Note 11. Employee Benefits and Stock-Based Compensation

401(k) plan

We maintain a salary deferral 401(k) plan for all of our domestic employees. This plan allows employees to contribute up to 50% of their pretax salary up to the maximum dollar limitation prescribed by the Internal Revenue Code. We match 50% of the employee’s contribution up to the limits specified in the plan. The maximum match in any given plan year is 3% of the employees’ eligible compensation, up to $6,000. Our contribution under the plan was $26 million, $25 million, and $22 million in fiscal 2013, 2012, and 2011, respectively.

Stock purchase plans

2008 Employee Stock Purchase Plan

In September 2008, our stockholders approved the 2008 Employee Stock Purchase Plan (“2008 ESPP”) and reserved 20 million shares of common stock for issuance thereunder. In September 2010, the 2008 ESPP was amended by our stockholders to increase the shares available for issuance thereunder by 20 million. As of March 29, 2013, 18 million shares have been issued under this plan and 22 million shares remained available for future issuance.

Subject to certain limitations, our employees may elect to have 2% to 10% of their compensation withheld through payroll deductions to purchase shares of common stock under the 2008 ESPP. Employees purchase shares of common stock at a price per share equal to 85% of the fair market value on the purchase date at the end of each six-month purchase period.

Stock award plans

2000 Director Equity Incentive Plan

In September 2000, our stockholders approved the 2000 Director Equity Incentive Plan and reserved 50,000 shares of common stock for issuance thereunder. Stockholders increased the number of shares of stock that may be issued by 50,000 in September 2004, September 2007, and October 2011. The purpose of this plan is to provide the members of the board of directors with an opportunity to receive common stock for all or a portion of the retainer payable to each director for serving as a member. Each director may elect any portion up to 100% of the retainer to be paid in the form of stock. As of March 29, 2013, a total of 132,872 shares have been issued under this plan and 67,128 shares remained available for future issuance.

2004 Equity Incentive Plan

Under the 2004 Equity Incentive Plan (“2004 Plan”), our board of directors, or a committee of the board of directors, may grant incentive and nonqualified stock options, stock appreciation rights, RSUs, RSAs, PRUs or PCSUs to employees, officers, directors, consultants, independent contractors, and advisors to us. These may also be issued to any parent, subsidiary, or affiliate of ours. The purpose of the 2004 Plan is to attract, retain, and motivate eligible persons whose present and potential contributions are important to our success by offering them an opportunity to participate in our future performance through equity awards of stock options and stock bonuses. Under the terms of the 2004 Plan, the exercise price of stock options may not be less than 100% of the fair market value on the date of grant. Stock options and RSUs generally vest over a four-year period. Stock options granted prior to October 2005 generally have a maximum term of ten years and options granted thereafter generally have a maximum term of seven years. An important feature of the 2004 Plan is “fungible share pool”. This feature provides for each one share granted as RSU, RSA, PRU, or PCSU to be counted as the issuance of two shares reserved for issuance for the purpose of computing shares remaining available for issuance. Shares subject to stock options or stock appreciation rights reduce the shares available for issuance on a one-for-one basis.

As of March 29, 2013, we have 143 million shares authorized for issuance under the 2004 Plan. These shares include 18 million shares originally reserved for issuance under the 2004 Plan upon its adoption by our stockholders in September 2004, 29 million shares that were transferred to the 2004 Plan from the 1996 Equity Incentive Plan (“1996 Plan”), 40 million, 50 million, and 55 million shares that were approved for issuance thereunder on the amendment and restatement of the 2004 Plan at our 2006, 2008 and 2010 annual meeting of stockholders, respectively, and a reduction of 49 million shares for the fungible share pool adjustment. In addition to the shares currently reserved under the 2004 Plan, any shares reacquired by us from options outstanding under the 1996 Plan upon their cancellation will also be added to the 2004 Plan reserve. As of March 29, 2013, 65 million shares remained available for future issuance.

Other stock option plans

Options remain outstanding under several other stock option plans, including the 1996 Plan, and various plans assumed in connection with acquisitions. No further options may be granted under any of these plans.

Performance-based restricted stock units and performance-contingent stock units

During the first quarters of fiscal 2013 and 2012, we granted PRUs to certain senior level employees under our 2004 Plan. The PRU grants are in lieu of the stock option grants typically awarded as part of our annual compensation program. These PRUs can be earned depending upon the achievement of a company-specific performance condition and a market condition as follows: (1) our achievement of annual target earnings per share for the applicable fiscal year and (2) our two and three-year cumulative relative total shareholder return ranked against that of other companies that are included in the Standard & Poor's 500 Index. These PRUs are also subject to a three-year continued service vesting provision with earlier vesting permitted under certain conditions, such as upon a change of control of the Company. The determination of the fair value of these awards takes into consideration the likelihood of achievement of the market condition.

On July 24, 2012, Enrique Salem, our former President and Chief Executive Officer (“CEO”), resigned from the Company. Our board of directors appointed Stephen M. Bennett as our new President and CEO, effective July 25, 2012. During the second quarter of fiscal 2013, we granted 115,000 PRUs to our new CEO. These PRUs are subject to vesting based on the same terms and conditions as the aforementioned fiscal 2013 PRU grants, except that the target number of shares our CEO will be eligible to receive at the end of the three-year performance period will be not less than 80,000 shares. Additionally, we granted 450,000 PCSUs to our CEO based on the achievement of specified performance metrics. The PCSUs are also subject to an underlying continued service vesting condition. Each performance metric is based on the average twenty day trailing closing price of Symantec’s common stock (the “Average Closing Price”) over a three-year period beginning with the second quarter of fiscal 2013. Upon achievement and ratification by our board of directors, these awards will vest and release for the fiscal quarter when the Average Closing Price first exceeds $18.00, $20.00, and $22.00, respectively. The price thresholds were achieved during fiscal 2013. The weighted-average grant date fair value per share of PCSUs granted was $13.69 per share.

Valuation of stock-based awards

The following assumptions were used to estimate the fair value of stock awards:


	Fiscal 2013	Fiscal 2012	Fiscal 2011
Stock Options:
Expected life	3.5 years	3.8 years	3.5 years
Weighted-average expected volatility	31%	35%	34%
Weighted-average risk-free interest rate	0.52%	1.62%	1.85%
Expected dividends	—	—	—
PRUs and PCSUs:
Expected life	2.6 - 2.9 years	2.8 - 2.9 years
Expected volatility	31% - 32%	48% - 49%
Weighted-average expected volatility	32%	49%
Risk-free interest rate	0.36% - 0.38%	0.65% - 0.90%
Expected dividends	—	—

Stock-based compensation expense

The following table sets forth the total stock-based compensation expense recognized in our Consolidated Statements of Income.


	Year Ended
	March 29, 2013	March 30, 2012	April 1, 2011
	(In millions, except per share data)
Cost of revenue	$ 15	$ 16	$ 22
Sales and marketing	67	70	58
Research and development	50	49	40
General and administrative	32	29	25
Total stock-based compensation expense	164	164	145
Tax benefit associated with stock-based compensation expense	(48)	(46)	(41)
Net stock-based compensation expense	$ 116	$ 118	$ 104
Net stock-based compensation expense per share attributable to Symantec Corporation stockholders— basic	$ 0.17	$ 0.16	$ 0.13
Net stock-based compensation expense per share attributable to Symantec Corporation stockholders— diluted	$ 0.16	$ 0.16	$ 0.13

Stock options activity


	Number of Shares	Weighted-Average Exercise Price	Weighted-Average Remaining Years	Aggregate Intrinsic Value ⁽¹⁾
	(In millions, except per share and years data)
Outstanding at March 30, 2012	41	$ 18.98
Granted	—	—
Exercised	(13)	16.10
Forfeited	(1)	15.74
Expired	(9)	21.97
Outstanding at March 29, 2013	18	$ 19.86	2.0	$ 102
Exercisable at March 29, 2013	16	$ 20.41	1.6	$ 82
Vested and expected to vest at March 29, 2013	18	$ 19.90	1.9	$ 101

____________

⁽¹⁾

Intrinsic value is calculated as the difference between the market value of our common stock as of the last trading day of the fiscal year and the exercise price of the option. The aggregate intrinsic value of options outstanding and exercisable includes options with an exercise price below $24.68, the closing price of our common stock on the last trading day of the fiscal year, as reported by the NASDAQ Global Select Market.

The weighted-average fair value per share of options granted during fiscal 2013, 2012, and 2011 including assumed options was $4.07, $5.23, and $4.04, respectively. The total intrinsic value of options exercised during fiscal 2013, 2012, and 2011 was $64 million, $40 million, and $43 million, respectively.

As of March 29, 2013, total unrecognized compensation cost adjusted for estimated forfeitures related to unvested stock options was $14 million, which is expected to be recognized over the remaining weighted-average vesting period of 1.8 years.

Restricted stock activity


	Number of Shares	Weighted-Average Grant Date Fair Value	Weighted-Average Remaining Years	Aggregate Intrinsic Value
	(In millions, except per share and years data)
Outstanding and unvested at March 30, 2012	18	$ 16.62
Granted	11	15.74
Vested and released	(6)	16.28
Forfeited	(4)	16.34
Outstanding and unvested at March 29, 2013	19	$ 16.25	1.5	$ 472
Expected to vest at March 29, 2013	16		1.4	$ 406

The weighted-average grant date fair value per share of restricted stock granted during fiscal 2013, 2012, and 2011, including assumed restricted stock was $15.74, $18.13, and $14.96, respectively. The total fair value of restricted stock that vested and released in fiscal 2013, 2012, and 2011 was $124 million, $150 million, and $104 million, respectively.

As of March 29, 2013, total unrecognized compensation cost adjusted for estimated forfeitures related restricted stock was $223 million, which is expected to be recognized over the remaining weighted-average vesting period of 2.5 years.

Performance-based restricted stock units activity


	Number of Shares
Unvested at March 30, 2012	490,350
Granted	1,373,233
Incremental grants due to performance and market conditions	536,316
Vested and released	—
Issued	(103,195)
Forfeited	(563,948)
Unvested at March 29, 2013	1,732,756

The weighted-average grant date fair value per share of PRUs granted during fiscal 2013 and 2012 was $16.97 and $23.58, respectively. The total fair value of PRUs that were issued in fiscal 2013 was $2 million.

As of March 29, 2013, total unrecognized compensation cost related to the PRUs was approximately $14 million, which is expected to be recognized over the remaining weighted average period of 1.8 years.

Shares reserved

As of March 29, 2013, we had reserved the following shares of authorized but unissued common stock (in millions):


Stock purchase plans	22
Stock award plans	104
Total	126