UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.  )

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Symantec Corporation

(Name of Registrant as Specified In Its Charter)

 

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20330 Stevens Creek Blvd.
Cupertino, California 95014

 

Dear Stockholder:

 

You are cordially invited to attend the 2008 Annual Meeting of Stockholders of Symantec Corporation to be held at Symantec’s World Headquarters, 20330 Stevens Creek Boulevard, Cupertino, California 95014, on Monday, September 22, 2008, at 9:00 a.m. (Pacific time). For your convenience, we are pleased to offer a live and re-playable webcast of the annual meeting on our website at www.symantec.com/invest. If you cannot attend the annual meeting, you may vote over the Internet or by telephone or, if you received a paper copy of the proxy materials, you can follow the instructions on the proxy card.

 

At this year’s annual meeting, the agenda includes the annual election of directors, amendment and restatement of our 2004 Equity Incentive Plan, adoption of our 2008 Employee Stock Purchase Plan, approval of the material terms of the amended and restated Senior Executive Incentive Plan and ratification of the selection of KPMG LLP as our independent registered public accounting firm for the current fiscal year. The Board of Directors recommends that you vote FOR the election of the director nominees, FOR the amendment and restatement of our 2004 Equity Incentive Plan, FOR the adoption of our 2008 Employee Stock Purchase Plan, FOR approval of the material terms of the amended and restated Symantec Senior Executive Incentive Plan and FOR the ratification of the selection of KPMG LLP as our independent registered public accounting firm for the current fiscal year. Please refer to the proxy statement for detailed information on each of the proposals and the annual meeting.

 

We are also pleased to take advantage of the new Securities and Exchange Commission rules allowing issuers to furnish proxy materials over the Internet. We believe the new rules will allow us to provide our stockholders with the information they need, while lowering the costs of the delivery of the materials and reducing the environmental impact of printing and mailing hard copies. Stockholders may help us to reduce costs further by opting to receive future proxy materials by e-mail.

 

Each share of stock that you own represents one vote, and your vote as a stockholder of Symantec is very important. For questions regarding your stock ownership, you may contact Investor Relations at (408) 517-8324 or, if you are a registered holder, our transfer agent, Computershare Investor Services, by email through their website at www.computershare.com/contactus or by phone at (877) 282-1168 (within the U.S. and Canada) or (781) 575-2879 (outside the U.S. and Canada).

 

Sincerely yours,

 

 

John W. Thompson

Chairman of the Board of Directors and

Chief Executive Officer

20330 Stevens Creek Blvd.
Cupertino, California 95014

 

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on:
September 22, 2008
9:00 a.m. Pacific Time

 

 

 

To Our Stockholders:

 

You are cordially invited to attend our 2008 Annual Meeting of Stockholders, which will be held at 9:00 a.m. (Pacific time) on Monday, September 22, 2008, at Symantec Corporation’s World Headquarters, 20330 Stevens Creek Boulevard, Cupertino, California 95014. For your convenience, we are pleased to offer a live and re-playable webcast of the annual meeting at www.symantec.com/invest.

 

We are holding the annual meeting for the following purposes, which are more fully described in the proxy statement:

 

1. To elect ten directors to Symantec’s Board of Directors, each to hold office until the next annual meeting of stockholders and until his or her successor is elected and qualified or until his or her earlier resignation or removal;

 

2. To approve the amendment and restatement of our 2004 Equity Incentive Plan, including the reservation of an additional 50,000,000 shares for issuance thereunder;

 

3. To approve the adoption of our 2008 Employee Stock Purchase Plan, including the reservation of 20,000,000 shares for issuance thereunder;

 

4. To approve the material terms of the amended and restated Symantec Senior Executive Incentive Plan to preserve the deductibility under federal tax rules of awards made under the plan;

 

5. To ratify the selection of KPMG LLP as Symantec’s independent registered public accounting firm for the 2009 fiscal year; and

 

6. To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.

 

Only stockholders of record as of the close of business on July 24, 2008 are entitled to notice of and will be entitled to vote at the annual meeting or any postponements or adjournment thereof. For 10 days prior to the annual meeting, a list of stockholders entitled to vote will be available for inspection at our World Headquarters. If you would like to view this stockholder list, please contact Investor Relations at (408) 517-8324.

 

BY ORDER OF THE BOARD OF DIRECTORS

 

 

Arthur F. Courville

Executive Vice President, General

Counsel and Secretary

 

Cupertino, California

July 28, 2008

 

 

 

 

 

INTERNET AVAILABILITY OF PROXY MATERIALS

 

Under rules recently adopted by the U.S. Securities and Exchange Commission (the “SEC”), we are furnishing proxy materials to our stockholders primarily via the Internet, instead of mailing printed copies of those materials to each stockholder. On or about August 11, 2008, we expect to send to our stockholders (other than those who previously requested electronic or paper delivery) a Notice of Internet Availability of Proxy Materials (“Notice of Internet Availability”) containing instructions on how to access our proxy materials, including our proxy statement and our annual report. The Notice of Internet Availability also instructs you on how to access your proxy card to vote through the Internet or by telephone.

 

This new process is designed to expedite stockholders’ receipt of proxy materials, lower the cost of the annual meeting, and help conserve natural resources. If you previously elected to receive our proxy materials electronically, you will continue to receive these materials via e-mail unless you elect otherwise. However, if you would prefer to receive printed proxy materials, please follow the instructions included in the Notice of Internet Availability.

 

TABLE OF CONTENTS

 

 

SYMANTEC CORPORATION

2008 ANNUAL MEETING OF STOCKHOLDERS

 

 

 

 

 

The accompanying proxy is solicited on behalf of Symantec Corporation’s Board of Directors (the “Board”) for use at Symantec’s 2008 Annual Meeting of Stockholders, to be held at Symantec’s World Headquarters, 20330 Stevens Creek Boulevard, Cupertino, California 95014 on Monday, September 22, 2008, at 9:00 a.m. (Pacific time), and any adjournment or postponement thereof. The company will provide a live and re-playable webcast of the 2008 annual meeting, which will be available on the events section of our investor relations website at www.symantec.com/invest.

 

On or about August 11, 2008, we expect to send most of our stockholders a Notice of Internet Availability containing instructions on how to access proxy materials, including this proxy statement and our annual report for our 2008 fiscal year. Stockholders who previously requested paper delivery will receive the proxy materials by mail, which we also expect to mail on or about August 11, 2008. The Notice of Internet Availability provides instructions on how to access the proxy card and vote over the Internet or by telephone. This proxy statement contains important information for you to consider when deciding how to vote on the matters brought before the annual meeting. Please read it carefully.

 

 

 

 

Symantec is strongly committed to good corporate governance practices. These practices provide an important framework within which our Board and management can pursue our strategic objectives and ensure our long-term vitality for the benefit of our stockholders.

 

Corporate governance standards generally specify the distribution of rights and responsibilities of the Board, management and stockholders, and spell out the rules and procedures for making decisions on corporate affairs. In general, the stockholders elect the Board and vote on certain extraordinary matters; the board is responsible for the general governance of the company, including selection of key management; and management is responsible for running the day-to-day operations of the company.

 

Our corporate governance standards are available on the Investor Relations section of our website, which is located at www.symantec.com/invest, by clicking on “Company Charters,” under “Corporate Governance.” These corporate governance standards are reviewed at least annually by our Nominating and Governance Committee, and changes are recommended to our Board for approval as appropriate. The fundamental premise of our Board-level corporate governance standards is the independent nature of our Board and its responsibility to our stockholders.

 

Through its continued listing requirements for companies with securities listed on the NASDAQ Global Select Market, the NASDAQ Stock Market (“NASDAQ”) requires that a majority of the members of our Board be independent, as defined under NASDAQ’s Marketplace Rules. Currently, each member of our Board, other than our Chief Executive Officer, John W. Thompson, is an independent director and all standing committees of the Board are composed entirely of independent directors, in each case under NASDAQ’s independence definition. The NASDAQ independence definition includes a series of objective tests, such as that the director is not an employee of the company and has not engaged in various types of business dealings with the company. In addition, as further required by NASDAQ rules, the Board has made a subjective determination as to each independent director that no relationship exists which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, the directors reviewed and discussed information provided by the directors and the company with regard to each director’s business and other activities as they may relate to Symantec and our management. Based on this review and consistent with our independence criteria, the Board has affirmatively determined that the following directors are independent: Michael A. Brown, William T. Coleman, Frank E. Dangeard, Geraldine B. Laybourne, David L. Mahoney, Robert S. Miller, George Reyes, Daniel H. Schulman, and V. Paul Unruh.

 

The Board and its committees meet throughout the year on a set schedule, and also hold special meetings and act by written consent from time to time. After each regularly scheduled Board meeting, the independent members of our Board hold a separate closed meeting, referred to as an “executive session,” which is generally led by the Lead Independent Director. These executive sessions are used to discuss such topics as the independent directors deem necessary or appropriate. At least annually, the independent directors will hold an executive session to evaluate the Chief Executive Officer’s performance and compensation.

 

The Board held a total of seven meetings during the fiscal year ended March 28, 2008. During this time, no directors attended fewer than 75% of the aggregate of the total number of meetings held by the Board and the total number of meetings held by all committees of the Board on which such director served (during the period which such director served).

 

Agendas and topics for Board and committee meetings are developed through discussions between management and members of the Board and its committees. Information and data that is important to the issues to be

considered are distributed in advance of each meeting. Board meetings and background materials focus on key strategic, operational, financial, governance and compliance matters applicable to us, including the following:

 

 

The Board and its committees are free to engage independent outside financial, legal and other advisors as they deem necessary to provide advice and counsel on various topics or issues, and are provided full access to our officers and employees.

 

The Lead Independent Director of the Board is chosen by the independent directors of the Board, and has the general responsibility to preside at all meetings of the Board when the Chairman is not present and executive sessions of the Board without management present. Mr. Miller has served as the Lead Independent Director since April 22, 2003.

 

An evaluation of Board operations and performance is conducted annually by the Nominating and Governance Committee to enhance Board effectiveness. Changes are recommended by the Nominating and Governance Committee for approval by the full Board as appropriate.

 

We have adopted a code of conduct that applies to all Symantec employees, officers and directors. We have also adopted a code of ethics for our Chief Executive Officer and senior financial officers, including our principal financial officer and principal accounting officer. Our Code of Conduct and Code of Ethics for Chief Executive Officer and Senior Financial Officers are posted on the Investor Relations section of our website, which is located at www.symantec.com/invest, by clicking on “Company Charters,” under “Corporate Governance.” We intend to post or disclose at that location any amendments to or waivers from any provision of our Code of Conduct and Code of Ethics for Chief Executive Officer and Senior Financial Officers that both applies to any of our executive officers or directors and relates to any element of the code of ethics, as defined under Item 406 of Regulation S-K.

 

There are three primary committees of the Board: the Audit Committee, Compensation Committee and Nominating and Governance Committee. The Board has delegated various responsibilities and authorities to these different committees, as described below and in the committee charters. The Board committees regularly report on their activities and actions to the full Board. Each member of the Audit Committee, Compensation Committee and Nominating and Governance Committee was appointed by the Board. Each of the Board committees has a written charter approved by the Board and available on our website at www.symantec.com/invest, by clicking on “Company Charters,” under “Corporate Governance.”

 

 

 

 

The Compensation Committee retains Mercer, an outside consulting firm, to provide advice and ongoing recommendations on executive compensation matters. The Compensation Committee consulted with Mercer on certain executive compensation matters during fiscal year 2008. As the Compensation Committee requested and to assist the Compensation Committee as it made decisions with respect to compensation matters, Mercer provided certain qualitative and quantitative information regarding compensatory practices in the market for executive talent, analyzed existing Symantec executive compensation arrangements, and was available to the Committee to provide technical and other information it requested in connection with performing its function throughout the fiscal year. Mercer’s role during fiscal year 2008 is further discussed in the Compensation Discussion & Analysis section (beginning on page 42).

 

 

The Nominating and Governance Committee will consider candidates submitted by Symantec stockholders, as well as candidates recommended by directors and management, for nomination to the Board. The goal of the Nominating and Governance Committee is to assemble a Board that offers a variety of perspectives, knowledge and skills derived from high-quality business and professional experience. The Nominating and Governance Committee annually reviews the appropriate skills and characteristics required of directors in the context of the current composition of the Board, our operating requirements and the long-term interests of our stockholders. The Nominating and Governance Committee has generally identified nominees based upon suggestions by outside directors, management and executive recruiting firms.

 

The Nominating and Governance Committee considers candidates by first evaluating the current members of the Board who intend to continue in service, balancing the value of continuity of service with that of obtaining new perspectives, skills and experience. If the Nominating and Governance Committee determines that an opening exists, the Committee identifies the desired skills and experience of a new nominee, including the need to satisfy rules of the SEC and NASDAQ.

 

The Nominating and Governance Committee generally will evaluate each candidate based on the extent to which the candidate contributes to the range of talent, skill and expertise appropriate for the Board generally, as well as the candidate’s integrity, business acumen, diversity, availability, independence of thought, and overall ability to represent the interests of Symantec’s stockholders. The Nominating and Governance Committee does not assign specific weights to particular criteria, and no particular criterion is necessarily applicable to all prospective nominees. Although the Nominating and Governance Committee uses these and other criteria as appropriate to evaluate potential nominees, the Committee has no stated minimum criteria for nominees. We have from time to time engaged, for a fee, a search firm to identify and assist the Nominating and Governance Committee with identifying, evaluating and screening Board candidates for Symantec and may do so in the future.

 

The Nominating and Governance Committee will consider potential nominees properly submitted by stockholders. Stockholders seeking to do so should provide the information set forth in our corporate Bylaws regarding director nominations. The Committee will apply the same criteria for candidates proposed by stockholders as it does for candidates proposed by management or other directors.

 

To be considered for nomination by the Nominating and Governance Committee at next year’s annual meeting of stockholders, submissions by security holders must be submitted by mail and must be received by the Corporate Secretary no later than April 13, 2009 to ensure adequate time for meaningful consideration by the Committee. Each submission must include the following information:

 

 

Information regarding requirements that must be followed by a stockholder who wishes to make a stockholder nomination for election to the Board for next year’s annual meeting is described in this proxy statement under “Additional Information — Stockholder Proposals for the 2009 Annual Meeting.”

 

Any stockholder who wishes to contact members of our Board may do so by mailing written communications to:

 

Symantec Corporation
20330 Stevens Creek Boulevard
Cupertino, California 95014
Attn: Corporate Secretary

 

The Corporate Secretary will review all such correspondence and provide regular summaries to the Board or to individual directors, as relevant, will retain copies of such correspondence for at least six months, and make copies of such correspondence available to the Board or individual directors upon request. Any correspondence relating to accounting, internal controls or auditing matters will be handled in accordance with Symantec’s policy regarding accounting complaints and concerns.

 

The Board does not have a formal policy with respect to Board member attendance at our annual meetings of stockholders, as historically very few stockholders have attended Symantec’s annual meeting of stockholders. Five directors attended Symantec’s 2007 Annual Meeting of Stockholders in person or by telephone.

 

Our Board consists of ten directors, each of whom is nominated for election at the 2008 annual meeting, including nine independent directors and one member of our senior management. Each director is elected to serve a one-year term, with all directors subject to annual election. At the recommendation of the Nominating and Governance Committee, the Board has nominated the following ten persons to serve as directors for the term beginning at the annual meeting on September 22, 2008: Michael A. Brown, William T. Coleman, Frank E. Dangeard, Geraldine B. Laybourne, David L. Mahoney, Robert S. Miller, George Reyes, Daniel H. Schulman, John W. Thompson and V. Paul Unruh. Ms. Laybourne was appointed to the Board in October 2007 with such appointment to take effect on January 1, 2008. Ms. Laybourne was recommended by the Nominating and Governance Committee after one of our non-management directors recommended her for its consideration.

 

Unless proxy cards are otherwise marked, the persons named as proxies will vote all proxies FOR the election of each nominee named in this section. Proxies submitted to Symantec cannot be voted at the 2008 annual meeting for nominees other than those nominees named in this proxy statement. However, if any director nominee is unable or unwilling to serve at the time of the annual meeting, the persons named as proxies may vote for a substitute nominee designated by the Board. Alternatively, the Board may reduce the size of the Board. Each nominee has consented to serve as a director if elected, and the Board does not believe that any nominee will be unwilling or unable to serve if elected as a director. Each director will hold office until the next annual meeting of stockholders and until his or her successor has been duly elected and qualified or until his or her earlier resignation or removal.

 

The names of each nominee for director, their ages as of July 4, 2008, and other information about each nominee is shown below.

 

 

Mr. Thompson has served as Chairman of the Board and Chief Executive Officer since April 1999, and as President from April 1999 to January 2002. Mr. Thompson joined Symantec after 28 years at International Business Machines Corporation, a global information technology company, where he held senior executive positions in sales, marketing and software development. In his last assignment, he was general manager of IBM Americas and a member of the company’s Worldwide Management Council. Mr. Thompson is a member of the board of directors of Seagate Technology, Inc. and United Parcel Service, Inc.

 

Mr. Brown was appointed to the Board in July 2005 following the acquisition of Veritas Software Corporation. Mr. Brown had served on the Veritas board of directors since 2003. Mr. Brown is currently the Chairman of Line 6, Inc., a

provider of musical instruments, amplifiers and audio gear that incorporate digital signal processing. From 1984 to 2002, Mr. Brown held various senior management positions at Quantum Corporation, a global storage company, most recently as Chief Executive Officer from 1995 to 2002 and Chairman of the Board from 1998 to 2003. Mr. Brown is a member of the board of directors of Quantum Corporation, Nektar Therapeutics and one private company.

 

Mr. Coleman was appointed to the Board in January 2003. Mr. Coleman is a Founder, Chairman of the Board and Chief Executive Officer of Cassatt Corporation, a provider of solutions to automate information technology operations. Previously Mr. Coleman was co-founder of BEA Systems, Inc., an enterprise application and service infrastructure software provider, where he served as Chairman of the Board from the company’s inception in 1995 until August 2002, Chief Strategy Officer from October 2001 to August 2002, and Chief Executive Officer from 1995 to October 2001. Mr. Coleman is a member of the board of directors of Palm, Inc.

 

Mr. Dangeard joined the Board in January 2007. Mr. Dangeard was the Chairman and Chief Executive Officer of Thomson S.A., a provider of digital video technologies, solutions and services, from September 2004 until March 2008. From 2002 to September 2004, Mr. Dangeard was Senior Executive Vice President of France Telecom, a global telecommunications operator and non-executive Chairman of Thomson. He joined Thomson in 1997 as Senior Executive Vice President and became a member of the Thomson board of directors in March 1999 and was appointed vice chairman in 2001. From 1989 to 1997, Mr. Dangeard was managing director of the investment banking firm, SG Warburg & Co. Ltd (later SBC Warburg) and from 1995, he was also chairman of SBC Warburg (France). Prior to that, he was a lawyer at Sullivan & Cromwell LLP in New York and London. Mr. Dangeard serves on the board of Electricite de France and Sonae SGPS, S.A. He graduated from the Ecole des Hautes Etudes Commerciales, from the Paris Institut d’Etudes Politiques and from Harvard Law School.

 

Ms. Laybourne joined the Board in January 2008. Ms, Laybourne founded Oxygen Media, a cable television network, in 1998 and served as its Chairman and Chief Executive Officer until November 2007 when the network was acquired by NBC Universal. Prior to founding Oxygen, Ms. Laybourne spent 16 years at Nickelodeon, a cable television network. From 1996 to 1998, Ms. Laybourne was President of Disney/ABC Cable Networks, a cable television network, where she was responsible for overseeing cable programming for the Walt Disney Company and ABC. Ms. Laybourne is a member of the board of directors of Insight Communications and Move.com and also serves on the board of trustees of Vassar College. Ms. Laybourne earned a Bachelor of Arts degree in art history from Vassar College and a Master of Science degree in elementary education from the University of Pennsylvania.

 

Mr. Mahoney was appointed to the Board in April 2003. Mr. Mahoney previously served as co-Chief Executive Officer of McKesson HBOC, Inc., a healthcare services company, and as Chief Executive Officer of iMcKesson LLC, also a healthcare services company, from 1999 to 2001. Mr. Mahoney is a member of the board of directors of Corcept Therapeutics Incorporated, Tercica Incorporated and several non-profit organizations.

 

Mr. Miller was appointed to the Board in September 1994. Since January 2007, Mr. Miller has served as Executive Chairman of Delphi Corporation, an auto parts supplier. From July 2005 until January 2007, Mr. Miller served as Chairman and Chief Executive Officer of Delphi Corporation. From January 2004 to June 2006, Mr. Miller was non-executive Chairman of Federal Mogul Corporation, an auto parts supplier. From 2001 to 2003, Mr. Miller was Chairman and Chief Executive Officer of Bethlehem Steel Corporation, a large steel producer. Prior to joining Bethlehem Steel, Mr. Miller served as Chairman and Chief Executive Officer on an interim basis upon the departure of Federal-Mogul’s top executive in 2000. Delphi Corporation and certain of its subsidiaries filed voluntary petitions for reorganization under the United States Bankruptcy Code in October 2005, and Federal Mogul Corporation and Bethlehem Steel Corporation and certain of their subsidiaries, filed voluntary petitions for reorganization under the United States Bankruptcy Code in October 2001. Mr. Miller is a member of the board of directors of UAL Corporation and two private companies.

 

Mr. Reyes has been a member of the Board since July 2000. Mr. Reyes became the Chief Financial Officer of Google Inc., an advertising and Internet search solutions provider, in July 2002. Prior to joining Google, he served as Interim Chief Financial Officer for ONI Systems Corporation, an optical networking company, from February to June 2002. Prior to ONI Systems, Mr. Reyes spent 13 years at Sun Microsystems, Inc., a provider of network computing products and services, where he served in a number of finance roles, with his last position as Vice President — Treasurer from 1999 to 2001.

Mr. Schulman has been a member of the Board since March 2000. Mr. Schulman has served as Chief Executive Officer of Virgin Mobile USA, a cellular phone service provider, since 2001, and also served as a member of the board of directors of Virgin Mobile USA since 2001. From 2000 to 2001, Mr. Schulman was President and Chief Executive Officer of priceline.com Incorporated, an online travel company, after serving as President and Chief Operating Officer since July 1999.

 

Mr. Unruh was appointed to the Board in July 2005 following the acquisition of Veritas. Mr. Unruh had served on Veritas’ board of directors since 2003. Mr. Unruh retired as Vice Chairman of the Bechtel Group, Inc., a global engineering and construction services company, in June 2003. During his 25-year tenure with Bechtel, Mr. Unruh held various positions in management including President of Bechtel Enterprises, Bechtel’s finance, development and ownership arm, from 1997 to 2001 and Chief Financial Officer from 1992 to 1996. Mr. Unruh is a member of the board of directors of Move, Inc., Heidrick & Struggles International, Inc. and three private companies. Mr. Unruh is a certified public accountant.

 

The following table provides information for fiscal year 2008 compensation for all non-employee directors of the company who served during the last fiscal year:

 

Fiscal Year 2008 Director Compensation

 

 

 

 

The policy of the Board is that compensation for independent directors should be a mix of cash and equity-based compensation. Symantec does not pay employee directors for Board service in addition to their regular employee compensation. Independent directors may not receive consulting, advisory or other compensatory fees from the company. The Compensation Committee, which consists solely of independent directors, has the primary responsibility to review and consider any revisions to directors’ compensation.

 

Director Stock Ownership Guidelines:  To better align our directors’ interests with those of our stockholders, the Compensation Committee instituted new stock ownership guidelines in May 2007. The Committee eliminated the previous 12 month minimum holding period for equity grants, making the new guidelines as follows:

 

 

Annual Fees:  In accordance with the recommendation of the Compensation Committee, the Board determined the non-employee directors’ compensation for fiscal year 2008 as follows:

 

 

The payment of the annual cash retainer is subject to the terms of the 2000 Director Equity Incentive Plan, as amended, which requires that at least 50% of the annual retainer fee be paid in the form of unrestricted, fully-vested shares of our common stock. We pay the annual retainer fee and any additional annual fees to each director at the beginning of the fiscal year. Directors who join the company after the beginning of the fiscal year receive a prorated cash payment in respect of their annual retainer fee and fees. These payments are considered earned when paid. Accordingly, we do not require them to be repaid in the event a director ceases serving in the capacity for which he or she was compensated.

 

Annual Equity Awards.  Each non-employee member of the Board receives an annual award of restricted stock units having a fair market value on the grant date equal to $180,000, with this value prorated for new non-employee directors from the date of such director’s appointment to our Board to the date of the first Board meeting in the following fiscal year. The restricted stock unit awards granted for fiscal year 2008 were granted on May 2, 2007 and vested in full on May 2, 2008. The restricted unit awards granted for fiscal year 2009 were granted on April 30, 2008 and will vest in full on April 30, 2009. Since the beginning of fiscal year 2007, we have not made option grants to our directors. Option grants made to our non-employee directors in fiscal 2006 and prior years were subject to a four-year vesting schedule. In the event of a merger or consolidation in which Symantec is not the surviving corporation or another similar change in control transaction involving Symantec, all unvested stock option and restricted stock unit awards made to non-employee directors under the programs described above will accelerate and vest in full.

 

Symantec stock ownership information for each of our directors is shown under the heading “Security Ownership of Certain Beneficial Owners and Management” in this proxy statement.

 

THE BOARD RECOMMENDS A VOTE “FOR” ELECTION OF
EACH OF THE TEN NOMINATED DIRECTORS.

 

The following table gives information about Symantec’s common stock that may be issued upon the exercise of options, warrants and rights under all of Symantec’s existing equity compensation plans as of March 28, 2008:

 

 

 

 

2001 Non-Qualified Equity Incentive Plan

 

The 2001 Non-Qualified Equity Incentive Plan was terminated in September 2004 in connection with the adoption of the Symantec 2004 Equity Incentive Plan. As of March 28, 2008, options to purchase 825,549 shares were outstanding under the 2001 Non-Qualified Equity Incentive Plan.

 

Terms of Options.  Symantec’s Compensation Committee determined many of the terms and conditions of each option granted under the plan, including the number of shares for which the option was 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 approved and is subject to the following conditions (as described in further detail in the plan):

 

 

 

Corporate Transactions.  In the event of a change of control of Symantec (as defined in the plan), the buyer may either assume the outstanding awards or substitute equivalent awards. In the event the buyer fails to assume or substitute awards issued under the plan, all awards will expire upon the closing of the transaction.

 

Term and Amendment of the Plan.  The plan was terminated in September 2004, except that outstanding options granted thereunder will remain in place for the term of such options.

 

1999 Acquisition Plan

 

The purpose of this plan was to issue stock options in connection with Symantec’s acquisition of URLabs in September 1999.

 

Eligibility for Participation.  Employees, officers, consultants, independent contractors and advisors to Symantec, or of any subsidiary or affiliate of Symantec, are eligible to receive stock options under this plan. Options awarded to officers may not exceed in the aggregate 30% of all shares available for grant under the plan.

 

Terms of Options.  Many of the terms of the options are determined by the Compensation Committee, and are generally the same in all material respects as the terms described above with respect to Symantec’s 2001 Non-Qualified Equity Incentive Plan, except that the 1999 Acquisition Plan does not contain a provision for the expiration of employees’ options upon a termination for cause.

 

Term and Amendment of the Plan.  The plan was terminated by the Board on October 18, 2005, except that outstanding options granted thereunder will remain in place for the term of such options.

 

You are being asked to approve the amendment and restatement of our 2004 Equity Incentive Plan (the “2004 Plan”), including the reservation of an additional 50,000,000 shares of our common stock for issuance thereunder (representing approximately 6.0% of our outstanding common stock as of July 4, 2008). The 2004 Plan was originally approved at Symantec’s 2004 Annual Meeting of Stockholders. The Board approved this amendment and restatement of the 2004 Plan on April 29, 2008, subject to stockholder approval at the annual meeting.

 

We seek to increase the number of shares reserved for issuance under the 2004 Plan by 50,000,000 shares. Our stockholders previously approved the reservation of an aggregate of 58,000,000 shares for issuance under the 2004 Plan, plus an additional number of shares that might transfer to the 2004 Plan upon cancellation of awards granted under our 1996 Equity Incentive Plan (the “Prior Plan”). We no longer grant awards under the Prior Plan. As of July 4, 2008, approximately 20,400,000 shares have already been transferred to the 2004 Plan upon cancellation or forfeiture of Prior Plan awards. While approximately 35,000,000 shares remain subject to options still outstanding under the Prior Plan, we estimate that less than half of these shares will ever become available for grant under the 2004 Plan because approximately 19,000,000 of these options were vested and “in the money” as of July 4, 2008. Our usage of shares under the 2004 Plan as of July 4, 2008 is as follows:

 

 

The use of equity compensation has historically been a significant part of our overall compensation philosophy at Symantec and is a practice that we plan to continue. The 2004 Plan serves as an important part of this practice and is a critical part of the compensation package that we offer our personnel. We believe that the use of stock options, restricted stock units and other equity-based incentives are critical for us to attract and retain the most qualified personnel and to respond to relevant market changes in equity compensation practices. In addition, awards under the 2004 Plan provide our employees an opportunity to acquire or increase their ownership stake in us, and we believe this alignment with our stockholders’ interests creates a strong incentive to work hard for our growth and success.

 

 

As of July 4, 2008, options to purchase a total of 89,393,731 shares of our common stock were outstanding under all of our equity compensation plans at a weighted average exercise price of $18.42 and with a weighted average remaining life of 4.5 years. There were also a total of 10,916,087 shares subject to issuance upon vesting and settlement of outstanding restricted stock unit awards issued under our equity compensation plans. In addition to the shares available for issuance under the 2004 Plan and the Prior Plan described above, as of July 4, 2008, 40,119 shares remain available for issuance under our 2000 Director Equity Incentive Plan and 209,599 shares remain available for issuance under our 2002 Executive Officer’s Stock Purchase Plan. The 2004 Plan is the only plan under which we currently have authority to grant options or stock awards.

 

One of the important factors that we consider in administering our equity compensation programs is our “burn rate,” meaning the number of shares that we utilize under the 2004 Plan each year. Our gross and net burn rates have been under 3% since fiscal 2005. For fiscal year 2008, our gross burn rate was 2.52%, our net burn rate was 1.93%, and our overhang was 16.3%. Please see “Executive Compensation and Related Information — Compensation Discussion & Analysis (CD&A)” beginning on page 42 for more discussion of our burn rates and overhang analysis.

 

The reservation of an additional 50,000,000 shares for issuance under the 2004 Plan is consistent with our anticipated burn rate over at least the next two years. The closing market price of our common stock on July 25, 2008 was $19.45 per share.

 

The material terms of the 2004 Plan include the following:

 

 

The following is a summary of the principal provisions of the 2004 Plan, as proposed for approval. This summary does not purport to be a complete description of all of the provisions of the 2004 Plan. It is qualified in its entirety by reference to the full text of the 2004 Plan. A copy of the 2004 Plan has been filed with the SEC with this

proxy statement, and any stockholder who wishes to obtain a copy of the 2004 Plan may do so by written request to the Corporate Secretary at Symantec’s headquarters in Cupertino, California.

 

Purpose of the 2004 Plan.  The primary purpose of the 2004 Plan is to provide incentives to attract, retain and motivate eligible persons whose contributions are important to the success of Symantec, our subsidiaries and affiliates, by offering them an opportunity to participate in our future performance through awards of options, stock appreciation rights, restricted stock units and restricted stock awards. To date, we have issued only options and restricted stock units under the 2004 Plan. In addition, the 2004 Plan is intended to align the interests of our employees with the interests of Symantec’s stockholders by providing participants with the opportunity to share in any appreciation in the value of our stock that their efforts help bring about. The 2004 Plan is an essential component of the total compensation package offered to employees, reflecting the importance that Symantec places on motivating and rewarding superior results with long-term, performance-based incentives.

 

Shares Reserved for Issuance.  The history and status of the number of shares reserved for issuance, made subject to awards and issued under the 2004 Plan are described above. Shares that 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), shares that are subject to an award that is granted but is subsequently forfeited or repurchased by Symantec at the original issue price and shares that are subject to an award that terminates without shares being issued will again be available for grant and issuance under the 2004 Plan. Shares that are withheld to pay the exercise or purchase price of an award or to satisfy any tax withholding obligations in connection with an award, shares that are not issued or delivered as a result of the net settlement of an outstanding option or stock appreciation right and shares that are repurchased on the open market with the proceeds of an option exercise price will not be available again for grant and issuance under the 2004 Plan.

 

Administration.  Symantec’s Compensation Committee administers the 2004 Plan except when our Board decides to directly administer the 2004 Plan (either being the “Committee”). The Committee determines the persons who are to receive awards, the number of shares subject to each award and the other terms and conditions of such awards. The Committee also has the authority to interpret the provisions of the 2004 Plan and any awards granted thereunder and to modify awards granted under the 2004 Plan. The Committee may not, however, reprice options or stock appreciation rights issued under the 2004 Plan without prior approval of Symantec’s stockholders (other than in connection with certain corporate transactions, including stock splits, stock dividends, mergers, spin-offs and certain similar transactions). To the extent permitted by applicable laws, the Committee may delegate to one or more officers of Symantec the authority to grant awards under the 2004 Plan to participants who are not officers, directors or other employees subject to Section 16 of the Exchange Act.

 

Eligibility.  The 2004 Plan provides that awards may be granted to employees, officers, directors (including non-employee directors), consultants, independent contractors and advisors of Symantec or any parent, subsidiary or affiliate of Symantec as the Committee may determine. However, incentive stock options (“ISOs”) may only be granted to employees of Symantec or any parent or subsidiary of Symantec. The actual number of individuals who will receive awards cannot be determined in advance because the Committee has discretion to select the participants and determine in each case the size of any award. As of July 4, 2008, there were approximately 17,800 employees and consultants, including nine executive officers, and nine non-employee directors eligible to receive discretionary and/or automatic awards under the 2004 Plan.

 

Section 162(m) Considerations.  Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”) generally disallows a tax deduction to public companies for compensation in excess of $1 million paid to the company’s Chief Executive Officer or any of the three other most highly compensated officers. Certain performance-based compensation is specifically exempt from this deduction limit if it otherwise meets the requirements of Section 162(m). Stock options and other equity awards pursuant to which the recipient’s compensation is based solely on the appreciation of the value of the underlying shares from the date of grant until the date of the income recognition event may qualify as performance-based compensation if the company satisfies certain requirements in connection with the plan under which the awards are granted. Specifically, the plan must be stockholder-approved and must contain a limit on the number of shares that may be granted to any one individual under the plan during a specified period. Accordingly, the 2004 Plan provides that no person will be eligible to receive more than 2,000,000 shares in any calendar year pursuant to the grant of awards under the 2004

Plan (no more than 400,000 of which can be as awards of restricted stock or restricted stock units) except that new employees of Symantec, or any parent, subsidiary or affiliate of Symantec, are eligible to receive up to a maximum of 3,000,000 shares in the calendar year in which they commence employment (no more than 600,000 of which can be as awards of restricted stock or restricted stock units).

 

Additional requirements apply to certain forms of compensation, such as restricted stock units and restricted stock awards, in order for them to qualify as performance-based compensation, including a requirement that payment of the value of such awards be contingent upon achievement of performance goals that are established in a manner specified under Section 162(m) of the Code. The 2004 Plan permits Symantec to issue awards incorporating such performance objectives and provides that these performance objectives may be based upon: (a) net revenue and/or net revenue growth; (b) earnings before income taxes and amortization and/or earnings before income taxes and amortization growth; (c) operating income and/or operating income growth; (d) net income and/or net income growth; (e) earnings per share (“EPS”) and/or earnings per share growth; (f) total stockholder return and/or total stockholder return growth; (g) return on equity; (h) operating cash flow return on income; (i) adjusted operating cash flow return on income; (j) economic value added; and (k) individual business objectives (collectively, the “Performance Factors”). To the extent that the Committee determines that an award will be granted subject to Performance Factors, such factors will be specified with respect to a particular award by the Committee in a manner designed to comply with Section 162(m).

 

Stock Options.  As discussed above, the Committee determines the terms and conditions of awards granted under the 2004 Plan, including whether an option will be an ISO or a non-qualified stock option (“NQSO”). As a matter of practice, all options currently being granted are NQSOs. Each option is evidenced by an agreement in such form as the Committee approves and is subject to the following conditions (as described in further detail in the 2004 Plan):

 

 

Non-Employee Director Equity Awards.  The 2004 Plan provides for an annual non-discretionary award of restricted stock units with a value of $180,000 on the date of grant to each non-employee director on the first

business day following the first regular Board meeting of each fiscal year. The 2004 Plan also provides for the automatic grant of restricted stock units with a value of $180,000, pro-rated based on the number of days from the director’s election date through the date of the first regular Board meeting of the following fiscal year, on the date of grant to each new non-employee director on the first business day following the director’s election to the Board. The restricted stock units granted under this program vest one year from the date of grant as long as the non-employee director serves on the Board on such vesting date.

 

Restricted Stock Units.  Restricted stock units represent the right to receive shares at a specified date in the future, subject to forfeiture of such right due to termination of services or failure to achieve specified performance conditions (including Performance Factors) applicable to such units. Restricted stock units will be evidenced by a written agreement between us and the recipient, and the terms and conditions applicable to restricted stock units may vary from recipient to recipient. The Committee determines all terms of restricted stock units (except with respect to the automatic grant of restricted stock units to our non-employee directors) including, without limitation, the number of shares subject to the grant, the time or times during which the restricted stock units may be settled, the consideration (cash or shares) to be distributed upon settlement of the restricted stock units and the effect a termination of recipient’s services will have on the restricted stock units. Restricted stock units may vest upon the passage of time in connection with services performed for us, upon achievement of performance criteria or upon other criteria as determined by the Committee. Payment upon settlement of a restricted stock unit may be made in the form of cash, shares or a combination thereof, either in a lump sum payment or in installments, as the Committee shall determine.

 

Restricted Stock Awards.  Each restricted stock award is evidenced by a restricted stock agreement in such form as the Committee approves which will contain provisions regarding the number of shares the participant may be issued, the purchase price, if any, and the restrictions to which the shares will be subject. Shares subject to a restricted stock award may become vested over time or upon completion of performance goals (including Performance Factors) set out in advance. Restricted stock awards shall immediately cease to vest if a participant is terminated for any reason, unless provided otherwise in the applicable restricted stock agreement or unless otherwise determined by the Committee, and Symantec will generally have the right to repurchase any such unvested shares.

 

Stock Appreciation Rights.  Stock appreciation rights (“SARs”) are awards in which the participant is deemed granted a number of shares, subject to vesting, at an exercise price of not less than 100% of the fair market value of Symantec common stock on the date of grant. When the SARs vest, then the participant can exercise the SARs. Exercise, however, does not mean the number of shares deemed granted are issued. Rather, the participant will receive cash or shares, as determined by the Committee, having a value at the time of exercise equal to (1) the number of shares deemed exercised, times (2) the amount by which Symantec’s stock price on the date of exercise exceeds the exercise price of SARs. Vesting may be based on the passage of time in connection with services performed for us or upon achievement of performance goals (including Performance Factors) as determined by the Committee. Under the 2004 Plan, the maximum term of each SAR is ten years from the date of grant.

 

Adjustment of Shares.  In the event of a stock dividend, recapitalization, stock split, reverse stock split, subdivision, combination, reclassification or similar change in the capital structure of the Company without consideration or if there is a change in the corporate structure, then (a) the number of shares reserved for issuance under the 2004 Plan, (b) the limits on the number of shares that may be issued to participants in a calendar year, (c) the exercise price and number of shares subject to outstanding options and (d) the purchase price and number of shares subject to other outstanding awards, including restricted stock awards, will be proportionately adjusted, subject to any required action by our Board or our stockholders and subject to compliance with applicable securities laws. Fractions of a share will not be issued but will be rounded down to the nearest whole share, and may be replaced by a cash payment equal to the fair market value of such fraction of a share, as determined by the Committee.

 

Nontransferability of Awards.  Awards granted under the 2004 Plan will not be transferable by the participant, other than by will or by the laws of descent and distribution or as consistent with the award agreement for the award. All awards will be exercisable during the participant’s lifetime only by the participant or the participant’s guardian or legal representative and after the participant’s death by the legal representative of the participant’s heirs.

Amendment and Termination of the 2004 Plan.  Our Board may at any time terminate or amend the 2004 Plan in any respect, including without limitation our Board may amend the non-employee director formula restricted stock unit grants; provided, that our Board may not, without the approval of the stockholders of Symantec, amend the 2004 Plan to increase the number of shares that may be issued under the 2004 Plan, change the designation of employees or class of employees eligible for participation in the 2004 Plan or materially modify a provision of the 2004 Plan if the modification requires stockholder approval under rules of the NASDAQ Stock Market. In addition, except in connection with certain corporate transactions involving the Company, including stock splits, stock dividends, mergers, spin-offs and certain other similar transactions, the Committee may not reduce the exercise price of (reprice) options or stock appreciation rights issued under the 2004 Plan without prior approval of Symantec’s stockholders. Unless earlier terminated, the 2004 Plan will terminate on July 20, 2014.

 

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 participants in the 2004 Plan with respect to awards granted under the 2004 Plan. U.S. federal tax laws may change and U.S. federal, state and local tax consequences for any participant will depend upon his or her individual circumstances.

 

Tax Treatment of the Participant

 

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 for the year of exercise the optionee is subject to the alternative minimum tax (“AMT”). If the optionee holds the shares purchased upon exercise of the ISO (the “ISO Shares”) for more than one year after the date the ISO was exercised and for more than two years after the ISO’s grant date (the “required holding period”), then 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 equal the difference between the amount realized upon such disposition and the amount paid for the ISO Shares upon the exercise of the ISO.

 

If the optionee disposes of ISO Shares prior to the expiration of the 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, and treated as long-term capital gain or short-term 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 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% 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. 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.

 

Non-Qualified 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 exercise price. The included amount must be treated as ordinary income by the optionee and will be subject to income tax withholding by Symantec if the optionee is an employee. 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 depending upon the amount of time the NQSO shares were held by the optionee.

 

Restricted Stock Units.  In general, no taxable income is realized upon the grant of a restricted stock unit award. The participant will generally include in ordinary income, which will be subject to income tax withholding by Symantec if the participant is an employee, the fair market value of the shares of stock that are delivered to the

participant upon settlement, which generally occurs at the time the restricted stock units vest. The 2004 Plan allows the Company to withhold shares from the restricted stock unit award to satisfy the Participant’s withholding tax obligation, with Symantec retiring those shares and being required to tender cash from its general funds to the applicable tax authorities in an amount equal to the value of the shares withheld.

 

Restricted Stock.  A participant receiving restricted shares for services recognizes taxable income when the shares become vested. Upon vesting, the participant will include in ordinary income an amount, which will be subject to income tax withholding by Symantec if the participant is an employee, equal to the difference between the fair market value of the shares at the time they become substantially vested and any amount paid for the shares. Upon resale of the shares by the participant, subsequent appreciation or depreciation in the value of the shares is treated as long-term or short-term capital gain or loss depending on the amount of time the shares were held by the participant.

 

Stock Appreciation Rights.  A grant of a stock appreciation right has no federal income tax consequences at the time of grant. Upon the exercise of stock appreciation rights, the value of the shares or other consideration received is generally taxable to the recipient as ordinary income, which will be subject to income tax withholding by Symantec if the recipient is an employee.

 

Section 409A.  The American Jobs Creation Act of 2004 added Section 409A to the tax code, generally effective January 1, 2005. The IRS has issued proposed and final regulations that, in part, give employers until the end of 2008 to effect written Section 409A implementation in almost all circumstances. Section 409A covers most programs that defer the receipt of compensation to a succeeding year. It provides rules for elections to defer (if any) and for timing of payouts. There are significant penalties placed on the individual employee if compensation does not conform to the strict requirements of Section 409A. While Section 409A may affect the timing of our withholding obligations, it does not affect our ability to deduct deferred compensation. Section 409A generally would not apply to stock options granted under the 2004 Plan. It may apply to restricted stock units granted under the 2004 Plan. The 2004 Plan allows for us to defer the issuance of shares with respect to 2004 Plan awards.

 

Tax Treatment of Symantec

 

Subject to any withholding requirement, the standard of reasonableness, and (if applicable) Section 162(m) of the Code, Symantec generally will be entitled to a deduction to the extent any participant recognizes ordinary income from an award granted under the 2004 Plan.

 

ERISA Information

 

The 2004 Plan is not subject to any of the provisions of the Employee Retirement Income Security Act of 1974, as amended.

 

Symantec will recognize compensation expense in connection with awards granted under the 2004 Plan as required under applicable accounting standards, including under Statement of Financial Accounting Standards No. 123(R). Symantec currently recognizes compensation expense associated with equity awards over an award’s requisite service period and establishes fair value of equity awards in accordance with applicable accounting standards.

 

Except as described in “Summary Description of 2004 Equity Incentive Plan (as amended and restated) — Non-Employee Director Equity Awards” above, future awards to directors, executive officers, employees and other eligible participants under the 2004 Plan are discretionary and cannot be determined at this time. Further, since the number of shares subject to the restricted stock units to be automatically granted to non-employee directors under the 2004 Plan depends on the fair market value of our common stock at future dates, it is not possible to determine the exact number of shares that will be subject to such future restricted stock unit awards.

As of July 4, 2008, the following named executive officers had received grants of options and restricted stock units relating to the number of the shares listed after his or her name during the fiscal year ending April 3, 2009: John W. Thompson — 115,000 RSUs and 380,000 options; Enrique T. Salem — 50,000 RSUs and 240,000 options; James A. Beer — 30,000 RSUs and 100,000 options; Gregory W. Hughes — 30,000 RSUs and 100,000 options; and Janice Chaffin — 30,000 RSUs and 90,000 options. Former employees, Gregory S. Butterfield and Thomas W. Kendra, did not receive grants of options or restricted stock units during the 2009 fiscal year. During that same period, all executive officers as a group were granted an aggregate of 347,333 RSUs and 1,187,000 options and all directors who are not executive officers, as a group, were granted 94,068 RSUs and no options. Additional information about equity awards made to our named executive officers and directors during fiscal year 2008 and equity awards held by our named executive officers as of the end of fiscal year 2008 are contained in the following tables and their related footnotes contained elsewhere in this proxy statement: Fiscal Year 2008 Director Compensation (beginning on page 13), Grants of Plan-Based Awards in Fiscal 2008 (beginning on page 56) and Outstanding Equity Awards At 2008 Fiscal Year-End (beginning on page 58). Each executive officer and each person who previously served as an executive officer during fiscal year 2008 and remains employed by Symantec has an interest in Proposal No. 2.

 

THE BOARD RECOMMENDS A VOTE “FOR” APPROVAL OF PROPOSAL NO. 2

 

At the annual meeting, we seek approval by our stockholders of our new 2008 Employee Stock Purchase Plan (the “New ESPP”) and the reservation of 20,000,000 shares of our common stock for issuance under the New ESPP (representing approximately 2.4% of our outstanding common stock as of July 4, 2008). The New ESPP was adopted by our Board on April 29, 2008 and will become effective immediately upon stockholder approval. We anticipate that the first Offering Period (as defined below) under the plan will begin on February 16, 2009. The terms of the New ESPP are substantially similar to the terms of our 1998 Employee Stock Purchase Plan, as amended (the “Old ESPP”), and are summarized below.

 

The purpose of the New ESPP is to continue providing our employees and employees of our subsidiaries and affiliates with the ability to acquire shares of our common stock at a discount to the purchase date fair market value through accumulated payroll deductions. This is a long-standing benefit program and we believe it is important in helping us retain employees and helping align the interests of our employees with those of our stockholders. We seek approval of the New ESPP because the Old ESPP terminates for all purposes when the final offering period under the Old ESPP ends on February 15, 2009. As of July 4, 2008, an aggregate of 28,985,911 shares of common stock have been issued, and 9,618,489 shares remain available for future issuance, under the Old ESPP. We anticipate that approximately 4,500,000 shares will remain unissued under the Old ESPP when it expires in January 2009.

 

If our stockholders approve the New ESPP, this approval will satisfy the stockholder approval requirements under Section 423 of the Code and so permit certain participants to receive special tax treatment under Code Section 423 with respect to the purchase and sale of the shares purchased under the plan. The New ESPP also allows us the flexibility to create sub-plans which are designed to achieve tax, securities law or other Company compliance objectives in particular locations outside the United States and which are not required to comply with the requirements of Code Section 423. We believe this new feature expands our ability to design global compensation programs by facilitating participation by employees of Symantec or our subsidiaries or affiliates who are foreign nationals or employed or reside outside the United States. If the New ESPP is not approved by our stockholders, the Old ESPP will terminate pursuant to its terms so that no new offering periods will commence after January 1, 2009, its final offering period will end on February 15, 2009 and we would thereafter not be able to offer to eligible employees this means of acquiring our common stock.

 

In 2005, our Board amended the terms of the Old ESPP to limit the benefits offered to our eligible employees so as to eliminate the “lookback” feature of the Old ESPP. This means that we eliminated the pricing formula that had previously applied allowing employees to purchase stock at a 15% discount to market price measured either on the first business day or the last business day of the Offering Period, whichever was lower. We made this change in response to changes in the accounting rules applicable to equity compensation plans in order to decrease (but not eliminate) the expense we would recognize for financial statement purposes with respect to the Old ESPP. We intend at this time to continue the same structure under the New ESPP as we have been using since 2005 under the Old ESPP.

 

The following is a summary of the principal provisions of the New ESPP. This summary does not purport to be a complete description of all of the provisions of the New ESPP. It is qualified in its entirety by reference to the full text of the New ESPP. A copy of the New ESPP has been filed with the SEC with this proxy statement, and any stockholder who wishes to obtain a copy of the New ESPP may do so by written request to the Secretary at Symantec’s headquarters in Cupertino, California.

 

General; Statutory Plan and Non-Statutory Plans

 

The New ESPP reserves 20,000,000 shares of common stock for issuance to employees. It will be administered by our Board or a committee appointed by the Board (the “Committee”). At the present time, the New ESPP is administered by the Compensation Committee of the Board. It is governed by Delaware law, and all questions of interpretation or application of the New ESPP are determined by the Committee.

The New ESPP allows us the ability to establish separate sub-plans to permit the purchase of our common stock either through the “Statutory Plan,” which is intended to satisfy the requirements of Section 423 of the Code, or through one or more “Non-Statutory Plans” which will not comply with Section 423. Each of the Statutory Plan and the Non-Statutory Plans shall be operated as separate and independent plans, although the total number of shares authorized to be issued under the New ESPP applies in the aggregate to both the Statutory Plan and all Non-Statutory Plans. Other than the share reserve, our Board may adopt special provisions, rules and procedures for a particular Non-Statutory Plan that are different from, and may in certain cases supersede the provisions of the New ESPP, without seeking stockholder approval.

 

Offering Periods

 

The New ESPP will operate by offering eligible employees the right to purchase stock through a series of successive or overlapping offering periods (each an “Offering Period”). While we may offer Offering Periods of any duration up to 27 months, we currently intend to operate the plan beginning in February 2009 through a series of successive six-month Offering Periods that will begin each February 16 and August 16 (or the first business day after that date), and end, respectively, on the following August 15 and February 15 (or the last business day preceding that date). The New ESPP also permits us to provide for multiple purchase dates within a single Offering Period. We intend at this time to continue the structure we are using under the Old ESPP of having only a single purchase date for each Offering Period. This single purchase date will occur on the last business day of the Offering Period, at which time all accrued payroll deductions of each participant are applied to the purchase of shares on the purchase terms described below.

 

Eligibility and Participation

 

Employees (including officers and employee directors) who are employed for at least 20 hours per week and more than five months in any calendar year and who are employed by us as of the third business day before the beginning of an Offering Period are eligible to participate in that Offering Period, subject to certain limitations imposed by Section 423(b) of the Code, applicable local law for locations outside of the United States and the plan itself. For example, no employee may be granted an option under the New ESPP if immediately after the grant such employee would own stock and/or hold outstanding options to purchase stock possessing 5% or more of the total voting power or value of all classes of stock of Symantec or our subsidiaries. As of July 4, 2008, approximately 17,000 employees (including officers and employee directors) were eligible to participate in the New ESPP. As a result of such eligibility, each executive officer and each person who previously served as an executive officer during fiscal 2008 and remains employed by Symantec has an interest in Proposal No. 3.

 

Eligible employees become participants in the New ESPP by submitting an enrollment form authorizing payroll deductions prior to the beginning of an Offering Period (unless payroll deductions are not permitted under local law, in which case such other payment methods as we may approve). Once a participant enrolls in an Offering Period under the New ESPP, he or she is automatically enrolled in subsequent Offering Periods unless he or she withdraws from or becomes ineligible to participate in the plan. Once an employee has enrolled in the New ESPP, amounts are withheld from his or her compensation during each payroll period as described below. An employee may elect to have not less than 2% nor more than 10% of his or her compensation during an Offering Period withheld to be used to purchase shares under the New ESPP. Eligible compensation is defined in the New ESPP as all compensation including base salary, wages, commissions, overtime, shift premiums and bonuses, plus draws against commissions but excluding amounts related to Company equity compensation, except that for purposes of any Non-Statutory Plan, compensation is defined as base salary. A participant may decrease, but not increase, the rate of his or her payroll deductions once during an ongoing Offering Period by completing and filing a new authorization for payroll deductions form.

 

Grant and Exercise of Option; Purchase Price

 

On the first trading date of an Offering Period (which is referred to as the grant date or the “Offering Date”), each participant is granted an option to purchase up to that number of shares determined by dividing his or her payroll deductions accumulated during the Offering Period as of the last trading day of the Offering Period by the purchase price applicable for that Offering Period. As we intend to continue operating the New ESPP as we have

operated the Old ESPP, we expect the purchase price for each Offering Period to be 85% of the fair market value of a share of our common stock on the last trading day of the Offering Period (the “Purchase Date”). For purposes of the New ESPP, “fair market value” means the closing sale price of our common stock on the Purchase Date, as reported in The Wall Street Journal or other source deemed reliable by the Committee. The New ESPP allows us to vary the purchase price that applies to an Offering Period to provide for the greatest discount allowed under Code Section 423 (which means that the purchase price cannot be less than 85% of the fair market value of our stock at the beginning or at the end of the Offering Period, whichever value is lower).

 

Certain limitations on the number of shares that a participant may purchase apply. For example, the option granted to an employee may not permit him or her to purchase stock under the New ESPP at a rate which exceeds $25,000 in fair market value of such stock (determined as of the Offering Date) for each calendar year in which the option is outstanding. In addition, we have set 10,000 shares as the maximum number of shares an employee may purchase on each purchase date. The New ESPP allows us to increase or decrease this share limit without stockholder approval. In addition, we will make a pro rata reduction in the number of shares subject to options outstanding under the New ESPP if the total number of shares that would otherwise be purchased on a Purchase Date by all participants exceeds the number of shares remaining available under the plan.

 

Provided the employee continues participating in the plan through the end of an Offering Period, his or her option to purchase shares is exercised automatically at the end of the Offering Period, and the maximum number of shares that may be purchased with accumulated payroll amounts at the applicable purchase price are issued to the employee.

 

Rights to purchase stock under the New ESPP are generally not transferable by the employee.

 

Termination of Employment; Withdrawal from New ESPP

 

Termination of a participant’s employment for any reason, including retirement or death, or the failure of the participant to remain in the continuous employ of Symantec for at least 20 hours per week and more than five months in any calendar year during the applicable Offering Period, cancels his or her option to purchase and terminates his or her participation in the New ESPP immediately. In such event, the payroll deductions credited to the participant’s account will be returned (without interest unless required by applicable law) to him or her or, in the case of death, to the person or persons entitled thereto as provided in the New ESPP.

 

A participant may withdraw from the New ESPP at any time during an Offering Period prior to a date specified for administrative reasons prior to the Purchase Date. Upon withdrawal, the participant’s accumulated payroll amounts are returned to him or her, without interest unless required by applicable law.

 

Adjustments upon Changes in Capitalization; Corporate Transactions

 

Subject to any required action by our stockholders, in the event any change is made in Symantec’s capitalization during an Offering Period, such as a stock split, stock dividend, subdivision, combination, reclassification or similar change that results in an increase or decrease in the number of shares of our common stock outstanding without receipt of consideration by Symantec, proportionate adjustment shall be made to the number of shares remaining available for issuance under the New ESPP, the purchase price and number of shares subject to then-outstanding options under the New ESPP, and the maximum number of shares that may be purchased on any purchase date.

 

In the event of a proposed dissolution or liquidation of Symantec, the Offering Period then in progress will terminate immediately prior to the consummation of the transaction, unless our Board provides otherwise in connection with the transaction. In the event of a sale of all or substantially all of our assets, or if we (or one of our affiliated companies) merge with or into another corporation or engage in a similar acquisition transaction, each then-outstanding option under the New ESPP will be assumed or an equivalent substitute option substituted by our successor entity, unless our Board elects in lieu of that treatment to simply shorten the Offering Period then in progress and allow each outstanding option to be automatically exercised on a specified date preceding closing of the transaction. If our Board sets an earlier Purchase Date in connection with an asset sale, merger or similar transaction, the Offering Period then in progress will terminate on that Purchase Date.

Amendment and Termination of the New ESPP

 

Our Board may at any time amend or terminate the New ESPP without the approval of the stockholders or employees, except that a termination generally cannot adversely affect options then outstanding (although the New ESPP provides for certain exceptions to this rule). We will seek stockholder approval of any plan amendment where stockholder approval is required under applicable law, including if we seek to increase the number of shares of common stock reserved for issuance under, or expand the class of employees eligible to participate in, the New ESPP.

 

The New ESPP expires ten years from the date the stockholders approve it, unless sooner terminated by the Board or unless we obtain stockholder approval of an amendment that extends the plan’s term.

 

Because benefits under the New ESPP will depend on the fair market value of our common stock at various future dates, it is not possible to determine the benefits that will be received by employees if the New ESPP is approved by our stockholders. During fiscal year 2008, three Named Executive Officers participated in the Old ESPP.

 

The following is a brief summary of the general U.S. federal income tax consequences to U.S. taxpayers and Symantec of shares purchased under the Statutory Plan, which is a sub-plan of the New ESPP. This summary is not complete and does not discuss the tax consequences of a participant’s death or the income tax laws of any state or foreign country in which the participant may reside. Tax consequences for any particular individual may be different.

 

The Statutory Plan and the options granted under the Statutory Plan are intended to qualify for favorable federal income tax treatment associated with rights granted under an “employee stock purchase plan” that qualifies under provisions of Section 423 of the Code.

 

Amounts of a participant’s compensation withheld for the purchase of shares of our common stock under the Statutory Plan will be subject to regular income and employment tax withholding as if such amounts were actually received by the employee. Other than this, no income will be taxable to a participant until sale or other disposition of the acquired shares. Under current law, no other withholding obligation applies to the events under the Statutory Plan.

 

Tax treatment upon transfer of the purchased shares depends on how long the participant holds the shares from the Purchase Date to the transfer date. If the stock is disposed of more than two years after the Offering Date, and more than one year after the Purchase Date for the stock being transferred, then the lesser of (i) the excess of the fair market value of the stock at the time of such disposition over the purchase price or (ii) the excess of the fair market value of the stock as of the Offering Date over the purchase price (determined as of the Offering Date) will be treated as ordinary income. Any further gain will be taxed as a long-term capital gain. Under current law, long-term capital gains are generally subject to lower tax rates than ordinary income. If the fair market value of the stock on the date of the disposition is less than the purchase price paid for the shares, there will be no ordinary income, and any loss recognized will be a capital loss.

 

If the stock is sold or disposed of before the expiration of either of the holding periods described above, then the excess of the fair market value of the stock on the Purchase Date for the shares over the purchase price will be treated as ordinary income at the time of the sale or disposition. The balance of any gain will be treated as capital gain. Even if the stock is disposed of for less than its Purchase Date fair market value, the same amount of ordinary income is attributed to the participant, and a capital loss is recognized equal to the difference between the sales price and the fair market value of the stock on such Purchase Date. Any capital gain or loss will be short-term or long-term, depending on how long the stock has been held.

 

There are no U.S. federal income tax consequences to Symantec by reason of the grant or exercise of options under the New ESPP. Symantec is entitled to a deduction to the extent amounts are taxed as ordinary income to a participant.

Symantec may also grant options under Non-Statutory Plans to employees of our designated subsidiaries and affiliates that do not participate in the Statutory Plan. The specific terms of such Non-Statutory Plans are not yet known, accordingly it is not possible to discuss with certainty the relevant tax consequences of these Non-Statutory Plans. The Non-Statutory Plans will be sub-plans of the New ESPP that are generally not intended to qualify under the provisions of Sections 421 and 423 of the Code. Therefore, it is likely that at the time of the exercise of an option under a Non-Statutory Plan, an employee subject to tax under the Code would recognize ordinary income equal to the excess of the fair market value of the stock on the date of exercise and the purchase price, Symantec would be able to claim a tax deduction equal to this difference, and Symantec would be required to withhold employment taxes and income tax at the time of the purchase.

 

Based on Statement of Financial Accounting Standards No. 123(R), Symantec recognizes compensation expense in connection with options outstanding under the New ESPP. So long as Symantec continues issuing shares under the New ESPP with a purchase price at a discount to the fair market value of its stock, Symantec will recognize compensation expense which will be determined by the level of participation in the New ESPP. As mentioned above, in 2005 we amended the structure of the Old ESPP in a manner that we believe decreased the amount of compensation expense we are required to recognize and we intend to maintain that structure when we commence operation of the New ESPP.

 

THE BOARD RECOMMENDS A VOTE “FOR” APPROVAL OF PROPOSAL NO. 3

 

APPROVAL OF THE MATERIAL TERMS OF THE
AMENDED AND RESTATED SYMANTEC SENIOR EXECUTIVE INCENTIVE PLAN

 

You are being asked to approve certain material terms of the Symantec Senior Executive Incentive Plan (as amended and restated, the “SEIP”) to allow future performance-based compensation awards under the SEIP to be fully deductible by Symantec under Section 162(m) of the Code. The Board approved an amendment and restatement of the SEIP on April 29, 2008, subject to the stockholder approval of certain material terms of the SEIP we are seeking at the annual meeting under this Proposal No. 4. Stockholder approval of this Proposal No. 4 will be effective with respect to awards granted under the SEIP following the date of the annual meeting and will not affect any awards granted prior to August 21, 2008.

 

The SEIP is a plan structured so as to qualify compensation paid under it to certain executive officers as “performance-based compensation” under federal tax rules applicable to public companies. Section 162(m) of the Code generally disallows a tax deduction to public companies for compensation in excess of $1 million paid during a single year to the company’s Chief Executive Officer or any of the three other most highly compensated executive officers. Certain performance-based compensation is exempt from this deduction limit if it meets the requirements of Section 162(m), including a requirement that payment of the compensation be contingent upon achievement of performance goals that are established and administered in a manner specified under Section 162(m). In addition, to qualify as performance-based compensation, the compensation (or the plan under which it is granted, including the possible performance goals that may be used) must have been approved by stockholders, there must be a limit on the amount of compensation that may be paid to an employee during a specified period of time, and achievement of the applicable performance goals must be substantially uncertain at the time the individual awards are established. Finally, Section 162(m) imposes certain independence requirements on the members of the Board-level committee administering the performance-based compensation program.

 

We currently operate two cash incentive award programs under the SEIP, our Annual Incentive Plan which has a performance period that coincides with our fiscal year, and our Long-Term Incentive Plan which has two-year performance periods. These programs are described in more detail in our “Compensation Discussion & Analysis” (beginning on page 42). Operating these two programs under the SEIP allows us to fully deduct amounts paid under them to our named executive officers. To continue to operate the SEIP as a plan under which performance-based compensation may be granted, we seek your approval of the performance goals (set forth below) that may be used in connection with the grant of awards under the SEIP. Section 162(m) requires that stockholders re-approve such performance goals every five years. Our stockholders are considered to have last approved the SEIP’s performance goals when they originally approved the SEIP in August 2003. Approval of this Proposal No. 4 will allow us to grant tax-qualified awards under the SEIP until September 22, 2013.

 

Your approval of this Proposal No. 4 will constitute approval of all the material terms of the SEIP for purposes of Section 162(m), as described in this Proposal No. 4.

 

If our stockholders do not approve this Proposal No. 4, then the SEIP will continue in its current form until the current stockholder approval of the plan expires on August 21, 2008 (although certain amendments made to the SEIP by our Compensation Committee that do not require stockholder approval will be given effect) and, after that date, we will no longer be able to grant awards that qualify as performance-based compensation under Section 162(m) from the SEIP. While we would continue to be permitted to award and pay cash incentive bonuses to our executive officers outside the SEIP regardless of whether our stockholders approve this Proposal No. 4, we would cease making awards under the SEIP following the annual meeting if our stockholders in fact do not approve this Proposal No. 4, and as a result, we might not be able to deduct some or all of the cash bonus amounts paid to executive officers in future years.

 

The SEIP is a component of Symantec’s overall strategy to pay its employees for delivering measurable results. The purposes of the SEIP are to motivate senior executives (as defined in the SEIP) by tying compensation to performance, to reward exceptional performance that supports Symantec objectives and to attract and retain top-performing senior executives. Additional information about amounts paid under the SEIP to our named executive officers during our last completed fiscal year are contained in the Summary Compensation Table (beginning on page 54) and the Grants of Plan-Based Awards Table (beginning on page 56). Additional discussion about the SEIP is included in the Compensation Discussion & Analysis section (beginning on page 42).

 

The following is a summary of the principal provisions of the SEIP, as amended and restated by this proposal. This summary is qualified in its entirety by reference to the full text of the SEIP. A copy of the SEIP has been filed with the SEC with this proxy statement, and any stockholder who wishes to obtain a copy of the SEIP may do so by written request to the Secretary at Symantec’s headquarters in Cupertino, California.

 

Performance Goals.  To qualify awards as performance-based compensation under Section 162(m), the payment of the value of such awards must be made contingent upon achievement of performance goals approved by the Compensation Committee and our stockholders. The SEIP permits us to use one or more of the following performance goals with respect to awards:

 

 

The above goals differ from the goals in the plan last approved by the stockholders by the addition of the last goal regarding strategic plan development and implementation.

 

The Compensation Committee may adjust its evaluation of actual performance under a performance goal to exclude certain events that occur during a performance period such as asset write-downs; currency effects; litigation or claims judgments or settlements; changes in tax law, accounting principles or other laws or regulations affecting reported results; accruals for reorganization or restructuring programs; and other extraordinary non-recurring items described in published accounting rules and/or in Management’s Discussion and Analysis of Financial Conditions and Results of Operations in our annual report to stockholders for the year.

 

Annual Cash Limit.  The maximum aggregate amount of cash awards that may be granted during any single fiscal year to any individual employee is $5,000,000. We do not seek to increase this annual cash limit.

 

Administration.  As stated above, the Compensation Committee administers the SEIP. Compensation Committee members must qualify as “outside directors” under Section 162(m) in order for awards under the SEIP to qualify as deductible performance-based compensation under the Code. All of our Compensation Committee members meet this requirement. Subject to the terms of the SEIP, the Compensation Committee has the discretion to determine the key employees who will receive awards as well as the amounts, terms and conditions of each award, including the performance period and goal(s) that apply to the award and whether or not the goal(s) are achieved. The Compensation Committee may delegate its authority to administer awards to a separate committee or to one or more individuals who are not members of the Compensation Committee, but only with respect to participants whom it believes will not be considered “covered persons” under Section 162(m).

 

Eligibility.  Senior executive officers subject to Section 16 of the Securities Exchange Act of 1934 are eligible to participate in the SEIP, as well as other employees who may be designated from time to time by the

Compensation Committee. In selecting participants for the SEIP, the Compensation Committee will choose those senior executives whom the Compensation Committee believes are most likely to make significant contributions to Symantec’s success. The actual number of employees who will receive awards under the SEIP cannot be determined in advance because eligibility for participation is in the discretion of the Compensation Committee. As of July 4, 2008, there are nine employees who are executive officers subject to Section 16 of the Exchange Act. Nine Symantec executive officers participated in the SEIP during fiscal 2008. Although participation in future years is in the discretion of the Compensation Committee, each executive officer has an interest in Proposal No. 4. Information about fiscal year 2009 awards is presented below under “New Plan Benefits.”

 

SEIP Awards.  Under the SEIP, the Compensation Committee will determine the fiscal year or a performance period of some other duration for measuring actual performance. The Compensation Committee will establish for each performance period the performance goals (from among those listed above) that apply and the target levels of required performance, as well as a formula for calculating a participant’s award based on actual performance compared to the pre-established performance goals. The Compensation Committee will establish the performance goals at a time when the outcome of the goal is substantially uncertain in a manner and at such time as is a permitted method of establishing performance goals under Section 162(m) (generally soon after the performance period commences).

 

The Compensation Committee may set performance periods and performance goals that differ from participant to participant. For example, it may designate performance goals based on either company-wide or business unit or segment results, as appropriate for the participant’s specific responsibilities. The Compensation Committee may also measure the performance goals annually or cumulatively over a period of years or over a period shorter than one year, on an absolute basis, or relative to a pre-established target, to previous years’ results or to a designated comparison group. After the end of each performance period, the Compensation Committee will determine the extent to which the performance goals for each participant were achieved. The Compensation Committee will determine the actual award (if any) for each participant by the level of actual performance achieved. However, the Compensation Committee retains discretion to eliminate or reduce the actual award payable to any participant below that which otherwise would be payable under the applicable formula at any time before the award is paid. The Compensation Committee also has discretion to make certain adjustments to take into account certain extraordinary events occurring during the performance period (as described above).

 

In order to earn and receive payment of an award under the SEIP, the participant must be an active employee and on Symantec’s payroll on either (a) the last day of the fiscal year (or performance period) to which the award relates or (b) the date of payment or vesting, in each case as specified in the documents governing the specific award. The Compensation Committee may make exceptions to this requirement in the case of retirement, death or disability, or in the case of a corporate change in control, although it may exercise this discretion only if permitted under the requirements applicable to performance-based compensation under Section 162(m).

 

Awards granted under the SEIP are not transferable by a participant, except by will or the laws of descent and distribution.

 

SEIP Amendments and Termination; Stockholder Approval.  The Board may amend or terminate the SEIP at any time and for any reason. In order to maintain the plan’s qualification under Section 162(m), certain material amendments of the SEIP will require stockholder approval. In addition, to maintain qualification of this plan under Section 162(m) with respect to awards granted thereafter, we will be required to obtain stockholder approval of the performance goals no later than September 22, 2013.

 

SEIP Benefits.  Because payments of cash awards under the SEIP will be determined by comparing actual performance to the performance goals established by the Compensation Committee under this plan, it is not possible to predict the amount of future benefits that will be paid under the SEIP for any future performance period. The Summary Compensation Table (beginning on page 54) sets forth the dollar amount of awards that were earned by our named executive officers with respect to our fiscal year 2008.

 

All awards to executive officers are based on actual performance during fiscal 2009 and are made at the discretion of the Compensation Committee. Therefore, the benefits and amounts that will be received or allocated under the SEIP are not determinable at this time. Cash incentive programs we currently operate under the SEIP maintain the following performance goals: for the one-year performance period under our Annual Incentive Plan that coincides with our fiscal year 2009, earnings per share, revenue and only with respect to certain persons a measure related to business unit management; and for the one-year performance period covering our fiscal year 2009 under our Long-Term Incentive Plan, an operating cash flow metric.

 

Target amounts for our continuing named executive officers under the Annual Incentive Plan and the Long-Term Incentive Plan for the respective performance periods beginning on the start of our fiscal year 2009 are as follows:

 

 

 

 

The following is only a summary of the effect of U.S. federal income taxation on participants and Symantec with respect to the grant of awards under the SEIP. It does not purport to be complete and does not discuss the tax consequences arising in the context of the participant’s death or the income tax laws of any municipality, state or foreign country in which the participant’s income or gain may be taxable.

 

Cash awards granted under the SEIP will cause the participant to have taxable ordinary income, in the year of receipt, equal to the cash received. Any cash received will be subject to tax withholding by Symantec.

 

The American Jobs Creation Act of 2004 added Section 409A to the tax code, generally effective January 1, 2005. The IRS has issued proposed and final regulations that, in part, give employers until the end of 2008 to effect written Section 409A implementation in almost all circumstances. Section 409A covers most programs that defer

the receipt of compensation to a year following the year in which the recipient first had a vested right to the compensation. It provides rules for elections to defer (if any) and for timing of payouts. There are significant penalties placed on the individual employee for failure to comply with Section 409A. While Section 409A may affect the timing of our withholding obligations, it does not affect our ability to deduct deferred compensation. We operate the SEIP in a manner that exempts it from application of Section 409A, although the SEIP allows us to offer deferral programs to participants with respect to their plan awards. To the extent we adopt such deferral programs from time to time, we would intend to operate them so that the additional taxes and other penalties provided for under Section 409A would not apply to amounts paid under the SEIP.

 

As discussed above, our purpose in seeking stockholder approval with respect to the SEIP under this Proposal No. 4 is to qualify future SEIP awards as performance-based compensation under Section 162(m) so that we may fully deduct amounts paid under these awards.

 

The Audit Committee has selected KPMG as Symantec’s principal independent registered public accounting firm to perform the audit of Symantec’s consolidated financial statements for fiscal year 2009. As a matter of good corporate governance, the Audit Committee has decided to submit its selection of independent audit firm to stockholders for ratification. In the event that this selection of KPMG is not ratified by a majority of the shares of common stock present or represented at the annual meeting and entitled to vote on the matter, the Audit Committee will review its future selection of KPMG as Symantec’s independent registered public accounting firm.

 

The Audit Committee first approved KPMG as the company’s independent auditors in September 2002, and KPMG audited Symantec’s financial statements for Symantec’s 2008 fiscal year. Representatives of KPMG are expected to be present at the meeting, in which case they will be given an opportunity to make a statement at the meeting if they desire to do so, and will be available to respond to appropriate questions.

 

The company regularly reviews the services and fees from its independent registered public accounting firm. These services and fees are also reviewed with the Audit Committee annually. In accordance with standard policy, KPMG periodically rotates the individuals who are responsible for the company’s audit. Symantec’s Audit Committee has determined that the providing of certain non-audit services, as described below, is compatible with maintaining the independence of KPMG.

 

In addition to performing the audit of the company’s consolidated financial statements, KPMG provided various other services during fiscal years 2008 and 2007. Symantec’s Audit Committee has determined that KPMG’s provisioning of these services, which are described below, does not impair KPMG’s independence from Symantec. The aggregate fees billed for fiscal years 2008 and 2007 for each of the following categories of services are as follows:

 

 

The categories in the above table have the definitions assigned under Item 9 of Schedule 14A promulgated under the Securities Exchange Act of 1934, and with respect to Symantec’s 2008 and 2007 fiscal years, these categories include in particular the following components:

 

(1) “Audit fees” include fees for audit services principally related to the year-end examination and the quarterly reviews of Symantec’s consolidated financial statements, consultation on matters that arise during a review or audit, review of SEC filings, audit services performed in connection with Symantec’s acquisitions and statutory audit fees.

 

(2) “Audit related fees” include fees which are for assurance and related services other than those included in Audit fees.

 

(3) “Tax fees” include fees for tax compliance and advice.

 

(4) “All other fees” include fees for all other non-audit services, principally for services in relation to certain information technology audits.

 

An accounting firm other than KPMG performs internal audit services for the company. Another accounting firm provides the majority of Symantec’s tax services.

 

The Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. Pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The independent registered public accounting firm and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval, and the fees for the services performed to date. The Audit Committee may also pre-approve particular services on a case-by-case basis.

 

All of the services relating to the fees described in the table above were approved by the Audit Committee.

 

THE BOARD RECOMMENDS A VOTE “FOR” APPROVAL OF PROPOSAL NO. 5

 

The names of our executive officers, their ages as of July 4, 2008, and their positions are shown below.

 

 

The Board chooses executive officers, who then serve at the Board’s discretion. There is no family relationship between any of the directors or executive officers and any other director or executive officer of Symantec.

 

For information regarding Mr. Thompson, please refer to Proposal No. 1, “Election of Directors,” above.

 

Mr. Salem has served as our Chief Operating Officer since January 2008. From April 2007 to January 2008, Mr. Salem had served as our Group President, Worldwide Sales and Marketing. Mr. Salem previously served as our Group President, Consumer Products from May 2006 to April 2008, Senior Vice President, Consumer Products and Solutions from February 2006 to May 2006, Senior Vice President, Security Products and Solutions from January 2006 to February 2006, and as Senior Vice President, Network and Gateway Security Solutions from June 2004 to February 2006. Prior to joining Symantec, from 2002 to June 2004, he was President and CEO of Brightmail Incorporated, an anti-spam software company that was acquired by Symantec. From 2001 to 2002, Mr. Salem served as Senior Vice President of Products and Technology at Oblix Inc., an identity-based security products developer, and from 1999 to 2001, he was Vice President of Technology and Operations at Ask Jeeves Inc., an online search engine provider. From 1990 to 1999, Mr. Salem led the security business unit at Symantec. Mr. Salem received a Bachelor of Arts in computer science from Dartmouth College.

 

Mr. Beer has served as our Executive Vice President and Chief Financial Officer since February 2006. From 1991 to February 2006, Mr. Beer held various management positions in finance and operations at American Airlines Inc., a passenger airline company, including leading the airline’s European and Asia Pacific businesses. He most recently served as Senior Vice President and Chief Financial Officer of AMR Corporation and AMR’s principal subsidiary, American Airlines, since January 2004. Mr. Beer holds a Bachelor of Science in aeronautical engineering from Imperial College, London University and a master’s degree in business administration from Harvard Business School.

 

Mr. Hughes has served as our Chief Strategy Officer since January 2008. From April 2007 to January 2008, Mr. Hughes served as our Group President, Global Services. He joined Symantec through the company’s merger with Veritas in July 2005 and served as our Executive Vice President, Services and Support, from July 2005 to April 2007. At Veritas, Mr. Hughes most recently served as Executive Vice President, Global Services from October 2003 to July 2005. Mr. Hughes joined Veritas after a 10-year career at McKinsey & Co., a global management consulting service provider, where he most recently served as a Partner. During his 10-year career at McKinsey, he founded and led the North American Software Industry practice and worked as a consultant to senior executives across a range of industries on information-technology related issues. Mr. Hughes holds a Master of Business Administration degree from the Stanford Graduate School of Business, and a bachelor’s degree in electrical

engineering and a master’s degree in electrical engineering and computer science from Massachusetts Institute of Technology.

 

Ms. Chaffin has served as our Group President, Consumer Business Unit since April 2007. From May 2006 to April 2007, Ms. Chaffin served as our Executive Vice President and Chief Marketing Officer. Ms. Chaffin joined Symantec in May 2003 and served as our Senior Vice President and Chief Marketing Officer from May 2003 to May 2006. Prior to Symantec, Ms. Chaffin spent 21 years at Hewlett-Packard Company, a global provider of products, technologies, solutions and services, where she held a variety of marketing and business management positions and most recently served as Vice President of Enterprise Marketing and Solutions. Ms. Chaffin is a member of the board of directors of Informatica Corporation, an enterprise data integration software and services provider. She graduated summa cum laude from the University of California, San Diego with a bachelor’s degree and earned a master’s degree in business administration from the University of California, Los Angeles, where she was a Henry Ford Scholar.

 

Mr. Thompson has served as our Group President, Information Technology and Services since January 2008. From February 2006 to January 2008, he had served as Symantec’s Executive Vice President and Chief Information Officer. Prior to joining Symantec, Mr. Thompson was Senior Vice President and Chief Information Officer for Oracle Corporation, a global enterprise software company, from January 2005 to January 2006. Before joining Oracle, Mr. Thompson was Vice President of Services and Chief Information Officer at PeopleSoft, Inc., an enterprise application software products company, from 1995 to January 2005.

 

Mr. Courville has served as our Executive Vice President since May 2006, General Counsel since February 2006 and as Secretary since 1999. He previously served as Senior Vice President, Corporate Legal Affairs from July 2005 to February 2006, and as Vice President and General Counsel from 1999 to July 2005. Mr. Courville joined Symantec in 1993, and was promoted to Director of the Legal Department in 1994. In 1997, Mr. Courville took the position of Director of Product Management for the Internet Tools Business Unit of Symantec, where he was responsible for all product management activities related to Java programming and HTML editing products. Mr. Courville later returned to the legal department as Senior Director before his appointment as Vice President and General Counsel in 1999. Prior to joining Symantec, Mr. Courville practiced law with the law firm of Gibson, Dunn & Crutcher. Mr. Courville holds a Bachelor of Arts in Economics from Stanford University, a law degree from UC Berkeley School of Law and a Masters of Business Administration from the Haas School of Business at the University of California, Berkeley.

 

Ms. Ranninger has served as our Executive Vice President and Chief Human Resources Officer since May 2006. Ms. Ranninger previously served as Senior Vice President, Human Resources from 2000 to May 2006. From 1997 to 2000, she held the position of Vice President, Human Resources. Prior to 1997, Ms. Ranninger served for over six years as an attorney in the legal department. Before joining Symantec in 1991, Ms. Ranninger was a business litigator with the law firm of Heller Ehrman White & McAuliffe. Ms. Ranninger graduated magna cum laude from Harvard University with a bachelor’s degree, earned a bachelor’s degree in jurisprudence from Oxford University and a Juris Doctorate from Stanford University.

 

Mr. Harrington has served as our Senior Vice President, Finance, and Chief Accounting Officer since January 2007. In this capacity, Mr. Harrington serves as the Company’s principal accounting officer. Mr. Harrington joined Symantec in May 2006, and served as Senior Vice President, Finance Operations from May 2006 to January 2007. Prior to joining Symantec, Mr. Harrington had served as Senior Vice President and Chief Financial Officer of BMC Software, Inc., a software solutions provider, from March 2004 to September 2005, and had served in a variety of senior finance roles at International Business Machines Corporation, a global information technology company, since 1981. As Vice President of Finance for IBM Software Group, Mr. Harrington was the senior executive responsible for all financial and IT aspects of IBM’s $13 billion software organization. Mr. Harrington also served as the Chief Accountant for IBM. In addition, he served as Vice President, Finance for IBM Americas, responsible for all financial aspects of a $38 billion IBM division. Mr. Harrington also served in a range of finance leadership positions for IBM’s Americas, Asia Pacific and European operations. Mr. Harrington earned a Bachelor of Arts in Political Science and a Masters in Business Administration from Brigham Young University.

 

The following table sets forth information, as of July 4, 2008, 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 member of the Board , (iii) the named executive officers of Symantec included in the Summary Compensation Table appearing on page 54 of this proxy statement and (iv) all current executive officers and directors of Symantec as a group.

 

Beneficial ownership is determined under the rules of the SEC and generally includes voting or investment power with respect to securities. Unless otherwise indicated below, the persons and entities named in the table have sole voting and sole investment power with respect to all shares beneficially owned, subject to community property laws where applicable. Percentage ownership is based on 837,672,679 shares of Symantec common stock outstanding as of July 4, 2008 (excluding shares held in treasury). Shares of common stock subject to stock options and restricted stock units vesting on or before September 2, 2008 (within 60 days of July 4, 2008) are deemed to be outstanding and beneficially owned for purposes of computing the percentage ownership of such person but are not treated as outstanding for purposes of computing the percentage ownership of others.

 

 

 

 

 

Symantec has adopted a policy that executive officers and members of the Board hold an equity stake in the company. The policy requires each executive officer to hold a minimum number of shares of Symantec common stock. Newly appointed executive officers are not required to immediately establish their position, but are expected to make regular progress to achieve it. The Compensation Committee reviews the minimum number of shares held by the executive officers and directors from time to time. The purpose of the policy is to more directly align the interests of our executive officers and directors with our stockholders.

 

Section 16 of the Exchange Act requires Symantec’s directors and officers, and any 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. 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 representations from the directors and executive officers, Symantec believes that all Section 16(a) filing requirements were met in fiscal year 2008.

 

INTRODUCTION

 

Our Compensation Philosophy

 

Our executive compensation programs are intended to further our success as a market leader in the information technology industry. In structuring and overseeing these programs, we focus on achievement of corporate and individual performance objectives, attracting and retaining highly-qualified senior leadership, and enhancement of long-term stockholder value.

 

A number of principles and circumstances inform our executive compensation decisions. We believe that we have an excellent executive management team and recognize that that team plays a critical role in enabling us to achieve superior Company performance. An important principle driving our compensation programs is our belief that it benefits all our constituencies for management’s compensation to be tied to the Company’s current and long-term performance. As a result, at-risk pay comprises a significant portion of our executive compensation, in particular for individuals holding more senior and influential positions at Symantec.

 

We believe it is important to continue to attract, appropriately motivate and retain highly-qualified executives who are energetically committed to Symantec’s success. We look to relevant market and industry practices to structure compensation packages that are competitive in the markets in which we compete for executive talent. While we strive for a basic level of internal pay equity among our management team members, we also believe that it is important to reward outstanding individual performance, team success, and Company-wide results.

 

We are also sensitive to our need to balance the interests of our executives with those of our stockholders, especially when our compensation decisions might increase our cost structure or stockholder dilution. We work hard to appropriately balance the interests of all our constituencies — our executive officers, the remainder of our employee base, our stockholders, our business partners and our community.

 

Summary of Compensation Matters During Fiscal 2008

 

Fiscal 2008 was a successful year for the company during which we achieved strong performance on the core financial metrics linked to our executive compensation programs — revenue, earnings per share and cash flow from operations. Our executive officers were compensated consistent with our pay-for-results compensation philosophy and in keeping with the terms of our compensation arrangements. Specifically, as discussed more fully below, we exceeded our revenue and EPS targets under our Executive Annual Incentive Plan and our cash flow from operations target under our FY08 Long Term Incentive Plan (the “LTIP”).

 

Roles of Our Compensation Committee, Executive Officers and Consultants in our Compensation Process

 

The Committee, which is comprised of independent directors, establishes and oversees the overall strategy for employee compensation, including our executive compensation programs. For more details about the Committee’s functions and additional information about Committee members, see the “Corporate Governance Standards and Director Independence” section (beginning on page 5) and the “Board Committees and Their Functions” section (beginning on page 7).

 

The Committee is responsible for overseeing all of the Company’s compensation programs, including general employee and Board of Director compensation. This CD&A describes how the Committee approached and fulfilled that responsibility in fiscal 2008 with respect to our named executive officers, or NEOs. For fiscal 2008, our NEOs who remained executive officers of Symantec at the end of the year were:

 

 

 

We refer to the five executives above in some cases as our “continuing named executive officers, or NEOs.” In addition, consistent with SEC rules and regulations, our named executive officers for fiscal 2008 include the following two individuals who were no longer serving as executive officers as of the end of the year:

 

 

The independent directors of the Board evaluate the CEO’s performance and the Committee then reviews and recommends to the independent members of the Board all compensation arrangements for the CEO. After discussion, the independent members of the Board approve the CEO’s compensation. The Committee also discusses the performance of the other named executive officers with the CEO, reviews the compensation recommendations that the CEO submits for the other named executive officers, makes any appropriate adjustments, and approves their compensation.

 

The Committee retains Mercer, an outside consulting firm, to provide advice and ongoing recommendations on executive compensation matters. Mercer provides the Committee with advice on executive and general compensation matters, and the Compensation Committee oversees Mercer’s engagement. Mercer representatives meet informally with the Committee Chair and the Chief Human Resources Officer and formally with the Committee during the Committee’s regular meetings, including from time to time in executive sessions without any members of management present. We have worked with Mercer since fiscal 2004, and paid them approximately $220,000 for their services with respect to fiscal 2008.

 

The Committee establishes our compensation philosophy and approves our compensation programs and solicits input and advice from several of our executive officers and Mercer. As mentioned above, our CEO provides the Board and Committee with feedback on the performance of our executive officers and makes compensation recommendations for the executives to the Committee for their approval. Our CEO, CFO, Chief Human Resources Officer, and Vice President, Legal, regularly attend the Committee’s meetings to provide: their perspectives on competition in the industry, the needs of the business, information regarding the Company’s performance, and other advice specific to their areas of expertise. In addition, at the Committee’s direction, Mercer works with our Chief Human Resources Officer and other members of management to obtain information necessary for Mercer to make their own recommendations as well as to evaluate management’s recommendations.

 

FACTORS WE CONSIDER IN DETERMINING OUR COMPENSATION PROGRAMS

 

We apply a number of compensation policies and analytic tools in implementing our compensation principles. These policies and tools guide the Committee in determining the mix and value of the compensation components for our named executive officers. They include:

 

A Total Rewards Approach:  Elements of the total rewards offered to our executive officers include base salary, short- and long-term incentives including equity awards, health benefits, a deferred compensation program, and a consistent focus on individual professional growth and opportunities for new challenges.

 

In determining the mix of these components and the value of each component, the Committee takes into account the executive’s role, the competitive market, individual and Company performance, business unit performance (where applicable), internal pay equity and historical compensation. Details of the various programs and how they support the overall business strategy are outlined in “Compensation Components.” In making its determinations with regard to compensation, the Committee reviews the various compensation elements for the CEO and the other named executive officers (including base salary, target annual bonus, target and accrued award payments under the Long Term Incentive Plans, and the value of all vested and unvested equity awards).

 

Focus on Pay-for-Performance:  Our executive compensation program is designed to reward executives for results. As described below, the pay mix for named executive officers emphasizes variable pay in the form of short-

and long-term cash and equity awards. Short-term results are measured by annual financial performance, specifically revenue, earnings per share and, for our business unit leaders, business unit performance. Long-term results are measured by (a) share price appreciation, and (b) achievement of operating cash flow targets.

 

Appropriate Market Positioning:  Our current policy is to target the base salary and annual short-term cash incentive structure for named executive officers at the 65th percentile of the relevant market composite, as described below, with target long-term incentive opportunities and benefits for named executive officers at the 50th percentile of the relevant market composite. Base salary and short-term cash incentives are positioned at the 65th percentile in order to attract and retain high caliber talent in the highly competitive technology market. The 50th percentile target long-term incentive strategy allows us to be competitive in the market, while providing alignment with stockholders and significant upside through strong performance. As described below, the pay mix for executives emphasizes long-term performance through a majority of pay opportunity coming in the form of long-term award vehicles. By using these targets, we believe that upside opportunity in the short- and long-term incentive plans is available with outstanding financial performance, while keeping our burn rate and dilution, as discussed in more detail below, within a range that we deem acceptable. The Committee may set the actual components for an individual named executive officer above or below the positioning benchmark based on factors such as experience, performance achieved, specific skills or competencies, the desired pay mix (e.g., emphasizing short- or long-term results), and our budget.

 

Competitive Market Assessments:  Market competitiveness is one factor that the Committee considers each year in determining an individual named executive officer’s salary, incentive opportunity, long-term equity awards and pay mix. The Committee relies on various data sources to evaluate the market competitiveness of each pay element, including publicly-disclosed data from a peer group of companies (see discussion below) and published survey data from a broader set of information technology companies that are similar in size to Symantec and that the Committee and its advisors, including Mercer, believe represent Symantec’s competition in the broader talent market. The peer group’s proxy statements provide detailed pay data for the top five positions. Survey data provides compensation information from a broader group of information technology companies, with positions matched based on specific job scope and responsibilities. The Committee considers data from these sources in developing a market composite which it uses as a framework for making compensation decisions for each named executive officer’s position.

 

Peer Group:  Symantec is a prominent participant in the information technology industry. This industry is characterized by rapid rates of change, intense competition from small and large companies, and significant cross-over in leadership talent needs. As such, we compete for executive talent with leading software and services companies as well as in the broad information technology industry. Further, because we believe that stockholders measure our performance against a wide array of technology peers, the Committee uses a peer group that consists of a broader group of high technology companies in different market segments but of a comparable size to us. The Committee uses the peer group, as well as other relevant market data, to develop a market composite for purposes of establishing named executive officer pay levels (as described above). In addition, the peer group performance is used as input for setting performance targets for our annual incentive plan.

 

For fiscal 2008, the Committee, based on the advice of Mercer, included the following companies in the peer group: Adobe Systems, Analog Devices, Apple, Cisco Systems, Computer Associates, Electronic Arts, EMC, Freescale Semiconductor, Harris Interactive, Juniper Networks, Lexmark, Network Appliance, Oracle, Qualcomm, Seagate Technology, and Yahoo!

 

Appropriate Pay Mix:  The percentage of an executive officer’s compensation opportunity that is at-risk or variable instead of fixed is based primarily on the officer’s level of influence at Symantec. Executive officers generally have a greater portion of their pay at risk through short- and long-term incentive programs than the rest of our employee population because of their relatively greater responsibility and ability to influence the Company’s performance. This is achieved by having higher target short-term incentive opportunities and higher equity grant levels relative to base salary than employees who are not senior executives.

 

Form and Mix of Long-Term Equity Incentive Compensation:  We currently use two forms of equity for long-term equity incentive compensation: stock options and restricted stock units (RSUs). (See “Equity Incentive Awards” below for more information regarding the specific features of each form). Starting in fiscal 2007, we

increased the proportion of RSUs granted to senior executives relative to options. For fiscal 2008, named executive officers who received equity incentive compensation awards generally received approximately 50% of the value of such compensation in the form of RSUs and 50% in stock options. (See further discussion below under “Equity Incentive Awards”.) These percentages (and other percentage-based equity awards value discussed below) are based on the grant date fair value of the shares of common stock underlying the RSUs and the grant date fair value of the options using the Black-Scholes option pricing method. The awards made to named executive officers other than the CEO are determined by the Committee after seeing recommendations made by the CEO. In determining its recommendations to the independent directors of the Board, in the case of CEO compensation, and in making compensation decisions with respect to other NEOs, the Committee may consider factors such as the individual’s tenure at the Company, industry experience, current pay mix, long-term equity and cash awards previously granted to the individual, retention considerations, business unit performance (as applicable), individual performance, and other factors.

 

COMPENSATION COMPONENTS

 

Compensation for our named executive officers includes the following components:

 

Base Salary

 

The annual base salary for our named executive officers is our primary form of fixed (not at-risk) compensation. The Committee reviews named executive officers’ salaries annually as part of its overall competitive market assessment and may make adjustments based on positioning relative to market, individual role and contribution levels, and our overall salary budget. The Committee reviews the CEO’s salary in executive session (i.e., without any executives present), and changes are considered in light of market pay assessments and the Committee’s annual CEO performance evaluation. In setting the base salaries for the other named executive officers, the Committee also considers the recommendations of the CEO based upon his annual review of their performance.

 

With respect to fiscal 2008, the Committee did not increase the salaries of the named executive officers, except that upon his promotion to Chief Operating Officer in January 2008, Mr. Salem’s salary was increased by $150,000 to bring his salary within the competitive range for such position. Specific information regarding fiscal 2008 salary amounts is contained in the Summary Compensation Table beginning on page 54. Our chief executive officer requested for the fourth consecutive year that the Committee not increase his base salary for fiscal 2009 and the Committee decided not to increase the base salaries of the Company’s other named executive officers for fiscal 2009.

 

Executive Annual Incentive Plans

 

The Executive Annual Incentive Plans for our executive officers are adopted pursuant to the Senior Executive Incentive Plan (SEIP) approved by our stockholders in 2003. We are seeking stockholder approval of certain material terms of the SEIP as required under applicable tax rules so that amounts paid under future SEIP awards may be fully deductible (see Proposal No. 4). The Executive Annual Incentive Plans adopted under the SEIP are annual cash incentive plans that reward named executive officers (and other participants) for generating strong financial results for our Company in the short term. To support collaboration within the senior leadership, all named executive officers earn incentive compensation based on performance against pre-determined corporate goals described further below. The Committee may choose to measure the named executive officers’ achievement against specific business unit or individual performance targets as well.

 

Executive Annual Incentive Plan Target Opportunities:  Under the Executive Annual Incentive Plans for a given fiscal year, each named executive officer has an award opportunity, expressed as a percentage of base salary with threshold and target levels. The Committee uses peer group and survey data as input in determining the target bonus levels for our Executive Annual Incentive Plans. In addition, the award opportunities for fiscal 2008 were determined based on a market composite, the desired pay mix, internal pay equity goals, and the role of the named executive officer. For fiscal 2008, the target opportunity for the CEO was 125% of his base salary and 80% of base salary for the other named executive officers. Each named executive officer must achieve threshold performance for each metric established in the named executive officer’s executive annual incentive plan in order to receive payment

for such metric. To motivate participants to drive for superior performance, the award opportunity is otherwise uncapped in amount, in that overachievement of performance goals can result in payments in excess of target, although the Executive Annual Incentive Plan has an overall cap of $5 million that any single named executive officer may be paid for a single fiscal year.

 

Executive Annual Incentive Plan Performance Measures and Target Setting:  Executive Annual Incentive Plan performance targets are established on or about the beginning of each plan year. Our management develops proposed goals with reference to a variety of factors, including our historical performance, internal budgets, market and peer performance, and external expectations for our performance. The Committee reviews, adjusts as necessary, and approves the goals, the range of performance, and the weighting of the goals. Following the end of each fiscal year, the Committee reviews our actual performance against the performance measures established in the fiscal year’s Executive Annual Incentive Plans (after making any appropriate adjustments to such measures to account for corporate events such as acquisitions or other actions that may affect the achievement of such measures), determines the extent of achievement and approves annual cash incentives, if warranted. The determination of named executive officer incentives is formulaic, though the Committee has the discretion to reduce awards. It did not exercise such discretion for fiscal 2008.

 

The performance measures in the Fiscal Year 2008 Executive Annual Incentive Plans for the named executive officers were non-GAAP earnings per share (EPS) and revenue achievement which, for our CEO, CFO and COO, were weighted equally. For our Group Presidents who are responsible for a business unit, in addition to revenue and EPS metrics, the FY08 Executive Annual Incentive Plans also included business unit contribution margin as a performance metric. For this group, the business unit contribution performance metric had a 30% weighting, with the revenue and EPS metrics equally weighted at 35%. The incentive plans for Messrs. Kendra and Butterfield and Ms. Chaffin included the business contribution weighting as set forth above. Mr. Hughes became our Chief Strategy Officer in January 2008 after serving as Group President, Global Services for the first three quarters of fiscal 2008. As a result, the incentive plan for Mr. Hughes included the business unit contribution performance metric for the Services segment for the first three quarters of the year and did not include such metric for the fourth quarter. In addition, Mr. Butterfield became our Interim Group President, Data Center Management Group in November 2007, in addition to his role as our Group President, Altiris segment; however, Mr. Butterfield’s bonus opportunity under the incentive plan was not adjusted to take into account these additional responsibilities.

 

We used the above performance metrics because:

 

 

For each performance metric, the Committee established a threshold and target performance level that represents 50% and 100% of target funding levels, respectively. If results for a goal are below threshold, the funding level for that goal is 0%, and participants will be paid no incentive for that goal. At target, the goal is funded 100%. Above target, the payout for revenue achievement increases by 10% of the target opportunity for each additional 1% above target revenue achievement levels. Results above target EPS provided an additional 10% payout for each approximate increment of $0.023 in EPS for fiscal 2008.

 

Fiscal Year 2008 Results

 

For fiscal 2008, our non-GAAP revenue target was $5.896 billion and our non-GAAP EPS target was $1.20 per share. The Company performed at 100.7% of the revenue goal ($5.937 billion), resulting in a payout for that portion of the plan at 100% of the plan target amount, and performed at 106.2% of the EPS goal ($1.27 per share), resulting in a payout for that portion of the plan at 130% of the plan target amount. These levels of achievement compare to our

reported increases in non-GAAP revenue and non-GAAP EPS of approximately 13% and 26%, respectively, from fiscal 2007 to fiscal 2008. As business cycles shifted during fiscal 2008, business unit performance experienced more volatility in contribution margin results compared to targeted levels. The Company does not intend to disclose the specific targets for the business unit contribution margin, as its segment-level business plan is highly confidential. Disclosing specific business unit-level objectives would provide competitors and third parties with insights into the Company’s internal planning processes which might allow our competitors to predict certain business strategies and cause us competitive harm. The amounts paid out with respect to the business unit metrics, as a percentage of the target payout amounts, were as follows: Consumer Products segment, 45%; Data Center Management segment, 200%; Security and Compliance segment, 80%; Altiris segment, 95%; and Services segment, 200%. The Committee believed when it established these business unit performance metrics under the fiscal 2008 Annual Incentive Plans that while actual results were uncertain it was reasonably likely that the Company would achieve at or close to the target goals.

 

For our CEO, CFO and COO, the metric achievements for FY08 described above resulted in a payout of 115% of the officer’s respective target bonus amount; and for Mr. Hughes, Ms. Chaffin, Mr. Butterfield and Mr. Kendra, this achievement resulted in a 134%, 94%, 95% and 105% payout against target bonus amount, respectively (in each case, amounts paid are reflected in the Summary Compensation Table beginning on page 54).

 

Long Term Incentive Plans (LTIP)

 

In May 2007, the Committee approved our FY08 LTIP, which became effective on April 1, 2007. Under the terms of the FY08 LTIP, executives are eligible to receive performance-based compensation based upon the level of attainment of target operating cash flow through the Company’s fiscal year ending March 31, 2008. The FY08 LTIP was adopted pursuant to the SEIP approved by our stockholders in 2003. We are seeking stockholder approval of certain material terms of the SEIP as required under applicable tax rules so that amounts paid under future SEIP awards may be fully deductible (see Proposal No. 4).

 

As we currently operate the SEIP, the long-term incentive metric is measured at the end of the performance period (i.e., the end of fiscal 2008) and, subject to satisfaction of continuing service requirements, will be paid following the last day of the second fiscal year following the end of the performance period (i.e., the end of fiscal 2010). By basing the LTIP payout on operating cash flow, the plan focuses on a specific, measurable corporate goal that is aligned with generating stockholder value, and provides performance-based compensation based upon the actual achievement of the goal. We believe that the exclusive metric of operating cash flow, as opposed to revenue or EPS, will appropriately focus our executives on tangible cost reduction opportunities that are not subject to some of the timing issues associated with the accounting rules relating to revenues and net income, which can lead to fluctuations in results that are not necessarily directly tied to our business success. Our CEO declined participation in the FY08 LTIP. For our continuing named executive officers who participated in the FY08 LTIP, the target LTIP awards represented the following percentages of then-current base salary: Messrs. Salem and Hughes, 95%; Mr. Beer, 68%; and Ms. Chaffin, 100%. A participant is eligible for 25% of the target LTIP award if at least 85% of budgeted operating cash flow is attained with respect to the performance period and for up to 200% of the target LTIP award if at least 120% of budgeted operating cash flow is attained with respect to the performance period. A participant must be an employee of the Company on the payment date to receive the payment. Subject to certain exceptions, a participant who terminates his or her employment with the Company before the payment date will not be eligible to receive the payment or any prorated portion thereof. The Committee implemented the FY08 LTIP in order to provide an ongoing retention and performance incentive by balancing option and RSU vesting periods (four and two years respectively) with another component which will enhance retention of senior managers.

 

For FY08, our operating cash flow target was $1.789 billion and we achieved 102.4% of our target ($1.832 billion), resulting in payouts of 105% of target bonus amounts for our continuing named executive officers who remain our employees as of the end of fiscal 2010. Accordingly, Messrs. Salem, Beer and Hughes and Ms. Chaffin will each receive a payout of $472,500 if they remain employed by us on such date. This level of achievement against target compares to our reported increase in cash flow from operations of approximately 9% from fiscal 2007 to fiscal 2008. Messrs. Kendra and Butterfield will not receive any payouts under the FY08 LTIP because they will not be employees of Symantec on the payout date.

Equity Incentive Awards

 

The primary purpose of our equity incentive awards is to align the interests of the named executive officers with those of the stockholders by rewarding the named executive officers for creating stockholder value over the long-term. By compensating our executives with the Company’s equity, our executives hold a stake in the Company’s financial future. The gains realized in the long term depend on our executives’ ability to drive the financial performance of the Company. Equity incentive awards are also a useful vehicle for attracting and retaining executive talent in our competitive talent market.

 

Our 2004 Equity Incentive Plan provides for the award of stock options, stock appreciation rights, restricted stock, and restricted stock units. We granted named executive officers stock options and restricted stock units (RSUs) in fiscal 2008 (as described in more detail below). The Company offers all employees the opportunity to participate in an Employee Stock Purchase Plan which allows for purchase of stock at a discount to market through a payroll deduction process. This plan is designed to comply with Internal Revenue Code Section 423. During fiscal 2008, three named executive officers participated in our Employee Stock Purchase Plan.

 

We are currently seeking approval of our stockholders of an amendment and restatement of our 2004 Equity Incentive Plan (see Proposal No. 2 above) and adoption of a new Employee Stock Purchase Plan designed to qualify under Code Section 423 (see Proposal No. 3 above). We believe it is important to continue both of these equity compensation programs, as more fully discussed in the respective Proposals in this Proxy Statement.

 

We seek to provide equity incentive awards which are competitive with companies in our peer group and the other information technology companies that the Committee includes in its market composite. As such, we establish target equity incentive award grant guideline levels for the named executive officers based on market pay assessments. When making annual equity awards to named executive officers, we consider corporate results during the past year, the role, responsibility and performance of the individual named executive officer, the competitive market assessment described above, prior equity awards, and the level of vested and unvested equity awards then held by each participating officer. In making equity awards, we also generally take into consideration gains recognizable by the executive from equity awards made in prior years. Mercer provides the Committee with market data on these matters, as well as providing to the Committee summaries of the prior grants made to the individual named executive officers.

 

For fiscal 2008, approximately 50% of the named executive officers’ equity incentive award value was granted in the form of RSUs and approximately 50% in the form of stock options (except for the grants in fiscal 2008 to Mr. Salem, as noted below in “Equity Grant Practices,” which were somewhat more heavily weighted towards stock options).

 

On April 25, 2006, the Committee approved an equity grant for the CEO of options to acquire 400,000 shares of common stock and 100,000 RSUs. On May 1, 2007, the Committee approved an equity grant for the CEO of options to acquire 225,000 shares of common stock and 65,000 RSUs. Mr. Thompson declined each of these equity grants in full and indicated to the Committee that he believed previous stock option grants made to him by the Committee were sufficient to achieve the Committee’s objectives of retaining him, aligning his financial interests with those of stockholders, and focusing him on improving the Company’s overall financial results. On April 29, 2008, the Committee approved, and Mr. Thompson accepted, an equity grant of options to purchase 380,000 shares and 115,000 RSUs.

 

Burn Rate and Dilution:  We closely manage how we use our equity to compensate employees. We think of “gross burn rate” as the total number of shares granted under all of our equity incentive plans during a period divided by the average number of shares of common stock outstanding during that period and expressed as a percentage. We think of “net burn rate” as the total number of shares granted under all of our equity incentive plans during a period, minus the total number of shares returned to such plans through awards cancelled during that period, divided by the average number of shares of common stock outstanding during that period, and expressed as a percentage. “Overhang” we think of as the total number of shares underlying options and awards outstanding plus shares available for issuance under all of our equity incentive plans at the end of a period divided by the average number of shares of common stock outstanding during that period and expressed as a percentage. For purposes of these calculations, each full-value award grant (i.e., RSU) is treated as the equivalent of the grant of two options in order

to recognize the economic difference in the equity vehicle types. Our annual gross and net burn rates have been under 3% since fiscal 2005. The Committee targets an annual gross burn rate of approximately 3% to allow for effective attraction, retention and motivation of senior management and the broader employee base, while staying within parameters acceptable to stockholders. The Committee determines the percentage of equity to be made available for our equity programs with reference to the companies in our market composite. In addition, the Committee considers the accounting costs that will be reflected in our financial statements when establishing the forms of equity to be granted and the size of the overall pool available. For fiscal 2008, our gross burn rate was 2.52%, our net burn rate was 1.93%, and our overhang was 16.3%.

 

Stock Options:  Options provide an incentive for executives to drive long-term share price appreciation through the development and execution of effective long-term strategies. Stock option value is only realized if the trading price of our common stock increases, and option holder interests are therefore aligned with stockholder interests. Stock options are issued with exercise prices at 100% of the grant-date fair market value to assure that executives will receive a benefit only when the trading price increases. Option awards generally have value for the executive only if the executive remains employed for the period required for the shares to vest. Options granted in fiscal 2008 vest 25% after the first year and on a monthly basis thereafter for the next 36 months, and, if not exercised, expire in a maximum of seven years (or earlier in the case of termination of employment). Vesting options over four years provides retention value, and is in line with market practices among companies in our market composite and other option recipients within the Company. (Details of stock options granted to the named executive officers in fiscal 2008 are disclosed in the Grants of Plan-Based Awards table included on page 56.)

 

Restricted Stock Units (RSUs):  RSUs represent the right to receive one share of Symantec common stock for each RSU upon the settlement date, which is the date on which certain conditions, such as continued employment with us for a pre-determined length of time, are satisfied. Starting in fiscal 2007, we elected to substitute a significant percentage of the named executive officers’ equity incentive award value, which had historically been provided with only stock options, with RSUs. This change was made to enhance the retention of named executive officers and balance the more volatile rewards associated with stock options. The Committee believes that RSUs align the interests of the named executive officers with the interests of the stockholders because the value of these awards appreciate if the trading price of our common stock appreciates, and also have retention value even during periods in which our trading price does not appreciate, which supports continuity in the senior management team.

 

Shares of our stock are issued to RSU holders as the awards vest. The vesting schedule for RSUs granted to our named executive officers in fiscal 2008 (other than the promotional grant of 30,000 RSUs to Mr. Salem in February 2008, which include a four-year vesting schedule) provided that 50% of the awards vests after the first year and 50% after the second year. The vesting schedule for the RSUs was intended to complement the four-year vesting period that applies to stock options and the three-year performance cycle for the LTIP awards described below. The combination of these three components provides an ongoing retention and performance incentive for our senior management. (Details of RSUs granted to the named executive officers in fiscal 2008 are disclosed in the Grants of Plan-Based Awards table on page 56.)

 

Equity Grant Practices:  The Committee generally approves grants to the named executive officers at its first meeting of each fiscal year. The grant date for all stock options granted to employees, including the named executive officers, is the 10th day of the month following the meeting (or the business day closest to such day if such day is not a business day). The exercise price for stock options is the closing price of our common stock, as reported on the Nasdaq Global Select Market, on the date of grant. The Committee does not coordinate the timing of equity awards with the release of material nonpublic information. The Committee may approve grants to named executive officers at other times during the year, in which case, the grant date is the 10th day of the month following the date on which the Committee approves the grant and the exercise price of any options so granted is the closing price on the grant date. RSUs may be granted from time to time throughout the year, but all RSUs generally vest on either June 1 or December 1 for administrative reasons. In connection with his promotion to our Chief Operating Officer in January 2008, the Committee at a regular meeting granted Mr. Salem in February 2008 30,000 RSUs which vest in four equal annual installments concluding in March 2012 and 100,000 stock options with a standard four-year vesting schedule.

Change of Control and Severance Arrangements:  The vesting of certain stock options and RSUs held by our named executive officers will accelerate if they experience an involuntary (including constructive) termination of employment under certain circumstances, as described further under “Potential Payments Upon Termination or Change in Control,” beginning on page 60.

 

Retention and Other Awards

 

Certain business conditions may warrant using additional compensation approaches to attract, retain or motivate executives. Such conditions include acquisitions and divestitures, attracting or retaining specific or unique talent, and recognition for exceptional contributions. In these situations, the Committee considers the business needs and the potential costs and benefits of special rewards. For example, the Committee approved promotional grants of options and RSUs to Mr. Salem upon his January 2008 promotion to Chief Operating Officer, and approved a sign-on bonus for Mr. Beer pursuant to his offer letter with Symantec in February 2006.

 

Other Benefits

 

All named executive officers are eligible to participate in our 401(k) plan (which includes our matching contributions), health and dental coverage, life insurance, disability insurance, paid time off, and paid holidays on the same terms as are available to all employees generally. These rewards are designed to be competitive with overall market practices, and are in place to attract and retain the talent needed in the business. In addition, selected officers may be eligible to participate in the deferred compensation plan, and to receive other benefits described below.

 

Deferred Compensation:  Symantec’s named executive officers are eligible to participate in a nonqualified deferral plan. The deferral plan provides the opportunity to defer up to 75% of base salary and 100% of cash bonuses for payment at a future date. This plan is provided to be competitive in the executive talent market, and to provide executives with a tax-efficient alternative for receiving earnings. None of the named executive officers currently participate in this plan.

 

Additional Benefits:  Other benefits available to named executive officers are Company-paid life insurance, reimbursement for up to $10,000 for financial planning services and an allowance for personal travel for the CEO on Company aircraft. The Committee believes that these perquisites allow the named executive officers to focus more of their time and attention on their employment, which benefits the Company, and that they are provided in the marketplace for executive talent. The value of the perquisites we provide are taxable to the named executive officers and the incremental cost to us for providing these perquisites is reflected in the Summary Compensation Table. (These benefits are disclosed in the All Other Compensation column of the Summary Compensation Table on page 54).

 

Change in Control Agreements:  Our Executive Retention Plan provides participants with accelerated vesting of equity awards in the event the individual’s employment is terminated without cause, or is constructively terminated, within 12 months of a change in control of the Company (as defined in the plan). The intent of the plan is to enable named executive officers to have a balanced perspective in making overall business decisions in the context of a potential acquisition of the Company, as well as to be competitive with market practices. The Committee believes that change in control benefits, if structured appropriately, serve to minimize the distraction caused by a potential transaction and reduce the risk that key talent would leave the Company before a transaction closes. We do not provide for gross-ups of excise tax values under Section 4999 of the Internal Revenue Code. Rather, we allow the named executive officer to reduce the benefit received or defer the accelerated vesting of options to avoid excess payment penalties. Details of each individual named executive officer’s benefits, including estimates of amounts payable in specified circumstances, are disclosed under “Potential Payments Upon Termination or Change in Control” beginning on page 60 below.

SUPPLEMENTARY POLICIES AND CONSIDERATIONS

 

We use several additional policies to ensure that the overall compensation structure is responsive to stockholder interests and competitive with the market. Specific policies include:

 

Stock Ownership Requirements

 

To ensure that our executive management team’s interests are aligned with our stockholders, we instituted stock ownership requirements in October 2005. Minimum ownership levels are based on the executive’s salary grade:

 

 

Each person holding one of the positions listed above is required to acquire and thereafter maintain the stock ownership required within four years of becoming an executive of the Company (or four years following the adoption date of these guidelines).

 

Stock options and unvested restricted stock or restricted stock units do not count toward stock ownership requirements. Until an executive meets the applicable stock ownership requirement, the executive is encouraged to retain a percentage of any shares received as a result of the exercise of any stock option or other equity award, net of the applicable exercise price and tax withholdings.

 

As of July 4, 2008, John W. Thompson, Enrique T. Salem, Gregory W. Hughes and Janice Chaffin had reached the stated ownership requirements. James A. Beer has yet to reach the required ownership level, but is within the four-year window since his commencement of employment in February 2006. See the table below for individual ownership levels relative to the executive’s ownership requirement.

 

 

Certain Other Securities Matters

 

Our Insider Trading Policy provides that no director or executive officer may maintain a margin arrangement involving Symantec’s securities while in possession of material non-public information about Symantec, engage in any short sale transaction involving Symantec’s securities or purchase or write any put or call option involving Symantec’s securities.

 

In addition, our Insider Trading Policy requires that our Chief Executive Officer, Chief Financial Officer, and each of our directors conduct open market transactions in our securities only through use of stock trading plans adopted pursuant to Rule 10b5-1 of the Securities Exchange Act of 1934. Rule 10b5-1 allows insiders to sell and diversify their holdings in our stock over a designated period by adopting pre-arranged stock trading plans at a time when they are not aware of material nonpublic information about us, and thereafter sell shares of our common stock in accordance with the terms of their stock trading plans without regard to whether or not they are in possession of material nonpublic information about the Company at the time of the sale. All other executives are strongly encouraged to trade using 10b5-1 plans.

 

Tax and Accounting Considerations on Compensation

 

The financial reporting and income tax consequences to the Company of individual compensation elements are important considerations for the Committee when it reviews compensation practices and makes compensation decisions.

While structuring compensation programs that result in more favorable tax and financial reporting treatment is a general principle, the Committee balances these goals with other business needs that may be inconsistent with obtaining the most favorable tax and accounting treatment for each component of its compensation.

 

Deductibility by Symantec.  Under Section 162(m) of the Internal Revenue Code, we may not receive a federal income tax deduction for compensation that is not performance-based (as defined in the Section 162(m) rules) paid to the Chief Executive Officer and the next three most highly compensated executive officers to the extent that any of these persons receives more than $1,000,000 in nonperformance-based compensation in any one year. While the Committee considers the Company’s ability to deduct compensation amounts paid or to be paid to its executive officers in determining appropriate levels or manner of compensation, it may from time to time approve additional amounts of compensation that are not fully deductible under Section 162(m).

 

Salaries for officers do not qualify as performance-based compensation; however, as no officer received salary in excess of $1,000,000 during fiscal 2008, the entire amount of salaries paid to our named executive officers is deductible. We believe that all of the stock options granted to the executive officers under our 1996 Equity Incentive Plan and 2004 Equity Incentive Plan qualify under Section 162(m) as performance-based compensation and that all amounts of compensation related to options held by our executive officers should be fully deductible. Our RSU grants vest on a time-based vesting schedule and therefore are not considered performance-based under the Section 162(m) rules. Accordingly, amounts of compensation related to RSUs held by our executive officers may not be fully deductible (depending upon the value of our stock, and the amount of other nonperformance-based compensation an officer has during the year in which any portion of an RSU vests).

 

Tax Implications for Officers.  Section 409A of the Internal Revenue Code imposes additional income taxes on executive officers for certain types of deferred compensation that do not comply with Section 409A. The Company attempts in good faith to structure compensation so that it either conforms with the requirements of or qualifies for an exception under Code Section 409A. Section 280G of the Internal Revenue Code imposes an excise tax on payments to executives of severance or change of control compensation that exceed the levels specified in the Section 280G rules. Our named executive officers could receive the amounts shown in the section entitled “Potential Payments Upon Termination or Change in Control” (beginning on page 60 below) as severance or change of control payments that could implicate this excise tax. As mentioned above, we do not offer our officers as part of their change of control benefits any gross ups related to this excise tax under Code Section 4999.

 

Accounting Considerations.  The Compensation Committee also considers the accounting and cash flow implications of various forms of executive compensation. In its financial statements, the Company records salaries and performance-based compensation incentives as expenses in the amount paid, or to be paid, to the named executive officers. Accounting rules also require the Company to record an expense in its financial statements for equity awards, even though equity awards are not paid as cash to employees. The accounting expense of equity awards to employees is calculated in accordance with SFAS 123R. The Compensation Committee believes, however, that the many advantages of equity compensation, as discussed above, more than compensate for the non-cash accounting expense associated with them.

 

The members of Symantec’s Compensation Committee during fiscal year 2008 were Messrs. Schulman, Brown, Coleman and Mahoney and Ms. Laybourne (who was appointed to the Committee in January 2008 following her appointment to our Board). None of the members of Symantec’s Compensation Committee in fiscal year 2008 was at any time during fiscal year 2008 or at any other time an officer or employee of Symantec or any of its subsidiaries, and none had or have any relationships with Symantec that are required to be disclosed under Item 404 of Regulation S-K. None of Symantec’s executive officers has served as a member of the Board, or as a member of the compensation or similar committee, of any entity that has one or more executive officers who served on our Board or Compensation Committee during fiscal year 2008.

 

The information contained in the following report of Symantec’s Compensation Committee is not considered to be “soliciting material,” “filed” or incorporated by reference in any past or future filing by Symantec under the

Securities Exchange Act of 1934 or the Securities Act of 1933 unless and only to the extent that Symantec specifically incorporates it by reference.

 

The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis (“CD&A”) contained in this proxy statement. Based on this review and discussion, the Compensation Committee has recommended to the Board that the CD&A be included in this proxy statement and incorporated into our Annual Report on Form 10-K for the fiscal year ended March 28, 2008.

 

By: The Compensation Committee of the Board of Directors:

 

Michael A. Brown

William T. Coleman

Geraldine B. Laybourne

David L. Mahoney

Daniel H. Schulman (Chair)

 

The following table shows for the fiscal year ended March 28, 2008, compensation awarded to or paid to, or earned by, our Chief Executive Officer, our Chief Financial Officer and the three most highly compensated executive officers who were serving as executive officers (other than as our Chief Executive Officer or Chief Financial Officer) at March 28, 2008 and two additional individuals for whom disclosure would have been required had they continued serving as an executive officer through March 28, 2008 (the “Named Executive Officers”).

 

 

 

 

 

 

The following table shows for the fiscal year ended March 28, 2008, certain information regarding grants of plan-based awards to the Named Executive Officers from our incentive plans:

 

 

 

For a summary of the terms of the FY08 Executive Annual Incentive Plan, see “Compensation Discussion & Analysis (CD&A) — Compensation Components — Executive Annual Incentive Plans” beginning on page 45. For a summary of the terms of the FY08 LTIP, see “Compensation Discussion & Analysis (CD&A) — Compensation Components — Long Term Incentive Plans (LTIP)” beginning on page 47.

The following table shows for the fiscal year ended March 28, 2008, certain information regarding outstanding equity awards at fiscal year end for the Named Executive Officers.