock option or stock appreciation
right (“SAR”) under the 2013 Plan will count as the issuance of one share reserved for issuance under the
2013 Plan for the purpose of computing shares remaining available for issuance.)
‰Stock options and SARs must be granted with an exercise price that is not less than 100% of the fair
market value on the date of grant.
‰Repricing of stock options and SARs is prohibited unless stockholder approval is first obtained.
The 2013 Plan’s effectiveness is dependent on the approval of it by stockholders at the meeting. We are
asking stockholders to approve the 2013 Plan because the 2004 Plan is scheduled to expire on or before July 20,
2014.
We believe that the adoption of the 2013 Plan is in the best interests of our company because of the continu-
ing need to provide stock options, restricted stock units and other equity-based incentives to attract and retain the
most qualified personnel and to respond to relevant market changes in equity compensation practices. We cur-
rently estimate that our annual gross burn rate will be approximately 1.8%, or 13,000,000 shares annually. We
arrived at 13,000,000 shares by forecasting the number of shares likely needed for newly hired employees as well
as ongoing grants to our current employees, executives and members of our board of directors. Accordingly, we
expect that the number of shares available under the 2013 Plan will provide us with enough shares for equity
awards for the next three years and, therefore, help us achieve our objective of reducing the frequency with
which we seek stockholder approval for replenishment of our equity plan share reserve from every two years to
every three years. Our annual gross burn rate estimates takes into account the elimination of the fungible plan
reserve we had under the 2004 Plan, a change we implemented to address our evolution away from granting
options, which we believe is consistent with prevalent market practices.
The use of equity compensation has historically been a significant part of our overall compensation philoso-
phy at Symantec and is a practice that we plan to continue. The 2013 Plan will serve as an important part of this
practice and is a critical component of the overall compensation package that we offer to retain and motivate our
employees. In addition, awards under the 2013 Plan will provide our employees an opportunity to acquire or
increase their ownership stake in us, and we believe this aligns their interests with those of our stockholders,
creating strong incentives for our employees to work hard for our future growth and success. If Proposal No. 4 is
not approved by our stockholders, we believe our ability to attract and retain the talent we need to compete in our
industry would be seriously and negatively impacted, and this could affect our long-term success.
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