e424b2
The
information in this preliminary prospectus supplement and
accompanying prospectus is not complete and may be changed. A
registration statement relating to these securities has been
filed with the Securities and Exchange Commission and is
effective. This preliminary prospectus supplement and
accompanying prospectus are not an offer to sell these
securities and we are not soliciting offers to buy these
securities in any jurisdiction where the offer or sale is not
permitted.
|
Filed
pursuant to Rule 424(b)(2)
Registration
No. 333-169330
SUBJECT TO COMPLETION, DATED
SEPTEMBER 13, 2010
PRELIMINARY PROSPECTUS SUPPLEMENT
(To Prospectus dated September 13, 2010)
$
$ %
SENIOR NOTES DUE 20
$ %
SENIOR NOTES DUE 20
We are offering $ aggregate
principal amount of
our % Senior Notes due
20 (the 20 notes) and
$ aggregate principal amount of
our % Senior Notes due
20 (the 20 notes and,
together with the 20 notes, the
notes).
The 20 notes will bear interest at a rate
of % per annum and the
20 notes will bear interest at a rate
of % per annum . We will pay
interest semi-annually on the notes
on
and of
each year, beginning
on ,
2011. Interest on the notes will accrue from
September , 2010. The 20 notes will
mature
on ,
20 and the 20 notes will mature
on ,
20 .
We may redeem the notes at any time at the redemption prices
set forth under the heading Description of
Notes Optional Redemption in this prospectus
supplement. Upon the occurrence of a change of control
repurchase event, we will be required to make an offer to
repurchase the notes at a price equal to 101% of their principal
amount plus accrued and unpaid interest to, but not including,
the date of repurchase.
The notes will be our senior unsecured obligations and will
rank equally with our other senior unsecured indebtedness. The
notes are not and will not be listed on any securities
exchange.
For a more detailed description of the notes, see
Description of Notes beginning on
page S-21
of this prospectus supplement and Description of Debt
Securities beginning on page 4 of the accompanying
prospectus.
Investing in these securities involves certain risks. See
Risk Factors beginning on
page S-6
of this prospectus supplement.
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Price to
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Underwriting
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Proceeds to Us
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Public(1)
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Discounts
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(Before Expenses)
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Per 20 note
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%
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%
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%
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Per 20 note
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%
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%
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%
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Total
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$
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$
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$
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(1) |
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Plus accrued interest, if any, from the date of issuance. |
The Securities and Exchange Commission and state securities
regulators have not approved or disapproved these securities or
determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
Neither series of notes will be listed on any securities
exchange. Currently, there are no public markets for the
notes.
We expect that delivery of the notes will be made to
investors in registered book-entry form only through the
facilities of The Depository Trust Company
(DTC) for the accounts of its participants,
including Clearstream Banking, S.A. (Clearstream)
and Euroclear Bank, S.A./N.V.(Euroclear), on or
about September , 2010.
Joint
Book-Running Managers
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J.P.
MORGAN |
MORGAN STANLEY |
UBS INVESTMENT BANK |
September , 2010
TABLE OF
CONTENTS
Prospectus
Supplement
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Page
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S-ii
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S-ii
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S-ii
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S-1
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S-6
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S-18
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S-19
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S-20
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S-21
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S-34
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S-37
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S-39
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S-39
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Prospectus
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Page
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2
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2
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2
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3
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3
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4
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4
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4
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4
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12
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13
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13
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ABOUT
THIS PROSPECTUS SUPPLEMENT
You should rely only on the information contained or
incorporated by reference in this prospectus supplement and the
accompanying prospectus. If information in this prospectus
supplement is inconsistent with the accompanying prospectus, you
should rely on the prospectus supplement. We have not, and the
underwriters have not, authorized anyone to provide you with
different information. We are not, and the underwriters are not,
making an offer of these securities in any state where the offer
or sale is not permitted. You should not assume that the
information provided in this prospectus supplement, the
accompanying prospectus or the documents incorporated by
reference in this prospectus supplement and in the accompanying
prospectus is accurate as of any date other than their
respective dates. Our business, financial condition, results of
operations and prospects may have changed since those dates.
You should not consider any information in this prospectus or in
the documents incorporated by reference herein to be investment,
legal or tax advice. You should consult your own counsel,
accountants and other advisors for legal, tax, business,
financial and related advice regarding the purchase of the notes.
WHERE YOU
CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements
and other information with the SEC. Our SEC filings are
available to the public from the SECs web site at
www.sec.gov. You may also read and copy any document we file at
the SECs public reference room in Washington, D.C.
located at 100 F Street, N.E., Room 1580,
Washington, D.C. 20549. You may also obtain copies of any
document we file at prescribed rates by writing to the Public
Reference Section of the Securities Exchange Commission at that
address. Please call the SEC at
1-800-SEC-0330
for further information on the public reference room.
INFORMATION
INCORPORATED BY REFERENCE
The SEC allows us to incorporate by reference in
this prospectus supplement the information in other documents
that we file with it, which means that we can disclose important
information to you by referring you to those documents. The
information incorporated by reference is considered to be a part
of this prospectus supplement, and information in documents that
we file later with the SEC will automatically update and
supersede information contained in documents filed earlier with
the SEC or contained in this prospectus supplement. We
incorporate by reference in this prospectus supplement the
documents listed below and any future filings that we may make
with the SEC under Sections 13(a), 13(c), 14, or 15(d) of
the Securities Exchange Act of 1934, as amended, prior to the
termination of the offering under this prospectus supplement:
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Annual Report on
Form 10-K
for the year ended April 2, 2010 (including those sections
incorporated by reference from our Proxy Statement filed on
July 30, 2010);
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Quarterly Report on
Form 10-Q
for the fiscal quarter ended July 2, 2010; and
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Current Reports on
Form 8-K
filed May 4, 2010, May 24, 2010, May 28, 2010,
July 7, 2010, August 11, 2010, September 7, 2010
and September 13, 2010.
|
To the extent that any information contained in any Current
Report on
Form 8-K,
or any exhibit thereto, was furnished to, rather than filed
with, the SEC, such information or exhibit is specifically not
incorporated by reference in this prospectus supplement.
You may obtain at no cost to you a copy of any or all of the
documents referred to above which may have been or may be
incorporated by reference into this prospectus supplement
(excluding certain exhibits to the documents) by calling
Investor Relations at
(650) 527-5523
or writing us at the following address: Symantec Corporation
Attention: Investor Relations, 350 Ellis Street, Mountain View,
California 94043.
S-ii
SUMMARY
The following summary contains basic information about us and
about this offering. It does not contain all of the information
that is important to an investment in our securities. Before you
make an investment decision you should review this prospectus
supplement, the accompanying prospectus and the documents
incorporated herein and therein in their entirety, including the
risk factors, our financial statements and the related notes
thereto. Unless the context otherwise requires or as otherwise
indicated, as used in this prospectus supplement, the terms
Symantec, Symantec Corporation,
us, our, and we refer to
Symantec Corporation and its subsidiaries.
Symantec
Corporation
Symantec is a global provider of security, storage and systems
management solutions that help businesses and consumers secure
and manage their information. We provide customers worldwide
with software and services that protect, manage and control
information risks related to security, data protection, storage,
compliance, and systems management. We help our customers manage
cost, complexity and compliance by protecting their IT
infrastructure as they seek to maximize value from their IT
investments.
We operate primarily in three diversified markets within the
software sector: security, storage, and systems management. We
believe these markets are converging as customers increasingly
require our help mitigating their risk profiles and managing
their storage needs in order to secure and manage their most
valuable asset information. We have taken a
proactive and policy-driven approach to protecting and managing
information as the tools and processes from these formerly
discrete domains become more integrated.
Founded in 1982, we are incorporated in the State of Delaware.
Our principal executive offices are located at 350 Ellis Street,
Mountain View, California 94043. Our telephone number at that
location is
(650) 527-8000.
We maintain a website at www.symantec.com. The information
contained on our website is not incorporated by reference in
this prospectus supplement or the accompanying prospectus and
you should not consider it a part of this prospectus supplement
or the accompanying prospectus.
S-1
Summary
Consolidated Financial Data
The following summary consolidated financial data should be read
in conjunction with Managements Discussion and
Analysis of Financial Condition and Results of Operations
and the Consolidated Financial Statements included in our Annual
Report on
Form 10-K
for the fiscal year ended April 2, 2010 and our Quarterly
Report on
Form 10-Q
for the fiscal quarter ended July 2, 2010, which are
incorporated by reference in this prospectus supplement and the
accompanying prospectus. The summary consolidated financial data
for the years ended April 2, 2010, April 3, 2009 and
March 28, 2008, and as of April 2, 2010, are derived
from our audited financial statements incorporated by reference
in this prospectus supplement and the accompanying prospectus
from our Annual Report on
Form 10-K
for the fiscal year ended April 2, 2010. The summary
consolidated financial data for the three months ended
July 2, 2010 and July 3, 2009, and as of July 2,
2010, are derived from our unaudited financial statements
incorporated by reference in this prospectus supplement and the
accompanying prospectus from our Quarterly Report on
Form 10-Q
for the fiscal quarter ended July 2, 2010. Historical
results are not necessarily indicative of results to be expected
for future periods and interim results are not necessarily
indicative of results to be expected for the entire fiscal year.
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Year Ended
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Three Months Ended
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April 2,
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April 3,
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March 28,
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July 2,
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July 3,
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2010
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2009
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2008
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2010
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|
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2009
|
|
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(In millions, except net income (loss) per share)
|
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Consolidated Statements of Income Data:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Net revenue:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Content, subscription, and maintenance
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|
$
|
5,034
|
|
|
$
|
4,863
|
|
|
$
|
4,561
|
|
|
$
|
1,248
|
|
|
$
|
1,209
|
|
License
|
|
|
951
|
|
|
|
1,287
|
|
|
|
1,313
|
|
|
|
185
|
|
|
|
223
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Total net revenue
|
|
|
5,985
|
|
|
|
6,150
|
|
|
|
5,874
|
|
|
|
1,433
|
|
|
|
1,432
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Content, subscription, and maintenance
|
|
|
849
|
|
|
|
840
|
|
|
|
826
|
|
|
|
217
|
|
|
|
209
|
|
License
|
|
|
22
|
|
|
|
35
|
|
|
|
45
|
|
|
|
3
|
|
|
|
5
|
|
Amortization of acquired product rights
|
|
|
234
|
|
|
|
352
|
|
|
|
349
|
|
|
|
45
|
|
|
|
98
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of revenue
|
|
|
1,105
|
|
|
|
1,227
|
|
|
|
1,220
|
|
|
|
265
|
|
|
|
312
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
4,880
|
|
|
|
4,923
|
|
|
|
4,654
|
|
|
|
1,168
|
|
|
|
1,120
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
2,367
|
|
|
|
2,386
|
|
|
|
2,415
|
|
|
|
573
|
|
|
|
559
|
|
Research and development
|
|
|
857
|
|
|
|
870
|
|
|
|
895
|
|
|
|
208
|
|
|
|
221
|
|
General and administrative
|
|
|
352
|
|
|
|
343
|
|
|
|
348
|
|
|
|
92
|
|
|
|
89
|
|
Amortization of other purchased intangible assets
|
|
|
247
|
|
|
|
233
|
|
|
|
225
|
|
|
|
61
|
|
|
|
62
|
|
Restructuring and transformation
|
|
|
94
|
|
|
|
96
|
|
|
|
74
|
|
|
|
40
|
|
|
|
34
|
|
Impairment of goodwill
|
|
|
|
|
|
|
7,419
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and impairment of assets held for sale
|
|
|
30
|
|
|
|
46
|
|
|
|
95
|
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
3,947
|
|
|
|
11,393
|
|
|
|
4,052
|
|
|
|
974
|
|
|
|
968
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
933
|
|
|
|
(6,470
|
)
|
|
|
602
|
|
|
|
194
|
|
|
|
152
|
|
Interest income
|
|
|
6
|
|
|
|
37
|
|
|
|
77
|
|
|
|
2
|
|
|
|
2
|
|
Interest expense
|
|
|
(129
|
)
|
|
|
(125
|
)
|
|
|
(119
|
)
|
|
|
(33
|
)
|
|
|
(32
|
)
|
Other income, net
|
|
|
55
|
|
|
|
8
|
|
|
|
63
|
|
|
|
1
|
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes and loss from joint venture
|
|
|
865
|
|
|
|
(6,550
|
)
|
|
|
623
|
|
|
|
164
|
|
|
|
128
|
|
Provision (benefit) for income taxes
|
|
|
112
|
|
|
|
183
|
|
|
|
213
|
|
|
|
(4
|
)
|
|
|
42
|
|
Loss from joint venture
|
|
|
39
|
|
|
|
53
|
|
|
|
|
|
|
|
7
|
|
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
714
|
|
|
$
|
(6,786
|
)
|
|
$
|
410
|
|
|
$
|
161
|
|
|
$
|
74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share basic
|
|
$
|
0.88
|
|
|
$
|
(8.17
|
)
|
|
$
|
0.47
|
|
|
$
|
0.20
|
|
|
$
|
0.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share diluted
|
|
$
|
0.87
|
|
|
$
|
(8.17
|
)
|
|
$
|
0.46
|
|
|
$
|
0.20
|
|
|
$
|
0.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding basic
|
|
|
810
|
|
|
|
831
|
|
|
|
868
|
|
|
|
796
|
|
|
|
816
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding diluted
|
|
|
819
|
|
|
|
831
|
|
|
|
884
|
|
|
|
805
|
|
|
|
827
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
S-2
|
|
|
|
|
|
|
|
|
|
|
July 2,
|
|
April 2,
|
|
|
2010
|
|
2010
|
|
|
(In millions, except ratios)
|
|
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and short-term investments
|
|
$
|
2,739
|
|
|
$
|
3,044
|
|
Working capital
|
|
$
|
(775
|
)
|
|
$
|
580
|
|
Total assets
|
|
$
|
10,866
|
|
|
$
|
11,232
|
|
Long-term obligations, less current portion
|
|
$
|
1,798
|
|
|
$
|
2,913
|
|
Total stockholders equity
|
|
$
|
4,538
|
|
|
$
|
4,548
|
|
Ratio of
Earnings to Fixed Charges
The following table contains our ratio of earnings to fixed
charges for the periods indicated. For these ratios,
earnings represents (a) income (loss) before
income taxes and loss from joint venture and (b) fixed
charges. Fixed charges consist of interest on all indebtedness,
amortization of debt expense and an estimate of the interest
within rental expense.
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
Fiscal Year Ended
|
Ended
|
|
April 2,
|
|
April 3,
|
|
March 28,
|
|
March 30,
|
|
March 31,
|
July 2, 2010
|
|
2010
|
|
2009
|
|
2008
|
|
2007
|
|
2006
|
|
5.32x
|
|
6.81x
|
|
(1)
|
|
5.36x
|
|
5.94x
|
|
13.52x
|
|
|
|
(1) |
|
Earnings for the fiscal year ended April 3, 2009 were not
sufficient to cover fixed charges by a total of
$6.6 billion and, as such, the ratio of earnings to fixed
charges has not been computed for this period. Included in the
earnings for fiscal 2009 is an impairment of goodwill of
$7.4 billion. For more information, see Note 6 of the
Notes to the Consolidated Financial Statements in our
Form 10-K
for the fiscal year ended April 3, 2009. |
S-3
The
Offering
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Issuer |
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Symantec Corporation |
|
Securities Offered |
|
$ aggregate principal amount
of % Senior Notes due
20 and $ aggregate
principal amount of % Senior
Notes due 20 . |
|
Maturity |
|
The
notes will mature
on ,
20 and
the
notes will mature
on ,
20 . |
|
Interest Rate |
|
The 20 notes will bear interest
from ,
2010 at the rate of % per annum and
the 20 notes will bear interest
from ,
2010 at the rate of % per annum. |
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Interest Payment Dates |
|
and
of each year,
beginning ,
2011. |
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Ranking of Notes |
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The notes are unsecured and will rank equally in right of
payment with all of our other existing and future senior
unsecured indebtedness, including our 0.75% Convertible
Senior Notes due 2011 and 1.00% Convertible Senior Notes
due 2013 and indebtedness we may incur from time to time under
our 2010 credit facility. |
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The notes will effectively rank junior to all secured
indebtedness of Symantec to the extent of the assets securing
such indebtedness, and to all liabilities of Symantecs
subsidiaries. As of July 2, 2010, Symantec did not have any
outstanding secured indebtedness and Symantec subsidiaries had
approximately $491 million of outstanding liabilities,
including trade payables, but excluding intercompany liabilities
and deferred revenue. In addition, certain of our subsidiaries
are guarantors under our 2010 credit facility, under which we
have made no borrowings as of the date of this prospectus
supplement. |
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Claims of creditors of Symantecs subsidiaries generally
will have priority with respect to the assets and earnings of
such subsidiaries over the claims of Symantecs creditors,
including holders of the notes. Accordingly, the notes will be
effectively subordinated to creditors, including trade creditors
and preferred stockholders, if any, of Symantecs
subsidiaries. |
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Sinking Fund |
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None. |
|
Optional Redemption |
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We may redeem the notes of either series, in whole or in part,
at any time at redemption prices determined as set forth under
the heading Description of Notes Optional
Redemption. |
|
Change of Control Repurchase Event |
|
Upon the occurrence of a change of control repurchase
event, as defined under Description of
Notes Purchase of Notes upon a Change of Control
Repurchase Event, we will be required to make an offer to
purchase the notes at a price equal to 101% of their principal
amount, plus accrued and unpaid interest to, but not including,
the date of repurchase. |
|
Certain Covenants |
|
The indenture governing the notes contains covenants limiting
our ability and our subsidiaries ability to: |
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create certain liens;
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enter into certain sale and leaseback transactions;
and
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S-4
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consolidate or merge with, or convey, transfer or
lease all or substantially all our assets to, another person.
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However, each of these covenants is subject to a number of
significant exceptions. You should read Description of
Notes Covenants in this prospectus supplement
and Description of Debt Securities in the
accompanying prospectus for a description of these covenants.
Exceptions to these covenants will allow us and our subsidiaries
to incur liens with respect to material assets owned by us. |
|
Form and Denominations |
|
We will issue the notes in fully registered form in
denominations of $2,000 and integral multiples of $1,000 in
excess thereof. Each of the notes will be represented by one or
more global securities registered in the name of a nominee of
The Depository Trust Company, or DTC. |
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You will hold beneficial interests in the notes through DTC, and
DTC and its direct and indirect participants will record your
beneficial interest in their books. Except under limited
circumstances, we will not issue certificated notes. |
|
Further Issuances |
|
We may create and issue further notes of either series ranking
equally with the notes of the corresponding series (other than
issue price and the payment of interest accruing prior to the
issue date of such further notes or except, in some cases, for
the first payment of interest following the issue date of such
further notes). Such notes may be consolidated and form a single
series with the notes of the corresponding series. |
|
Risk Factors |
|
See Risk Factors beginning on
page S-6
of this prospectus supplement for important information
regarding us and an investment in the notes. |
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Use of Proceeds |
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We intend to use the net proceeds of this offering, after
deducting underwriting discounts and offering expenses, for
general corporate purposes, which may include repayment of our
0.75% Convertible Senior Notes due June 15, 2011, of
which $1.1 billion in principal amount was outstanding as
of July 2, 2010. Pending these uses, we may invest the net
proceeds in short-term, interest-bearing, investment-grade
securities. |
|
Absence of Public Market for the Notes |
|
The notes are a new issue of securities and there is currently
no established trading market for the notes of either series. We
do not intend to apply for a listing of the notes on any
securities exchange or an automated dealer quotation system.
Accordingly, there can be no assurance as to the development or
liquidity of any market for the notes. The underwriters have
advised us that they currently intend to make a market in the
notes of each series. However, they are not obligated to do so,
and any market making with respect to the notes may be
discontinued at any time without notice. |
|
Governing Law |
|
State of New York. |
S-5
RISK
FACTORS
Set forth below are risks and uncertainties that could cause our
actual results to differ materially from the results
contemplated by the forward-looking statements contained in this
prospectus supplement, the accompanying prospectus and the
documents incorporated by reference herein and therein.
Risks
Related to Our Business
Adverse
global economic events may harm our business, operating results
and financial condition.
Adverse macroeconomic conditions could negatively affect our
business, operating results or financial condition under a
number of different scenarios. During challenging economic times
and periods of high unemployment, current or potential customers
may delay or forgo decisions to license new products or
additional instances of existing products, upgrade their
existing hardware or operating environments (which upgrades are
often a catalyst for new purchases of our software), or purchase
services. Customers may also have difficulties in obtaining the
requisite third-party financing to complete the purchase of our
products and services. An adverse macroeconomic environment
could also subject us to increased credit risk should customers
be unable to pay us, or delay paying us, for previously
purchased products and services. Accordingly, reserves for
doubtful accounts and write-offs of accounts receivable may
increase. In addition, weakness in the market for end users of
our products could harm the cash flow of our distributors and
resellers who could then delay paying their obligations to us or
experience other financial difficulties. This would further
increase our credit risk exposure and, potentially, cause delays
in our recognition of revenue on sales to these customers.
In addition, financial institution difficulties may make it more
difficult either to utilize our existing debt capacity or
otherwise obtain financing for our operations, investing
activities (including potential acquisitions) or financing
activities. Specific economic trends, such as declines in the
demand for PCs, servers, and other computing devices, or
softness in corporate information technology spending, could
have an even more direct, and harmful, impact on our business.
Fluctuations
in demand for our products and services are driven by many
factors, and a decrease in demand for our products could
adversely affect our financial results.
We are subject to fluctuations in demand for our products and
services due to a variety of factors, including general economic
conditions, competition, product obsolescence, technological
change, shifts in buying patterns, financial difficulties and
budget constraints of our current and potential customers,
levels of broadband usage, awareness of security threats to IT
systems, and other factors. While such factors may, in some
periods, increase product sales, fluctuations in demand can also
negatively impact our product sales. If demand for our products
declines because of general economic conditions or for other
reasons, our revenues and gross margin could be adversely
affected.
If we
are unable to develop new and enhanced products and services
that achieve widespread market acceptance, or if we are unable
to continually improve the performance, features, and
reliability of our existing products and services or adapt our
business model to keep pace with industry trends, our business
and operating results could be adversely affected.
Our future success depends on our ability to respond to the
rapidly changing needs of our customers by developing or
introducing new products, product upgrades, and services on a
timely basis. We have in the past incurred, and will continue to
incur, significant research and development expenses as we
strive to remain competitive. New product development and
introduction involves a significant commitment of time and
resources and is subject to a number of risks and challenges
including:
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Managing the length of the development cycle for new products
and product enhancements, which has frequently been longer than
we originally expected
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Adapting to emerging and evolving industry standards and to
technological developments by our competitors and customers
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S-6
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Extending the operation of our products and services to new and
evolving platforms, operating systems and hardware products,
such as netbooks
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Entering into new or unproven markets with which we have limited
experience
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Managing new product and service strategies, including
integrating our various security and storage technologies,
management solutions, customer service, and support into unified
enterprise security and storage solutions
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Incorporating acquired products and technologies
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Addressing trade compliance issues affecting our ability to ship
new or acquired products
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Developing or expanding efficient sales channels
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Obtaining sufficient licenses to technology and technical access
from operating system software vendors on reasonable terms to
enable the development and deployment of interoperable products,
including source code licenses for certain products with deep
technical integration into operating systems
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In addition, if we cannot adapt our business models to keep pace
with industry trends, our revenue could be negatively impacted.
In connection with our enterprise software offerings, we license
our applications on a variety of bases, such as per server, per
processor, or based on performance criteria such as per amount
of data processed or stored. If enterprises continue to migrate
towards solutions, such as virtualization, which allow
enterprises to run multiple applications and operating systems
on a single server and thereby reduce the number of servers they
are required to own and operate, we may experience lower license
revenues unless we are able to successfully change our
enterprise licensing model or sell additional software to take
into account the impact of these new solutions.
If we are not successful in managing these risks and challenges,
or if our new products, product upgrades, and services are not
technologically competitive or do not achieve market acceptance,
our business and operating results could be adversely affected.
We
operate in a highly competitive environment, and our competitors
may gain market share in the markets for our products that could
adversely affect our business and cause our revenues to
decline.
We operate in intensely competitive markets that experience
rapid technological developments, changes in industry standards,
changes in customer requirements, and frequent new product
introductions and improvements. If we are unable to anticipate
or react to these competitive challenges or if existing or new
competitors gain market share in any of our markets, our
competitive position could weaken and we could experience a drop
in revenue that could adversely affect our business and
operating results. To compete successfully, we must maintain a
successful research and development effort to develop new
products and services and enhance existing products and
services, effectively adapt to changes in the technology or
product rights held by our competitors, appropriately respond to
competitive strategies, and effectively adapt to technological
changes and changes in the ways that our information is
accessed, used, and stored within our enterprise and consumer
markets. If we are unsuccessful in responding to our competitors
or to changing technological and customer demands, we could
experience a negative effect on our competitive position and our
financial results.
Our traditional competitors include independent software vendors
that offer software products that directly compete with our
product offerings. In addition to competing with these vendors
directly for sales to end-users of our products, we compete with
them for the opportunity to have our products bundled with the
product offerings of our strategic partners such as computer
hardware OEMs and ISPs. Our competitors could gain market share
from us if any of these strategic partners replace our products
with the products of our competitors or if they more actively
promote our competitors products than our products. In
addition, software vendors who have bundled our products with
theirs may choose to bundle their software with their own or
other vendors software or may limit our access to standard
product interfaces and inhibit our ability to develop products
for their platform.
We face growing competition from network equipment and computer
hardware manufacturers and large operating system providers.
These firms are increasingly developing and incorporating into
their products data protection and storage and server management
software that competes at some levels with our product
offerings.
S-7
Our competitive position could be adversely affected to the
extent that our customers perceive the functionality
incorporated into these products as replacing the need for our
products.
Security protection is also offered by some of our competitors
at prices lower than our prices or, in some cases is bundled for
free. Some companies offer the lower-priced or free security
products within their computer hardware or software products
that are inferior to our products. Our competitive position
could be adversely affected to the extent that our customers
perceive these security products as replacing the need for more
effective, full featured products such as those that we provide.
The expansion of these competitive trends could have a
significant negative impact on our sales and financial results.
Another growing industry trend is the SaaS business model, where
software vendors develop and host their applications for use by
customers over the Internet. This allows enterprises to obtain
the benefits of commercially licensed, internally operated
software without the associated complexity or high initial
set-up and
operational costs. Advances in the SaaS business model could
enable the growth of our competitors and could affect the
success of our traditional software licensing models. We are
offering our own SaaS offerings, including those related to our
fiscal 2009 acquisition of Message Labs, and we continue to
incorporate these offerings into our licensing model. However,
we may not be able to successfully incorporate our SaaS
offerings into our current licensing models. Our inability to
successfully develop and market new and existing SaaS product
offerings could cause us to lose business to competitors.
Many of our competitors have greater financial, technical,
sales, marketing, or other resources than we do and consequently
may have the ability to influence customers to purchase their
products instead of ours. In addition, consolidation within our
industry or other changes in the competitive environment, such
as the completion of Intel Corporations recently announced
plans to acquire one of our traditional competitors, could
result in larger competitors that compete with us on several
levels. We also face competition from many smaller companies
that specialize in particular segments of the markets in which
we compete.
If we
fail to manage our sales and distribution channels effectively
or if our partners choose not to market and sell our products to
their customers, our operating results could be adversely
affected.
We sell our products to customers around the world through
multi-tiered sales and distribution networks. Sales through
these different channels involve distinct risks, including the
following:
Direct Sales. A significant portion of our
revenues from enterprise products is derived from sales by our
direct sales force to end-users. Special risks associated with
this sales channel include:
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Longer sales cycles associated with direct sales efforts
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Difficulty in hiring, retaining, and motivating our direct sales
force
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Substantial amounts of training for sales representatives to
become productive, including regular updates to cover new and
revised products
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Indirect Sales Channels. A significant portion
of our revenues is derived from sales through indirect channels,
including distributors that sell our products to end-users and
other resellers. This channel involves a number of risks,
including:
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Our lack of control over the timing of delivery of our products
to end-users
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Our resellers and distributors are not subject to minimum sales
requirements or any obligation to market our products to their
customers
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Our reseller and distributor agreements are generally
nonexclusive and may be terminated at any time without cause
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Our resellers and distributors frequently market and distribute
competing products and may, from time to time, place greater
emphasis on the sale of these products due to pricing,
promotions, and other terms offered by our competitors
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S-8
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Recent consolidation of electronics retailers has increased
their negotiating power with respect to hardware and software
providers
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OEM Sales Channels. A significant portion of
our revenues is derived from sales through our OEM partners that
incorporate our products into, or bundle our products with,
their products. Our reliance on this sales channel involves many
risks, including:
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Our lack of control over the shipping dates or volume of systems
shipped
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Our OEM partners are generally not subject to minimum sales
requirements or any obligation to market our products to their
customers
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Our OEM partners may terminate or renegotiate their arrangements
with us and new terms may be less favorable due, among other
things, to an increasingly competitive relationship with certain
partners
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Sales through our OEM partners are subject to changes in general
economic conditions, strategic direction, competitive risks, and
other issues that could result in a reduction of OEM sales
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The development work that we must generally undertake under our
agreements with our OEM partners may require us to invest
significant resources and incur significant costs with little or
no associated revenues
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The time and expense required for the sales and marketing
organizations of our OEM partners to become familiar with our
products may make it more difficult to introduce those products
to the market
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Our OEM partners may develop, market, and distribute their own
products and market and distribute products of our competitors,
which could reduce our sales
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In many cases we must incur up-front costs to access the OEM
channel, particularly in the consumer market, and we may not
recoup those up-front costs if customers do not ultimately
activate and purchase our products
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If we fail to manage our sales and distribution channels
successfully, these channels may conflict with one another or
otherwise fail to perform as we anticipate, which could reduce
our sales and increase our expenses as well as weaken our
competitive position. Some of our distribution partners have
experienced financial difficulties in the past, and if our
partners suffer financial difficulties in the future because of
general economic conditions or for other reasons, these partners
may delay paying their obligations to us and we may have reduced
sales or increased bad debt expense that could adversely affect
our operating results. In addition, reliance on multiple
channels subjects us to events that could cause unpredictability
in demand, which could increase the risk that we may be unable
to plan effectively for the future, and could result in adverse
operating results in future periods.
We
have grown, and may continue to grow, through acquisitions that
give rise to risks and challenges that could adversely affect
our future financial results.
We have in the past acquired, and we expect to acquire in the
future, other businesses, business units, and technologies.
Acquisitions can involve a number of special risks and
challenges, including:
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Complexity, time, and costs associated with the integration of
acquired business operations, workforce, products, and
technologies into our existing business, sales force, employee
base, product lines, and technology
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Diversion of management time and attention from our existing
business and other business opportunities
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Loss or termination of employees, including costs associated
with the termination or replacement of those employees
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Assumption of debt or other liabilities of the acquired
business, including litigation related to the acquired business
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The addition of acquisition-related debt as well as increased
expenses and working capital requirements
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S-9
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Dilution of stock ownership of existing stockholders
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Increased costs and efforts in connection with compliance with
Section 404 of the Sarbanes-Oxley Act
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Substantial accounting charges for restructuring and related
expenses, write-off of in-process research and development,
impairment of goodwill, amortization of intangible assets, and
stock-based compensation expense, such as the $7.4 billion
goodwill write-down we recorded during fiscal 2009
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Integrating acquired businesses has been and will continue to be
a complex, time consuming, and expensive process, and can impact
the effectiveness of our internal control over financial
reporting.
If integration of our acquired businesses is not successful, we
may not realize the potential benefits of an acquisition or
suffer other adverse effects that we currently do not foresee.
To integrate acquired businesses, we must implement our
technology systems in the acquired operations and integrate and
manage the personnel of the acquired operations. We also must
effectively integrate the different cultures of acquired
business organizations into our own in a way that aligns various
interests, and may need to enter new markets in which we have no
or limited experience and where competitors in such markets have
stronger market positions.
Any of the foregoing, and other factors, could harm our ability
to achieve anticipated levels of profitability from acquired
businesses or to realize other anticipated benefits of
acquisitions. In addition, because acquisitions of high
technology companies are inherently risky, no assurance can be
given that our previous or future acquisitions will be
successful and will not adversely affect our business, operating
results, or financial condition.
Our
international operations involve risks that could increase our
expenses, adversely affect our operating results, and require
increased time and attention of our management.
We derive a substantial portion of our revenues from customers
located outside of the U.S. and we have significant
operations outside of the U.S., including engineering, sales,
customer support, and production. We plan to expand our
international operations, but such expansion is contingent upon
the financial performance of our existing international
operations as well as our identification of growth
opportunities. Our international operations are subject to risks
in addition to those faced by our domestic operations, including:
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Potential loss of proprietary information due to
misappropriation or laws that may be less protective of our
intellectual property rights than U.S. laws or may not be
adequately enforced
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Requirements of foreign laws and other governmental controls,
including trade and labor restrictions and related laws that
reduce the flexibility of our business operations
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Regulations or restrictions on the use, import, or export of
encryption technologies that could delay or prevent the
acceptance and use of encryption products and public networks
for secure communications
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Central bank and other restrictions on our ability to repatriate
cash from our international subsidiaries or to exchange cash in
international subsidiaries into cash available for use in the
U.S.
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Fluctuations in currency exchange rates and economic instability
such as higher interest rates in the U.S. and inflation
that could reduce our customers ability to obtain
financing for software products or that could make our products
more expensive or could increase our costs of doing business in
certain countries
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Limitations on future growth or inability to maintain current
levels of revenues from international sales if we do not invest
sufficiently in our international operations
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Longer payment cycles for sales in foreign countries and
difficulties in collecting accounts receivable
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Difficulties in staffing, managing, and operating our
international operations, including difficulties related to
administering our stock plans in some foreign countries
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Difficulties in coordinating the activities of our
geographically dispersed and culturally diverse operations
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Seasonal reductions in business activity in the summer months in
Europe and in other periods in other countries
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S-10
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Reduced sales due to the failure to obtain any required export
approval of our technologies, particularly our encryption
technologies
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Costs and delays associated with developing software and
providing support in multiple languages
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Political unrest, war, or terrorism, particularly in areas in
which we have facilities
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A significant portion of our transactions outside of the
U.S. are denominated in foreign currencies. Accordingly,
our revenues and expenses will continue to be subject to
fluctuations in foreign currency rates. We expect to be affected
by fluctuations in foreign currency rates in the future,
especially if international sales continue to grow as a
percentage of our total sales or our operations outside the
United States continue to increase.
The level of corporate tax from sales to our
non-U.S. customers
is less than the level of tax from sales to our
U.S. customers. This benefit is contingent upon existing
tax regulations in the U.S. and in the countries in which
our international operations are located. Future changes in
domestic or international tax regulations could adversely affect
our ability to continue to realize these tax benefits.
Our
products are complex and operate in a wide variety of computer
configurations, which could result in errors or product
failures.
Because we offer very complex products, undetected errors,
failures, or bugs may occur, especially when products are first
introduced or when new versions are released. Our products are
often installed and used in large-scale computing environments
with different operating systems, system management software,
and equipment and networking configurations, which may cause
errors or failures in our products or may expose undetected
errors, failures, or bugs in our products. Our customers
computing environments are often characterized by a wide variety
of standard and non-standard configurations that make
pre-release testing for programming or compatibility errors very
difficult and time-consuming. In addition, despite testing by us
and others, errors, failures, or bugs may not be found in new
products or releases until after commencement of commercial
shipments. In the past, we have discovered software errors,
failures, and bugs in certain of our product offerings after
their introduction and, in some cases, may have experienced
delayed or lost revenues as a result of these errors.
Errors, failures, or bugs in products released by us could
result in negative publicity, damage to our brand, product
returns, loss of or delay in market acceptance of our products,
loss of competitive position, or claims by customers or others.
Many of our end-user customers use our products in applications
that are critical to their businesses and may have a greater
sensitivity to defects in our products than to defects in other,
less critical, software products. In addition, if an actual or
perceived breach of information integrity or availability occurs
in one of our end-user customers systems, regardless of
whether the breach is attributable to our products, the market
perception of the effectiveness of our products could be harmed.
Alleviating any of these problems could require significant
expenditures of our capital and other resources and could cause
interruptions, delays, or cessation of our product licensing,
which could cause us to lose existing or potential customers and
could adversely affect our operating results.
If we
are unable to attract and retain qualified employees, lose key
personnel, fail to integrate replacement personnel successfully,
or fail to manage our employee base effectively, we may be
unable to develop new and enhanced products and services,
effectively manage or expand our business, or increase our
revenues.
Our future success depends upon our ability to recruit and
retain our key management, technical, sales, marketing, finance,
and other critical personnel. Our officers and other key
personnel are
employees-at-will,
and we cannot assure you that we will be able to retain them.
Competition for people with the specific skills that we require
is significant. In order to attract and retain personnel in a
competitive marketplace, we believe that we must provide a
competitive compensation package, including cash and
equity-based compensation. The volatility in our stock price may
from time to time adversely affect our ability to recruit or
retain employees. In addition, we may be unable to obtain
required stockholder approvals of future increases in the number
of shares available for issuance under our equity compensation
plans, and accounting rules require us to treat the issuance of
employee stock options and other forms of equity-based
compensation as compensation expense. As a result, we may decide
to issue fewer equity-based incentives and may be impaired in
our efforts to attract and retain necessary personnel. If we are
S-11
unable to hire and retain qualified employees, or conversely, if
we fail to manage employee performance or reduce staffing levels
when required by market conditions, our business and operating
results could be adversely affected.
From time to time, key personnel leave our company. While we
strive to reduce the negative impact of such changes, the loss
of any key employee could result in significant disruptions to
our operations, including adversely affecting the timeliness of
product releases, the successful implementation and completion
of company initiatives, the effectiveness of our disclosure
controls and procedures and our internal control over financial
reporting, and the results of our operations. In addition,
hiring, training, and successfully integrating replacement sales
and other personnel could be time consuming, may cause
additional disruptions to our operations, and may be
unsuccessful, which could negatively impact future revenues.
From
time to time we are a party to class action lawsuits, which
often require significant management time and attention and
result in significant legal expenses, and which could, if not
determined favorably, negatively impact our business, financial
condition, results of operations, and cash flows.
We have been named as a party to class action lawsuits, and we
may be named in additional litigation. The expense of defending
such litigation may be costly and divert managements
attention from the
day-to-day
operations of our business, which could adversely affect our
business, results of operations, and cash flows. In addition, an
unfavorable outcome in such litigation could negatively impact
our business, results of operations, and cash flows.
Third
parties claiming that we infringe their proprietary rights could
cause us to incur significant legal expenses and prevent us from
selling our products.
From time to time, we receive claims that we have infringed the
intellectual property rights of others, including claims
regarding patents, copyrights, and trademarks. In addition,
former employers of our former, current, or future employees may
assert claims that such employees have improperly disclosed to
us the confidential or proprietary information of these former
employers. Any such claim, with or without merit, could result
in costly litigation and distract management from
day-to-day
operations. If we are not successful in defending such claims,
we could be required to stop selling, delay shipments of, or
redesign our products, pay monetary amounts as damages, enter
into royalty or licensing arrangements, or satisfy
indemnification obligations that we have with some of our
customers. We cannot assure you that any royalty or licensing
arrangements that we may seek in such circumstances will be
available to us on commercially reasonable terms or at all.
In addition, we license and use software from third parties in
our business. These third party software licenses may not
continue to be available to us on acceptable terms or at all,
and may expose us to additional liability. This liability, or
our inability to use any of this third party software, could
result in shipment delays or other disruptions in our business
that could materially and adversely affect our operating results.
If we
do not protect our proprietary information and prevent third
parties from making unauthorized use of our products and
technology, our financial results could be harmed.
Most of our software and underlying technology is proprietary.
We seek to protect our proprietary rights through a combination
of confidentiality agreements and procedures and through
copyright, patent, trademark, and trade secret laws. However,
all of these measures afford only limited protection and may be
challenged, invalidated, or circumvented by third parties. Third
parties may copy all or portions of our products or otherwise
obtain, use, distribute, and sell our proprietary information
without authorization. Third parties may also develop similar or
superior technology independently by designing around our
patents. Our shrink-wrap license agreements are not signed by
licensees and therefore may be unenforceable under the laws of
some jurisdictions. Furthermore, the laws of some foreign
countries do not offer the same level of protection of our
proprietary rights as the laws of the U.S., and we may be
subject to unauthorized use of our products in those countries.
The unauthorized copying or use of our products or proprietary
information could result in reduced sales of our products. Any
legal action to protect proprietary information that we may
bring or be engaged in with a strategic partner or vendor could
adversely affect our ability to access software, operating
system, and hardware platforms of such partner or vendor, or
cause such partner or vendor to choose not to offer our products
to their customers. In addition, any legal action to protect
S-12
proprietary information that we may bring or be engaged in,
alone or through our alliances with the Business Software
Alliance (BSA), or the Software &
Information Industry Association (SIIA), could be
costly, may distract management from
day-to-day
operations, and may lead to additional claims against us, which
could adversely affect our operating results.
Some
of our products contain open source software, and
any failure to comply with the terms of one or more of these
open source licenses could negatively affect our
business.
Certain of our products are distributed with software licensed
by its authors or other third parties under so-called open
source licenses, which may include, by way of example, the
GNU General Public License, GNU Lesser General Public License,
the Mozilla Public License, the BSD License, and the Apache
License. Some of these licenses contain requirements that we
make available source code for modifications or derivative works
we create based upon the open source software, and that we
license such modifications or derivative works under the terms
of a particular open source license or other license granting
third parties certain rights of further use. By the terms of
certain open source licenses, we could be required to release
the source code of our proprietary software if we combine our
proprietary software with open source software in a certain
manner. In addition to risks related to license requirements,
usage of open source software can lead to greater risks than use
of third party commercial software, as open source licensors
generally do not provide warranties or controls on origin of the
software. We have established processes to help alleviate these
risks, including a review process for screening requests from
our development organizations for the use of open source, but we
cannot be sure that all open source is submitted for approval
prior to use in our products. In addition, many of the risks
associated with usage of open source cannot be eliminated, and
could, if not properly addressed, negatively affect our business.
Our
software products and website may be subject to intentional
disruption that could adversely impact our reputation and future
sales.
Although we believe we have sufficient controls in place to
prevent intentional disruptions, we expect to be an ongoing
target of attacks specifically designed to impede the
performance of our products and harm our reputation as a
company. Similarly, experienced computer programmers may attempt
to penetrate our network security or the security of our website
and misappropriate proprietary information
and/or cause
interruptions of our services. Because the techniques used by
such computer programmers to access or sabotage networks change
frequently and may not be recognized until launched against a
target, we may be unable to anticipate these techniques. The
theft and/or
unauthorized use or publication of our trade secrets and other
confidential business information as a result of such an event
could adversely affect our competitive position, reputation,
brand and future sales of our products, and our customers may
assert claims against us related to resulting losses of
confidential or proprietary information. Our business could be
subject to significant disruption, and we could suffer monetary
and other losses and reputational harm, in the event of such
incidents and claims.
Increased
customer demands on our technical support services may adversely
affect our relationships with our customers and our financial
results.
We offer technical support services with many of our products.
We may be unable to respond quickly enough to accommodate
short-term increases in customer demand for support services. We
also may be unable to modify the format of our support services
to compete with changes in support services provided by
competitors or successfully integrate support for our customers.
Further customer demand for these services, without
corresponding revenues, could increase costs and adversely
affect our operating results.
We have outsourced a substantial portion of our worldwide
consumer support functions to third party service providers. If
these companies experience financial difficulties, do not
maintain sufficiently skilled workers and resources to satisfy
our contracts, or otherwise fail to perform at a sufficient
level under these contracts, the level of support services to
our customers may be significantly disrupted, which could
materially harm our relationships with these customers.
S-13
Accounting
charges may cause fluctuations in our quarterly financial
results.
Our financial results have been in the past, and may continue to
be in the future, materially affected by non-cash and other
accounting charges, including:
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Amortization of intangible assets, including acquired product
rights
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Impairment of goodwill
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Stock-based compensation expense
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Restructuring charges
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Impairment of long-lived assets
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Loss on sale of a business and similar write-downs of assets
held for sale
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For example, during fiscal 2009, we recorded a non-cash goodwill
impairment charge of $7.4 billion, resulting in a
significant net loss for the year. Goodwill is evaluated
annually for impairment in the fourth quarter of each fiscal
year or more frequently if events and circumstances warrant as
we determined they did in the third quarter of fiscal 2009, and
our evaluation depends to a large degree on estimates and
assumptions made by our management. Our assessment of any
impairment of goodwill is based on a comparison of the fair
value of each of our reporting units to the carrying value of
that reporting unit. Our determination of fair value relies on
managements assumptions of our future revenues, operating
costs, and other relevant factors. If managements
estimates of future operating results change, or if there are
changes to other key assumptions such as the discount rate
applied to future operating results, the estimate of the fair
value of our reporting units could change significantly, which
could result in a goodwill impairment charge. In addition, we
evaluate our other long-lived assets, including intangible
assets whenever events or circumstances occur which indicate
that the value of these assets might be impaired. If we
determine that impairment has occurred, we could incur an
impairment charge against the value of these assets.
The foregoing types of accounting charges may also be incurred
in connection with or as a result of other business
acquisitions. The price of our common stock could decline to the
extent that our financial results are materially affected by the
foregoing accounting charges.
Our
effective tax rate may increase, which could increase our income
tax expense and reduce (increase) our net income
(loss).
Our effective tax rate could be adversely affected by several
factors, many of which are outside of our control, including:
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Changes in the relative proportions of revenues and income
before taxes in the various jurisdictions in which we operate
that have differing statutory tax rates
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Changing tax laws, regulations, and interpretations in multiple
jurisdictions in which we operate as well as the requirements of
certain tax rulings
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The tax effects of purchase accounting for acquisitions and
restructuring charges that may cause fluctuations between
reporting periods
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Tax assessments, or any related tax interest or penalties, could
significantly affect our income tax expense for the period in
which the settlements take place.
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The price of our common stock could decline if our financial
results are materially affected by an adverse change in our
effective tax rate.
We report our results of operations based on our determinations
of the amount of taxes owed in the various tax jurisdictions in
which we operate. From time to time, we receive notices that a
tax authority in a particular jurisdiction in which we are
subject to taxes has determined that we owe a greater amount of
tax than we have reported to such authority. We are regularly
engaged in discussions and sometimes disputes with these tax
authorities. We are engaged in disputes of this nature at this
time. If the ultimate determination of our taxes owed in
S-14
any of these jurisdictions is for an amount in excess of the tax
provision we have recorded or reserved for, our operating
results, cash flows, and financial condition could be adversely
affected.
Fluctuations
in our quarterly financial results have affected the price of
our common stock in the past and could affect our stock price in
the future.
Our quarterly financial results have fluctuated in the past and
are likely to vary significantly in the future due to a number
of factors, many of which are outside of our control and which
could adversely affect our operations and operating results. If
our quarterly financial results or our predictions of future
financial results fail to meet the expectations of securities
analysts and investors, our stock price could be negatively
affected. Any volatility in our quarterly financial results may
make it more difficult for us to raise capital in the future or
pursue acquisitions that involve issuances of our stock. Our
operating results for prior periods may not be effective
predictors of our future performance.
Factors associated with our industry, the operation of our
business, and the markets for our products may cause our
quarterly financial results to fluctuate, including:
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Reduced demand for any of our products
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Entry of new competition into our markets
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Competitive pricing pressure for one or more of our classes of
products
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Our ability to timely complete the release of new or enhanced
versions of our products
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Fluctuations in foreign currency exchange rates
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The number, severity, and timing of threat outbreaks (e.g. worms
and viruses)
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Our resellers making a substantial portion of their purchases
near the end of each quarter
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Enterprise customers tendency to negotiate site licenses
near the end of each quarter
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Cancellation, deferral, or limitation of orders by customers
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Movement in interest rates
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The rate of adoption of new product technologies and new
releases of operating systems
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Weakness or uncertainty in general economic or industry
conditions in any of the multiple markets in which we operate
that could reduce customer demand and ability to pay for our
products and services
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Political and military instability, which could slow spending
within our target markets, delay sales cycles, and otherwise
adversely affect our ability to generate revenues and operate
effectively
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Budgetary constraints of customers, which are influenced by
corporate earnings and government budget cycles and spending
objectives
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Disruptions in our business operations or target markets caused
by, among other things, earthquakes, floods, or other natural
disasters affecting our headquarters located in Silicon Valley,
California, an area known for seismic activity, or our other
locations worldwide
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Acts of war or terrorism
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Intentional disruptions by third parties
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Health or similar issues, such as a pandemic
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Any of the foregoing factors could cause the trading price of
our common stock to fluctuate significantly.
S-15
Risks
Related to the Notes
The
notes are structurally subordinated to the indebtedness of our
subsidiaries.
The notes are our obligations exclusively and not of any of our
subsidiaries. A significant portion of our operations is
conducted through our subsidiaries. Our subsidiaries are
separate legal entities that have no obligation to pay any
amounts due under the notes or to make any funds available
therefor, whether by dividends, loans or other payments. Except
to the extent we are a creditor with recognized claims against
our subsidiaries, all claims of creditors (including trade
creditors) and holders of preferred stock, if any, of our
subsidiaries will have priority with respect to the assets of
such subsidiaries over our claims (and therefore the claims of
our creditors, including holders of the notes). Consequently,
the notes will be effectively subordinated to all liabilities of
any of our subsidiaries and any subsidiaries that we may in the
future acquire or establish. As of July 2, 2010, our
subsidiaries had approximately $491 million of outstanding
liabilities, including trade payables but excluding intercompany
liabilities and deferred revenue. In addition, on
September 8, 2010, we entered into a four-year senior
unsecured revolving credit facility under which we may borrow up
to $1.0 billion (the 2010 credit facility) and
concurrently terminated our existing credit facility. Certain of
our subsidiaries are guarantors under the 2010 credit facility,
under which we have made no borrowings as of the date of this
prospectus supplement.
We may
depend on the receipt of dividends or other intercompany
transfers from our subsidiaries to meet our obligations under
the notes.
The notes are our obligations exclusively and not of any of our
subsidiaries. We conduct a significant portion of our operations
through our subsidiaries. We may therefore be dependent upon
dividends or other intercompany transfers of funds from our
subsidiaries in order to meet our obligations under the notes
and to meet our other obligations. However, our subsidiaries are
separate legal entities that have no obligation to pay any
amounts due under the notes or to make any funds available
therefor, whether by dividends, loans or other payments.
Because
the notes are not secured and are effectively subordinated to
the rights of secured creditors, the notes will be subject to
the prior claims of any secured creditors, and if a default
occurs, we may not have sufficient funds to fulfill our
obligations under the notes.
The notes are unsecured obligations, ranking equally with other
senior unsecured indebtedness, including the convertible notes.
Although we do not currently have any secured indebtedness, the
indenture governing the notes permits us to incur secured debt
under specified circumstances. If we incur secured debt, our
assets will be subject to prior claims by our secured creditors.
In the event of bankruptcy, insolvency, liquidation,
reorganization, dissolution or other winding up of Symantec,
assets that secure debt will be available to pay obligations on
the notes only after all debt secured by those assets has been
repaid in full. Holders of the notes will participate in any
remaining assets ratably with all of their respective unsecured
and unsubordinated creditors, including trade creditors. If
Symantec incurs any additional obligations that rank equally
with the notes, including trade payables, the holders of those
obligations will be entitled to share ratably with the holders
of the notes and the convertible notes in any proceeds
distributed upon our bankruptcy, insolvency, liquidation,
reorganization, dissolution or other winding up. This may have
the effect of reducing the amount of proceeds paid to you. If
there are not sufficient assets remaining to pay all these
creditors, all or a portion of the notes then outstanding would
remain unpaid.
The
negative covenants in the indenture that governs the notes may
have a limited effect.
The indenture governing the notes contains covenants limiting
our ability and our subsidiaries ability to create certain
liens, enter into certain sale and leaseback transactions, and
consolidate or merge with, or convey, transfer or lease all or
substantially all our assets to, another person. The limitation
on liens and limitation on sale and leaseback covenants contain
exceptions that will allow us and our subsidiaries to incur
liens with respect to material assets. See Description of
Notes Certain Covenants in this prospectus
supplement. In light of these exceptions, holders of the notes
may be structurally or contractually subordinated to new lenders.
S-16
We are
permitted to incur more debt, which may intensify the risks
associated with our current leverage, including the risk that we
will be unable to service our debt.
The indenture governing the notes does not limit the amount of
additional debt that we may incur. In addition, we issued
$2.1 billion of convertible senior notes in June 2006 and
under our 2010 credit facility we may borrow up to
$1.0 billion. We have made no borrowings under the 2010
credit facility through the date of this prospectus supplement.
If we incur additional debt, however, the risks associated with
our leverage, including the risk that we will be unable to
service our debt, will increase.
The
provisions in the indenture that governs the notes relating to
change of control transactions will not necessarily protect you
in the event of a highly leveraged transaction.
The provisions contained in the indenture will not necessarily
afford you protection in the event of a highly leveraged
transaction that may adversely affect you, including a
reorganization, restructuring, merger or other similar
transaction involving us. These transactions may not involve a
change in voting power or beneficial ownership or, even if they
do, may not involve a change of the magnitude required under the
definition of change of control repurchase event in the
indenture to trigger these provisions, notably, that the
transactions are accompanied or followed within 60 days by
a downgrade in the rating of the notes offered under this
prospectus supplement, following which the notes are no longer
rated investment grade. Except as described under
Description of Notes Purchase of Notes upon a
Change of Control Repurchase Event, the indenture does not
contain provisions that permit the holders of the notes to
require us to repurchase the notes in the event of a takeover,
recapitalization or similar transaction.
We may
not be able to repurchase all of the notes upon a change of
control repurchase event.
As described under Description of Notes
Purchase of Notes upon a Change of Control Repurchase
Event, we will be required to offer to repurchase the
notes upon the occurrence of a change of control repurchase
event. We may not have sufficient funds to repurchase the notes
in cash at such time or have the ability to arrange necessary
financing on acceptable terms. In addition, our ability to
repurchase the notes for cash may be limited by law or the terms
of other agreements relating to our indebtedness outstanding at
the time. Furthermore, a change of control would constitute an
event of default under our 2010 credit facility.
There
is no prior market for the notes. If one develops, it may not be
liquid.
We do not intend to list the notes on any national securities
exchange or to seek their quotation on any automated dealer
quotation system. We cannot assure you that any liquid market
for the notes will ever develop or be maintained. The
underwriters have advised us that they currently intend to make
a market in the notes following the offering. However, the
underwriters have no obligation to make a market in the notes
and they may cease market making activities at any time without
notice. Further, there can be no assurance as to the liquidity
of any market that may develop for the notes, your ability to
sell your notes or the price at which you will be able to sell
your notes. Future trading prices of the notes will depend on
many factors, including prevailing interest rates, our financial
condition and results of operations, the then-current ratings
assigned to the notes and the market for similar securities. Any
trading market that develops would be affected by many factors
independent of and in addition to the foregoing, including:
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time remaining to the maturity of the notes;
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outstanding amount of the notes;
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the terms related to optional redemption of the notes; and
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level, direction and volatility of market interest rates
generally.
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S-17
Ratings
of the notes may change after issuance and affect the market
price and marketability of the notes.
The notes have been rated by the major credit rating agencies
and we expect that these agencies will routinely evaluate our
debt in the future. These ratings are limited in scope, and do
not address all material risks relating to an investment in the
notes, but rather reflect only the view of each rating agency at
the time the rating is issued. An explanation of the
significance of such rating may be obtained from such rating
agency. There is no assurance that such credit ratings will be
issued or remain in effect for any given period of time or that
such ratings will not be lowered, suspended or withdrawn
entirely by the rating agencies, if, in each rating
agencys judgment, circumstances so warrant. It is also
possible that such ratings may be lowered in connection with
future events, such as future acquisitions. Any lowering,
suspension or withdrawal of such ratings may have an adverse
effect on the market price or marketability of the notes. In
addition, any decline in the ratings of the notes may make it
more difficult for us to raise capital on acceptable terms.
We
have not historically maintained substantial levels of
indebtedness, and our financial condition and results of
operations could be adversely affected if we do not effectively
manage our liabilities.
We currently have outstanding $1.1 billion in aggregate
principal amount of convertible senior notes due June 15,
2011 and $1.0 billion in aggregate principal amount of
convertible senior notes due June 15, 2013 (collectively,
the convertible notes), which bear interest at 0.75%
and 1.00% per annum, respectively. Our long-term debt will
increase by the principal amount of the notes sold in this
offering, and these notes are expected to bear interest at rates
higher than those in effect for the convertible notes.
Consequently, the amount of our cash interest payments in future
periods will increase as a result of this offering. In addition,
the 2010 credit facility provides us with a borrowing capacity
of $1.0 billion. From time to time in the future, we may
also incur indebtedness in addition to the amount available
under our credit facility. Our maintenance of substantial levels
of debt could adversely affect our flexibility to take advantage
of certain corporate opportunities and could adversely affect
our financial condition and results of operations. In addition,
the instruments governing the convertible notes and the notes
sold in this offering contain certain covenants applicable to us
and our subsidiaries that may adversely affect our ability to
incur certain liens or engage in certain types of sale and
leaseback transactions. We cannot assure you that the
indebtedness represented by the notes, in addition to our other
indebtedness, will not adversely affect our operating results or
financial condition.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
All statements included or incorporated by reference in this
prospectus supplement and the accompanying prospectus, other
than statements of historical facts, that address activities,
events or developments that we intend, expect, project, believe
or anticipate will or may occur in the future are
forward-looking statements. This prospectus supplement and the
accompanying prospectus contain forward-looking statements that
are based on current expectations, estimates, forecasts and
projections about us, our future performance, our business, our
beliefs and our managements assumptions. In addition, we,
or others on our behalf, may make forward-looking statements in
press releases or written statements, or in our communications
and discussions with investors and analysts in the normal course
of business through meetings, webcasts, phone calls and
conference calls. Words such as expect,
anticipate, outlook, could,
target, project, intend,
plan, believe, seek,
estimate, should, may,
assume or continue, and variations of
such words and similar expressions are intended to identify such
forward-looking statements. These statements are not guarantees
of future performance and involve certain risks, uncertainties
and assumptions that are difficult to predict. We describe some
of the risks, uncertainties and assumptions that could affect
our business including our financial condition and results of
operations in Risk Factors above. We may update our
descriptions of such risks, uncertainties and assumptions in a
supplement to this prospectus supplement. We have based our
forward-looking statements on our managements beliefs and
assumptions based on information available to our management at
the time the statements are made. We caution you that actual
outcomes and results may differ materially from what is
expressed, implied or forecast by our forward-looking
statements. Reference is made in particular to forward-looking
statements regarding projections of our future financial
performance, capital resources, anticipated growth and trends in
our businesses and in our industries, the anticipated impact of
our acquisitions, and other characterizations of future events
or circumstances.
S-18
Except as required under the federal securities laws and the
rules and regulations of the SEC, we do not have any intention
or obligation to update publicly any forward-looking statements
after the distribution of this prospectus supplement and the
accompanying prospectus, whether as a result of new information,
future events, changes in assumptions or otherwise.
USE OF
PROCEEDS
We intend to use the net proceeds of this offering, after
deducting estimated underwriting discounts and estimated
offering expenses, for general corporate purposes, which may
include repayment of our 0.75% Convertible Senior Notes due
June 15, 2011, of which $1.1 billion in principal
amount was outstanding as of July 2, 2010. Pending these
uses, we may invest the net proceeds in short-term,
interest-bearing, investment-grade securities.
S-19
CAPITALIZATION
The following table sets forth our consolidated cash, cash
equivalents and short-term investments, short-term debt and
capitalization as of July 2, 2010. Our capitalization is
presented:
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On an actual basis; and
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As adjusted to reflect the estimated proceeds to us from the
sale of the notes pursuant to this offering.
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This table should be read in conjunction with
Summary Summary Consolidated Financial
Data appearing elsewhere in this prospectus supplement and
Managements Discussion and Analysis of Financial
Condition and Results of Operations and the Consolidated
Financial Statements included in our Quarterly Report on
Form 10-Q
for the fiscal quarter ended July 2, 2010, which is
incorporated by reference in this prospectus supplement.
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July 2, 2010
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Actual
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As Adjusted
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(In millions, except par value)
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Cash, cash equivalents and short-term investments(1)
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$
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2,739
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$
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Short-term debt:
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0.75% Convertible Senior Notes due 2011
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$
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1,044
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$
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1,044
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Long-term debt(2):
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% Senior Notes due
20 offered hereby
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$
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$
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% Senior Notes due
20 offered hereby
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1.00% Convertible Senior Notes due 2013
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853
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853
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Total long-term debt
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$
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853
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$
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Stockholders equity:
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Preferred stock
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$
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$
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Common stock
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8
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8
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Additional paid-in capital
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8,813
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8,813
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Accumulated other comprehensive income
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165
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165
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Accumulated deficit
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(4,448
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)
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(4,448
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Total stockholders equity
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$
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4,538
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$
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4,538
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Total capitalization
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$
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5,391
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$
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(1) |
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Excludes the use of approximately $1.28 billion in cash in
connection with our August 2010 acquisition of specific assets
from VeriSign, Inc. and its subsidiaries and the impact of any
post-acquisition working capital adjustment under the terms of
the acquisition agreement. |
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On September 8, 2010, we entered into a four-year
$1.0 billion senior unsecured revolving credit facility
that expires in September 2014 and concurrently terminated our
existing credit facility. We have incurred no indebtedness under
the 2010 credit facility through the date of this prospectus
supplement. |
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DESCRIPTION
OF NOTES
The following description of the particular terms of the notes
offered by this prospectus supplement should be read in
conjunction with the description of the general terms and
provisions of the debt securities under the caption
Description of Debt Securities beginning on
page 4 of the accompanying prospectus.
The notes will be issued under an indenture, dated
September , 2010, between Symantec and Wells
Fargo Bank, National Association, as trustee (the
trustee). The following summary of provisions of the
indenture and the notes does not purport to be complete and is
subject to, and qualified in its entirety by reference to, all
of the provisions of the indenture, including definitions
therein of certain terms and provisions made a part of the
indenture by reference to the Trust Indenture Act of 1939,
as amended (the Trust Indenture Act). This
summary may not contain all information that you may find
useful. You should read the indenture and the notes, copies of
which are available from Symantec upon request. Capitalized
terms used and not defined in this summary have the meanings
specified in the indenture. References to Symantec
in this section of this prospectus supplement are only to
Symantec Corporation and not to any of its subsidiaries.
General
The notes will have the following basic terms:
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the notes will be senior unsecured obligations of Symantec and
will rank equally with all other existing and future unsecured
and unsubordinated debt obligations of Symantec, including
Symantecs 0.75% Convertible Senior Notes due 2011 and
1.00% Convertible Senior Notes due 2013 and indebtedness we
may incur from time to time under the four-year senior unsecured
$1.0 billion revolving credit facility that we entered into
on September 8, 2010 (the 2010 credit facility);
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the notes will effectively rank junior to all liabilities of our
subsidiaries. As of July 2, 2010, our subsidiaries had
approximately $491 million of outstanding liabilities,
including trade payables but excluding intercompany liabilities
and deferred revenue;
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the 20 notes initially will be limited to
$ aggregate principal amount
(subject to the rights of Symantec to issue additional notes as
described under Further Issuances below);
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the 20 notes initially will be limited to
$ aggregate principal amount
(subject to the rights of Symantec to issue additional notes as
described under Further Issuances below);
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the 20 notes will accrue interest at a rate
of % per year;
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the 20 notes will accrue interest at a rate
of % per year;
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the 20 notes will mature
on ,
20 unless redeemed or repurchased prior to that date;
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the 20 notes will mature
on ,
20 unless redeemed or repurchased prior to that date;
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interest will accrue on the notes from the most recent interest
payment date to or for which interest has been paid or duly
provided for (or if no interest has been paid or duly provided
for, from the issue date of the notes), payable semiannually in
arrears
on
and
of each year, beginning
on ,
2011;
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Symantec may redeem the notes, in whole or in part, at any time
at its option as described under Optional
Redemption below;
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Symantec may be required to repurchase the notes in whole or in
part at your option in connection with the occurrence of a
change of control repurchase event as described
under Purchase of Notes upon a Change of
Control Repurchase Event below;
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the notes will be issued in registered form in denominations of
$2,000 and integral multiples of $1,000 in excess thereof;
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the notes will be represented by one or more global notes
registered in the name of a nominee of DTC, but in certain
circumstances may be represented by notes in definitive form
(see Book-entry; Delivery and Form; Global
Notes below); and
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the notes will be exchangeable and transferable at the office or
agency of Symantec maintained for such purposes (which initially
will be the corporate trust office of the trustee).
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Interest on the notes will be paid to the person in whose name
that note is registered at the close of business
on
or ,
as the case may be, immediately preceding the relevant interest
payment date. Interest on the notes will be computed on the
basis of a
360-day year
comprised of twelve
30-day
months.
If any interest or other payment date of a note falls on a day
that is not a business day, the required payment of principal,
premium, if any, or interest will be due on the next succeeding
business day as if made on the date that the payment was due,
and no interest will accrue on that payment for the period from
and after that interest or other payment date, as the case may
be, to the date of that payment on the next succeeding business
day. The term business day when used with respect to
any note, means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in Los
Angeles, California (or such other place of payment as may be
subsequently specified by Symantec) are authorized or obligated
by law or executive order to close.
The notes will not be subject to any sinking fund.
Symantec may, subject to compliance with applicable law, at any
time purchase notes in the open market or otherwise.
Payment
and Transfer or Exchange
Principal of and premium, if any, and interest on the notes will
be payable, and the notes may be exchanged or transferred, at
the office or agency maintained by Symantec for such purpose
(which initially will be the corporate trust office of the
trustee located at 625 Marquette Avenue, Minneapolis,
Minnesota 55402). Payment of principal of and premium, if any,
and interest on a global note registered in the name of or held
by The Depository Trust Company (DTC) or its
nominee will be made in immediately available funds to DTC or
its nominee, as the case may be, as the registered holder of
such global note. If the notes are no longer represented by a
global note, payment of interest on certificated notes in
definitive form may, at the option of Symantec, be made by
(i) check mailed directly to holders at their registered
addresses or (ii) upon request of any holder of at least
$1,000,000 principal amount of notes, wire transfer to an
account located in the United States maintained by the payee.
See Book-entry; Delivery and Form; Global
Notes below.
A holder may transfer or exchange any certificated notes in
definitive form at the same location set forth in the preceding
paragraph. No service charge will be made for any registration
of transfer or exchange of notes, but Symantec may require
payment of a sum sufficient to cover any transfer tax or other
similar governmental charge payable in connection therewith.
Symantec is not required to transfer or exchange any note
selected for redemption during a period of 15 days before
mailing of a notice of redemption of notes to be redeemed.
The registered holder of a note will be treated as the owner of
that note for all purposes.
All amounts of principal of and premium, if any, and interest on
the notes paid by Symantec that remain unclaimed two years after
such payment was due and payable will be repaid to Symantec, and
the holders of such notes will thereafter look solely to
Symantec for payment.
Ranking
The notes will be senior unsecured obligations of Symantec and
will rank equally in right of payment with all existing and
future unsecured and unsubordinated obligations of Symantec,
including Symantecs 0.75% Convertible Senior Notes
due 2011 and 1.00% Convertible Senior Notes due 2013 and
indebtedness we may incur from time to time under the 2010
credit facility.
The notes will effectively rank junior to all existing and
future secured indebtedness of Symantec to the extent of the
assets securing such indebtedness, and to all liabilities of its
subsidiaries. As of July 2, 2010, Symantec did not
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have any outstanding secured indebtedness. Symantec derives a
portion of its operating income and cash flow from its
investments in its subsidiaries. Therefore, Symantecs
ability to make payments when due to the holders of the notes
is, in large part, dependent upon the receipt of sufficient
funds from its subsidiaries. As of July 2, 2010,
Symantecs subsidiaries had approximately $491 million
of outstanding liabilities, including trade payables but
excluding intercompany liabilities and deferred revenue. In
addition, certain of our subsidiaries are guarantors under the
2010 credit facility, under which we have made no borrowings as
of the date of this prospectus supplement.
Claims of creditors of Symantecs subsidiaries generally
will have priority with respect to the assets and earnings of
such subsidiaries over the claims of Symantecs creditors,
including holders of the notes. Accordingly, the notes will be
effectively subordinated to creditors, including trade creditors
and preferred stockholders, if any, of Symantecs
subsidiaries.
Optional
Redemption
Symantec may redeem the notes of each series at its option at
any time, either in whole or in part. If Symantec elects to
redeem the notes, it will pay a redemption price equal to the
greater of the following amounts, plus, in each case, accrued
and unpaid interest thereon to, but not including, the
redemption date:
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100% of the aggregate principal amount of the notes to be
redeemed; or
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the sum of the present values of the Remaining Scheduled
Payments.
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In determining the present values of the Remaining Scheduled
Payments, Symantec will discount such payments to the redemption
date on a semi-annual basis (assuming a
360-day year
consisting of twelve
30-day
months) using a discount rate equal to the Treasury Rate
plus %
( basis
points) for the 20 notes
and %
(
basis points) for the 20 notes.
The following terms are relevant to the determination of the
redemption price.
Treasury Rate means, with respect to any
redemption date, the rate per annum equal to the semi-annual
equivalent yield to maturity (computed as of the third business
day immediately preceding that redemption date) of the
applicable Comparable Treasury Issue. In determining this rate,
Symantec will assume a price for the applicable Comparable
Treasury Issue (expressed as a percentage of its principal
amount) equal to the applicable Comparable Treasury Price for
such redemption date.
Comparable Treasury Issue means the United
States Treasury security selected by an Independent Investment
Banker as having an actual or interpolated maturity comparable
to the remaining term of the applicable notes to be redeemed
that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to
the remaining term of such notes.
Independent Investment Banker means
J.P. Morgan Securities LLC, Morgan Stanley & Co.
Incorporated or UBS Securities LLC, or their respective
successors as may be appointed from time to time by Symantec;
provided, however, that if any of the foregoing ceases to be a
primary U.S. Government securities dealer in the United
States (a primary treasury dealer), Symantec will
substitute another primary treasury dealer.
Comparable Treasury Price means, with respect
to any redemption date, (1) the arithmetic average of the
applicable Reference Treasury Dealer Quotations for such
redemption date after excluding the highest and lowest Reference
Treasury Dealer Quotations, or (2) if Symantec obtains
fewer than four applicable Reference Treasury Dealer Quotations,
the arithmetic average of all applicable Reference Treasury
Dealer Quotations for such redemption date.
Reference Treasury Dealer Quotations means,
with respect to each Reference Treasury Dealer and any
redemption date, the arithmetic average, as determined by
Symantec, of the bid and asked prices for the applicable
Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to
Symantec by such Reference Treasury Dealer as of 3:30 p.m.,
New York City time, on the third business day preceding such
redemption date.
S-23
Reference Treasury Dealer means
J.P. Morgan Securities LLC, Morgan Stanley & Co.
Incorporated and UBS Securities LLC and two other primary
treasury dealers selected by Symantec, and each of their
respective successors and any other primary treasury dealers
selected by Symantec.
Remaining Scheduled Payments means, with
respect to any note to be redeemed, the remaining scheduled
payments of the principal thereof and interest thereon that
would be due after the related redemption date but for such
redemption; provided, however, that, if such redemption date is
not an interest payment date with respect to such note, the
amount of the next scheduled interest payment thereon will be
reduced by the amount of interest accrued thereon to such
redemption date.
A partial redemption of the notes of each series may be effected
pro rata or by lot and may provide for the selection for
redemption of portions (equal to the minimum authorized
denomination for the notes or any integral multiple thereof) of
the principal amount of notes of a denomination larger than the
minimum authorized denomination for the notes.
Notice of any redemption will be mailed at least 30 days
but not more than 60 days before the redemption date to
each holder of the notes to be redeemed.
Unless Symantec defaults in payment of the redemption price, on
and after the redemption date interest will cease to accrue on
the notes, or portions thereof, called for redemption.
Purchase
of Notes upon a Change of Control Repurchase Event
If a change of control repurchase event occurs, unless Symantec
has exercised its right to redeem the 20 notes or
20 notes as described above, Symantec will be
required to make an offer to each holder of the applicable notes
to repurchase all or any part (in excess of $2,000 and in
integral multiples of $1,000) of that holders
20 notes or 20 notes, as applicable, at
a repurchase price in cash equal to 101% of the aggregate
principal amount of the notes repurchased plus any accrued and
unpaid interest on the notes repurchased to, but not including,
the date of repurchase. Within 30 days following any change
of control repurchase event or, at the option of Symantec, prior
to any change of control, but after the public announcement of
the change of control, Symantec will mail a notice to each
holder, with a copy to the trustee, describing the transaction
or transactions that constitute or may constitute the change of
control repurchase event and offering to repurchase the notes on
the payment date specified in the notice, which date will be no
earlier than 30 days and no later than 60 days from
the date such notice is mailed. The notice shall, if mailed
prior to the date of consummation of the change of control,
state that the offer to purchase is conditioned on a change of
control repurchase event occurring on or prior to the payment
date specified in the notice. Symantec will comply with the
requirements of
Rule 14e-1
under the Exchange Act, and any other securities laws and
regulations thereunder to the extent those laws and regulations
are applicable in connection with the repurchase of the notes as
a result of a change of control repurchase event. To the extent
that the provisions of any securities laws or regulations
conflict with the change of control repurchase event provisions
of the notes, Symantec will comply with the applicable
securities laws and regulations and will not be deemed to have
breached its obligations under the change of control repurchase
event provisions of the notes by virtue of such conflict.
On the repurchase date following a change of control repurchase
event, Symantec will, to the extent lawful:
(1) accept for payment all the notes or portions of the
notes properly tendered pursuant to its offer;
(2) deposit with the paying agent an amount equal to the
aggregate purchase price in respect of all the notes or portions
of the notes properly tendered; and
(3) deliver or cause to be delivered to the trustee the
notes properly accepted, together with an officers
certificate stating the aggregate principal amount of notes
being purchased by Symantec.
The paying agent will promptly mail to each holder of notes
properly tendered the purchase price for the notes, and the
trustee will promptly authenticate and mail (or cause to be
transferred by book-entry) to each holder a new note equal in
principal amount to any unpurchased portion of any notes
surrendered.
Symantec will not be required to make an offer to repurchase the
notes upon a change of control repurchase event if a third party
makes such an offer in the manner, at the times and otherwise in
compliance with the
S-24
requirements for an offer made by Symantec and such third party
purchases all notes properly tendered and not withdrawn under
its offer.
The change of control repurchase event feature of the notes may
in certain circumstances make more difficult or discourage a
sale or takeover of Symantec and, thus, the removal of incumbent
management. The change of control repurchase event feature is a
result of negotiations between Symantec and the underwriters.
Symantec has no present intention to engage in a transaction
involving a change of control, although it is possible that
Symantec could decide to do so in the future. Subject to the
limitations discussed below, Symantec could, in the future,
enter into certain transactions, including acquisitions,
refinancings or other recapitalizations, that would not
constitute a change of control under the indenture, but that
could increase the amount of indebtedness outstanding at such
time or otherwise affect the capital structure of Symantec or
credit ratings of the notes. Restrictions on the ability of
Symantec to incur liens and enter into sale and leaseback
transactions are contained in the covenants as described under
Certain Covenants Limitation on
Liens and Certain Covenants
Limitation on Sale and Leaseback Transactions. Except for
the limitations contained in such covenants and the covenant
relating to repurchases upon the occurrence of a change of
control repurchase event, however, the indenture will not
contain any covenants or provisions that may afford holders of
the notes protection in the event of a highly leveraged
transaction.
The phrase all or substantially all, as used with
respect to the assets of Symantec and its subsidiaries in the
definition of change of control, is subject to
interpretation under applicable state law, and its applicability
in a given instance would depend upon the facts and
circumstances. As a result, there may be a degree of uncertainty
in ascertaining whether a sale or transfer of all or
substantially all the assets of Symantec and its
subsidiaries has occurred in a particular instance, in which
case a holders ability to obtain the benefit of these
provisions could be unclear. In addition, it should be noted
that recent case law suggests that, in the event that incumbent
directors are replaced as a result of a contested election,
issuers may nevertheless avoid triggering a change of control
under a clause similar to clause (4) of the definition of
change of control, if the outgoing directors were to
approve the new directors for the purpose of such change of
control clause.
Symantec may not have sufficient funds to repurchase all the
notes upon a change of control repurchase event. In addition,
even if it has sufficient funds, Symantec may be prohibited from
repurchasing the notes under the terms of its future debt
instruments. Furthermore, a change of control could constitute
an event of default under our 2010 credit facility. See
Risk Factors Risks Related to the
Notes We may not be able to repurchase all of the
notes upon a change of control repurchase event.
For purposes of the foregoing discussion of a repurchase at the
option of holders, the following definitions are applicable:
change of control means the occurrence of any
of the following: (1) the direct or indirect sale,
transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related
transactions, of all or substantially all of the properties or
assets of Symantec and its subsidiaries taken as a whole to any
person (as that term is used in
Section 13(d)(3) of the Exchange Act) other than Symantec
or one of its subsidiaries; (2) the adoption of a plan
relating to Symantecs liquidation or dissolution;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is
that any person (as defined above) becomes the
beneficial owner, directly or indirectly, of more than 50% of
the then outstanding number of shares of voting stock of
Symantec; (4) the first day on which a majority of the
members of the board of directors of Symantec are not continuing
directors; or (5) Symantec consolidates with, or merges
with or into, any person, or any person consolidates with, or
merges with or into, Symantec, in any such event pursuant to a
transaction in which any of the outstanding voting stock of
Symantec or the outstanding voting stock of such other person is
converted into or exchanged for cash, securities or other
property, other than any such transaction where the shares of
Symantecs voting stock outstanding immediately prior to
such transaction constitute, or are converted into or exchanged
for, a majority of the voting stock of the surviving person
immediately after giving effect to such transaction.
change of control repurchase event means the
occurrence of both a change of control and a ratings event.
S-25
continuing directors means, as of any date of
determination, any member of the board of directors of Symantec
who (1) was a member of such board of directors on the date
of the issuance of the notes; or (2) was nominated for
election or elected to such board of directors with the approval
of a majority of the continuing directors who were members of
such board of directors at the time of such nomination or
election.
investment grade means a rating of Baa3 or
better by Moodys (or its equivalent under any successor
rating categories of Moodys); a rating of BBB-or better by
S&P (or its equivalent under any successor rating
categories of S&P); and the equivalent investment grade
credit rating from any additional rating agency or rating
agencies selected by Symantec.
Moodys means Moodys Investors
Service Inc.
rating agency means (1) each of
Moodys and S&P; and (2) if either of
Moodys or S&P ceases to rate the notes or fails to
make a rating of the notes publicly available for reasons
outside of the control of Symantec, a nationally
recognized statistical rating organization within the
meaning of
Rule 15c3-l(e)(2)(vi)(F)
under the Exchange Act, selected by Symantec (as certified by a
resolution of the board of directors of Symantec) as a
replacement agency for Moodys or S&P, or both, as the
case may be.
rating category means (i) with respect
to S&P, any of the following categories: BBB, BB, B, CCC,
CC, C and D (or equivalent successor categories); (ii) with
respect to Moodys, any of the following categories: Baa,
Ba, B, Caa, Ca, C and D (or equivalent successor categories);
and (iii) the equivalent of any such category of S&P
or Moodys used by another rating agency. In determining
whether the rating of the notes has decreased by one or more
gradations, gradations within rating categories (+
and − for S&P; 1, 2 and 3 for Moodys; or
the equivalent gradations for another rating agency) shall be
taken into account (e.g., with respect to S&P, a decline in
a rating from BB+ to BB, as well as from BB − to B+,
will constitute a decrease of one gradation).
ratings event means, with respect to each of
the 20 notes and the 20 notes, the occurrence of the events
described in (a), (b) or (c) below during the period
commencing on the date of the first public announcement by
Symantec of any change of control (or pending change of control)
(the rating date) and ending 60 days following
consummation of such change of control (which period shall be
extended so long as the rating of the notes is under publicly
announced consideration for a possible downgrade by any of the
rating agencies): (a) in the event the applicable series of
notes are rated by both rating agencies on the rating date as
investment grade, the rating of such notes shall be reduced so
that such notes are rated below investment grade by both rating
agencies, (b) in the event the applicable series of notes
(1) are rated investment grade by one rating agency and
below investment grade by the other rating agency on the rating
date, the rating of such notes by such rating agency rating such
notes as investment grade shall be decreased by one or more
gradations (including gradations within rating categories, as
well as between rating categories) so that such notes are then
rated below investment grade by both rating agencies or
(2) are rated below investment grade by both rating
agencies on the rating date, the rating of such notes by either
rating agency shall be decreased by one or more gradations
(including gradations within rating categories, as well as
between rating categories) or (c) fewer than two rating
agencies provide a rating for the applicable series of notes.
S&P means Standard &
Poors Ratings Services, a division of The McGraw-Hill
Companies, Inc.
voting stock of any specified
person (as that term is used in
Section 13(d)(3) of the Exchange Act) as of any date means
the capital stock of such person that is at the time entitled to
vote generally in the election of the board of directors of such
person.
Further
Issuances
Symantec may from time to time, without notice to or the consent
of the holders of the notes, create and issue additional
20 notes or 20 notes having the same
terms as, and ranking equally and ratably with, the
20 notes or the 20 notes, as applicable,
in all respects (except for the issue date and, if applicable,
the payment of interest accruing prior to the issue date of such
additional notes and the first payment of interest following the
issue date of such additional notes); provided that Symantec has
received an opinion of counsel confirming that the holders of
outstanding notes will be subject to federal income tax in the
same amounts, in the same manner and at the same times as would
have been the case if such additional notes were not issued.
Such additional notes may be
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consolidated and form a single series with, and will have the
same terms as to ranking, redemption, waivers, amendments or
otherwise, as the 20 notes or the 20
notes, as applicable, and will vote together as one class on all
matters with respect to the 20 notes or the
20 notes, as the case may be.
Certain
Covenants
Except as set forth below, neither Symantec nor any of its
subsidiaries will be restricted by the indenture from:
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incurring any indebtedness or other obligation,
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paying dividends or making distributions on the capital stock of
Symantec or of such subsidiaries, or
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purchasing or redeeming capital stock of Symantec or such
subsidiaries.
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In addition, Symantec will not be required to maintain any
financial ratios or specified levels of net worth or liquidity
or to repurchase or redeem or otherwise modify the terms of the
notes upon a change of control or other events involving
Symantec or any of its subsidiaries which may adversely affect
the creditworthiness of the notes, except to the limited extent
provided under Purchase of Notes upon a Change
of Control Repurchase Event. Among other things, the
indenture will not contain covenants designed to afford holders
of the notes any protections in the event of a highly leveraged
or other transaction involving Symantec that may adversely
affect holders of the notes, except to the limited extent
provided under Purchase of Notes upon a Change
of Control Repurchase Event.
The indenture will contain the following principal covenants:
Limitation
on Liens
Symantec will not directly or indirectly incur, and will not
permit any of its wholly owned subsidiaries to directly or
indirectly incur, any indebtedness secured by a mortgage,
security interest, pledge, lien, charge or other similar
encumbrance (collectively, Liens) upon (a) any
Principal Property of Symantec or any of its wholly owned
subsidiaries or (b) any shares of stock or indebtedness of
any of its wholly owned subsidiaries (whether such Principal
Property, shares or indebtedness are now existing or owned or
hereafter created or acquired), in each case, unless prior to or
at the same time, the notes (together with, at the option of
Symantec, any other indebtedness or guarantees of Symantec or
any of its subsidiaries ranking equally in right of payment with
the notes or such guarantee) are equally and ratably secured
with or, at the option of Symantec, prior to, such secured
indebtedness.
The foregoing restriction does not apply to:
(1) Liens on property, shares of stock or indebtedness
existing with respect to any person at the time such person
becomes a subsidiary of Symantec or a subsidiary of any
subsidiary of Symantec, provided that such Lien was not incurred
in anticipation of such person becoming a subsidiary;
(2) Liens on property, shares of stock or indebtedness
existing at the time of acquisition by Symantec or any of its
subsidiaries or a subsidiary of any subsidiary of Symantec of
such property, shares of stock or indebtedness (which may
include property previously leased by Symantec or any of its
subsidiaries and leasehold interests on such property, provided
that the lease terminates prior to or upon the acquisition) or
Liens on property, shares of stock or indebtedness to secure the
payment of all or any part of the purchase price of such
property, shares of stock or indebtedness, or Liens on property,
shares of stock or indebtedness to secure any indebtedness for
borrowed money incurred prior to, at the time of, or within
18 months after, the latest of the acquisition of such
property, shares of stock or indebtedness or, in the case of
property, the completion of construction, the completion of
improvements or the commencement of substantial commercial
operation of such property for the purpose of financing all or
any part of the purchase price of the property and related costs
and expenses, the construction or the making of the improvements;
(3) Liens securing indebtedness of Symantec or any of
Symantecs subsidiaries owing to Symantec or any of its
subsidiaries;
(4) Liens existing on the date of the initial issuance of
the notes (other than any additional notes);
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(5) Liens on property or assets of a person existing at the
time such person is merged into or consolidated with Symantec or
any of its subsidiaries, at the time such person becomes a
subsidiary of Symantec, or at the time of a sale, lease or other
disposition of all or substantially all of the properties or
assets of a person to Symantec or any of its subsidiaries,
provided that such Lien was not incurred in anticipation of the
merger, consolidation, or sale, lease, other disposition or
other such transaction;
(6) Liens created in connection with a project financed
with, and created to secure, a Non-recourse Obligation;
(7) Liens created to secure the notes;
(8) Liens imposed by law, such as carriers,
warehousemens and mechanics Liens and other similar
Liens, in each case for sums not yet overdue by more than 30
calendar days or being contested in good faith by appropriate
proceedings or other Liens arising out of judgments or awards
against such Person with respect to which such Person shall then
be proceeding with an appeal or other proceedings for review and
Liens arising solely by virtue of any statutory or common law
provision relating to bankers Liens, rights of set-off or
similar rights and remedies as to deposit accounts or other
funds maintained with a creditor depository institution;
(9) Liens for taxes, assessments or other governmental
charges not yet due or payable or subject to penalties for
non-payment or which are being contested in good faith by
appropriate proceedings;
(10) Liens to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like
nature; or
(11) any extensions, renewals or replacements of any Lien
referred to in clauses (1) through (10) without
increase of the principal of the indebtedness secured by such
Lien (except to the extent of any fees or other costs associated
with any such extension, renewal or replacement); provided,
however, that any Liens permitted by any of clauses (1)
through (10) shall not extend to or cover any property of
Symantec or any of its subsidiaries, as the case may be, other
than the property specified in such clauses and improvements to
such property.
Notwithstanding the restrictions set forth in the preceding
paragraph, Symantec and its wholly owned subsidiaries will be
permitted to incur indebtedness secured by Liens which would
otherwise be subject to the foregoing restrictions without
equally and ratably securing the notes, provided that, after
giving effect to such indebtedness, the aggregate amount of all
indebtedness secured by Liens (not including Liens permitted
under clauses (1) through (11) above), together with
all attributable debt outstanding pursuant to the second
paragraph of the Limitation on Sale and
Leaseback Transactions covenant described below, does not
exceed 15% of the Consolidated Net Tangible Assets of Symantec
calculated as of the date of the creation or incurrence of the
Lien. Symantec and its subsidiaries also may, without equally
and ratably securing the notes, create or incur Liens that
extend, renew, substitute or replace (including successive
extensions, renewals, substitutions or replacements), in whole
or in part, any Lien permitted pursuant to the preceding
sentence.
Limitation
on Sale and Leaseback Transactions
Symantec will not directly or indirectly, and will not permit
any of its wholly owned subsidiaries directly or indirectly to,
enter into any sale and leaseback transaction for the sale and
leasing back of any property, whether now owned or hereafter
acquired, unless:
(1) such transaction was entered into prior to the date of
the initial issuance of the notes (other than any additional
notes);
(2) such transaction was for the sale and leasing back to
Symantec or any of its wholly owned subsidiaries of any property
by one of its subsidiaries;
(3) such transaction involves a lease for not more than
three years (or which may be terminated by Symantec or its
subsidiaries within a period of not more than three years);
S-28
(4) Symantec would be entitled to incur indebtedness
secured by a Lien with respect to such sale and leaseback
transaction without equally and ratably securing the notes
pursuant to the second paragraph of the
Limitation on Liens covenant described
above; or
(5) Symantec applies an amount equal to the net proceeds
from the sale of such property to the purchase of other property
or assets used or useful in its business or to the retirement of
long-term indebtedness within 365 days before or after the
effective date of any such sale and leaseback transaction,
provided that, in lieu of applying such amount to the retirement
of long-term indebtedness, Symantec may deliver notes to the
trustee for cancellation, such notes to be credited at the cost
thereof to it.
Notwithstanding the restrictions set forth in the preceding
paragraph, Symantec and its wholly owned subsidiaries may enter
into any sale and leaseback transaction which would otherwise be
subject to the foregoing restrictions, if after giving effect
thereto the aggregate amount of all attributable debt with
respect to such transactions, together with all indebtedness
outstanding pursuant to the third paragraph of the
Limitation on Liens covenant described
above, does not exceed 15% of the Consolidated Net Tangible
Assets of Symantec calculated as of the closing date of the sale
and leaseback transaction.
Events of
Default
Each of the following, in addition to the events of default
described in the accompanying prospectus, is an event of
default under the indenture with respect to the notes:
(1) a failure to pay principal of or premium, if any, on
any note when due at its stated maturity date, upon optional
redemption or otherwise;
(2) a failure by Symantec to repurchase notes tendered for
repurchase following the occurrence of a change of control
repurchase event in conformity with the covenant set forth under
Purchase of Notes upon a Change of Control Repurchase
Event; and
(3) (a) a failure to make any payment at maturity,
including any applicable grace period, on any indebtedness of
Symantec (other than indebtedness of Symantec owing to any of
its subsidiaries) outstanding in an amount in excess of
$100 million and continuance of this failure to pay or
(b) a default on any indebtedness of Symantec (other than
indebtedness owing to any of its subsidiaries), which default
results in the acceleration of such indebtedness in an amount in
excess of $100 million without such indebtedness having
been discharged or the acceleration having been cured, waived,
rescinded or annulled, in the case of clause (a) or
(b) above, for a period of 30 days after written
notice thereof to Symantec by the trustee or to Symantec and the
trustee by the holders of not less than 25% in principal amount
of outstanding notes (including any additional notes); provided,
however, that if any failure, default or acceleration referred
to in clause (a) or (b) above ceases or is cured,
waived, rescinded or annulled, then the event of default will be
deemed cured.
Definitions
The indenture contains the following defined terms:
attributable debt means, with respect to any
sale and leaseback transaction, at the time of determination,
the lesser of (1) the sale price of the property so leased
multiplied by a fraction the numerator of which is the remaining
portion of the base term of the lease included in such
transaction and the denominator of which is the base term of
such lease, and (2) the total obligation (discounted to the
present value at the implicit interest factor, determined in
accordance with GAAP, included in the rental payments) of the
lessee for rental payments (other than amounts required to be
paid on account of property taxes as well as maintenance,
repairs, insurance, water rates and other items which do not
constitute payments for property rights) during the remaining
portion of the base term of the lease included in such
transaction.
Consolidated Net Tangible Assets means, as of
the time of determination, the aggregate amount of the assets of
Symantec and the assets of its consolidated subsidiaries after
deducting (1) all goodwill, trade names, trademarks,
service marks, patents, unamortized debt discount and expense
and other intangible assets and (2) all current
liabilities, as reflected on the most recent consolidated
balance sheet prepared by Symantec in
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accordance with GAAP contained in an annual report on
Form 10-K
or a quarterly report on
Form 10-Q
timely filed or any amendment thereto (and not subsequently
disclaimed as not being reliable by Symantec) pursuant to the
Exchange Act by Symantec prior to the time as of which
Consolidated Net Tangible Assets is being determined.
GAAP means generally accepted accounting
principles in the United States of America in effect from time
to time.
guarantee means any obligation, contingent or
otherwise, of any person directly or indirectly guaranteeing any
indebtedness of any other person and any obligation, direct or
indirect, contingent or otherwise, of such person (1) to
purchase or pay (or advance or supply funds for the purchase or
payment of) such indebtedness of such other person (whether
arising by virtue of partnership arrangements, or by agreement
to keep well, to purchase assets, goods, securities or services,
to take or pay or to maintain financial statement conditions or
otherwise) or (2) entered into for purposes of assuring in
any other manner the obligee of such indebtedness of the payment
thereof or to protect such obligee against loss in respect
thereof (in whole or in part); provided, however, that the term
guarantee will not include endorsements for
collection or deposit in the ordinary course of business. The
term guarantee, when used as a verb, has a
correlative meaning.
incur means issue, assume, guarantee or
otherwise become liable for.
indebtedness means, with respect to any
person, obligations (other than Non-recourse Obligations) of
such person for borrowed money (including, without limitation,
indebtedness for borrowed money evidenced by notes, bonds,
debentures or similar instruments).
Non-recourse Obligation means indebtedness or
other obligations substantially related to (1) the
acquisition of assets not previously owned by Symantec or any
direct or indirect subsidiaries of Symantec or (2) the
financing of a project involving the development or expansion of
properties of Symantec or any direct or indirect subsidiaries of
Symantec, as to which the obligee with respect to such
indebtedness or obligation has no recourse to Symantec or any
direct or indirect subsidiary of Symantec or such
subsidiarys assets other than the assets which were
acquired with the proceeds of such transaction or the project
financed with the proceeds of such transaction (and the proceeds
thereof).
person means any individual, corporation,
partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated
organization or government or political subdivision thereof.
Principal Property means our principal
offices in Mountain View, California, each research and
development facility and each service and support facility (in
each case including associated office facilities) located within
the territorial limits of the States of the United States of
America owned by us or any of our wholly owned subsidiaries,
except such as our board of directors by resolution determines
in good faith (taking into account, among other things, the
importance of such property to the business, financial condition
and earnings of us and our subsidiaries taken as a whole) not to
be of material importance to the business of us and our
subsidiaries, taken as a whole.
subsidiary means, with respect to any person
(the parent) at any date, any corporation, limited
liability company, partnership, association or other entity the
accounts of which would be consolidated with those of the parent
in the parents consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of
that date, as well as any other corporation, limited liability
company, partnership, association or other entity of which
securities or other ownership interests representing more than
50% of the equity or more than 50% of the ordinary voting power
or, in the case of a partnership, more than 50% of the general
partnership interests are, as of that date, owned, controlled or
held by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.
S-30
Modification
Without Consent of Holders
Symantec and the trustee may, without the consent of any
holders, change the indenture for any of the following purposes:
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to evidence the succession of another person to Symantec and the
assumption by any such successor of the covenants of Symantec
under the indenture and the notes;
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to add to the covenants of Symantec for the benefit of holders
of the notes or to surrender any right or power conferred upon
Symantec;
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to add any additional events of default for the benefit of
holders of the notes;
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to add to or change any of the provisions of the indenture as
necessary to permit or facilitate the issuance of notes in
bearer form, registrable or not registrable as to principal, and
with or without interest coupons, or to permit or facilitate the
issuance of notes in uncertificated form;
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to secure the notes;
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to add or appoint a successor or separate trustee;
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to cure any ambiguity, defect or inconsistency, provided that
the interests of the holders of the notes are not adversely
affected in any material respect; or
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to supplement any of the provisions of the indenture as
necessary to permit or facilitate the defeasance and discharge
of any notes, provided that the interests of the holders of the
notes are not adversely affected in any material respect.
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For a description of other provisions related to modifications
to, and waivers under, the indenture, see the section captioned,
Modification and Waiver in the accompanying
prospectus.
Same-day
Settlement and Payment
The notes will trade in the
same-day
funds settlement system of DTC until maturity or until Symantec
issues the notes in certificated form. DTC will therefore
require secondary market trading activity in the notes to settle
in immediately available funds. Symantec can give no assurance
as to the effect, if any, of settlement in immediately available
funds on trading activity in the notes.
Book-entry;
Delivery and Form; Global Notes
The notes will be represented by one or more global notes in
definitive, fully registered form without interest coupons. Each
global note will be deposited with the trustee as custodian for
DTC and registered in the name of a nominee of DTC in New York,
New York for the accounts of participants in DTC.
Investors may hold their interests in a global note directly
through DTC if they are DTC participants, or indirectly through
organizations that are DTC participants. Except in the limited
circumstances described below, holders of notes represented by
interests in a global note will not be entitled to receive their
notes in fully registered certificated form.
DTC has advised as follows: DTC is a limited-purpose trust
company organized under New York Banking Law, a banking
organization within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a clearing
corporation within the meaning of the New York Uniform
Commercial Code and a clearing agency registered
pursuant to the provisions of Section 17A of the Exchange
Act. DTC was created to hold securities of institutions that
have accounts with DTC (participants) and to
facilitate the clearance and settlement of securities
transactions among its participants in such securities through
electronic book-entry changes in accounts of the participants,
thereby eliminating the need for physical movement of securities
certificates. DTCs participants include securities brokers
and dealers (which may include the initial purchasers), banks,
trust companies, clearing corporations and certain other
organizations. Access to DTCs book-entry system is also
available to others such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial
relationship with a participant, whether directly or indirectly.
S-31
Ownership
of Beneficial Interests
Upon the issuance of each global note, DTC will credit, on its
book-entry registration and transfer system, the respective
principal amount of the individual beneficial interests
represented by the global note to the accounts of participants.
Ownership of beneficial interests in each global note will be
limited to participants or persons that may hold interests
through participants. Ownership of beneficial interests in each
global note will be shown on, and the transfer of those
ownership interests will be effected only through, records
maintained by DTC (with respect to participants interests)
and such participants (with respect to the owners of beneficial
interests in the global note other than participants).
So long as DTC or its nominee is the registered holder and owner
of a global note, DTC or such nominee, as the case may be, will
be considered the sole legal owner of the notes represented by
the global note for all purposes under the indenture, the notes
and applicable law. Except as set forth below, owners of
beneficial interests in a global note will not be entitled to
receive certificated notes and will not be considered to be the
owners or holders of any notes under the global note. Symantec
understands that under existing industry practice, in the event
an owner of a beneficial interest in a global note desires to
take any actions that DTC, as the holder of the global note, is
entitled to take, DTC would authorize the participants to take
such action, and that participants would authorize beneficial
owners owning through such participants to take such action or
would otherwise act upon the instructions of beneficial owners
owning through them. No beneficial owner of an interest in a
global note will be able to transfer the interest except in
accordance with DTCs applicable procedures, in addition to
those provided for under the indenture. Because DTC can only act
on behalf of participants, who in turn act on behalf of others,
the ability of a person having a beneficial interest in a global
note to pledge that interest to persons that do not participate
in the DTC system, or otherwise to take actions in respect of
that interest, may be impaired by the lack of physical
certificate of that interest.
All payments on the notes represented by a global note
registered in the name of and held by DTC or its nominee will be
made to DTC or its nominee, as the case may be, as the
registered owner and holder of the global note.
Symantec expects that DTC or its nominee, upon receipt of any
payment of principal, premium, if any, or interest in respect of
a global note, will credit participants accounts with
payments in amounts proportionate to their respective beneficial
interests in the principal amount of the global note as shown on
the records of DTC or its nominee. Symantec also expects that
payments by participants to owners of beneficial interests in
the global note held through such participants will be governed
by standing instructions and customary practices as is now the
case with securities held for accounts for customers registered
in the names of nominees for such customers. These payments,
however, will be the responsibility of such participants and
indirect participants, and neither Symantec, the underwriters,
the trustee nor any paying agent will have any responsibility or
liability for any aspect of the records relating to, or payments
made on account of beneficial ownership interests in any global
note or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests or for any other
aspect of the relationship between DTC and its participants or
the relationship between such participants and the owners of
beneficial interests in the global note.
Unless and until it is exchanged in whole or in part for
certificated notes, each global note may not be transferred
except as a whole by DTC to a nominee of DTC or by a nominee of
DTC to DTC or another nominee of DTC. Transfers between
participants in DTC will be effected in the ordinary way in
accordance with DTC rules and will be settled in
same-day
funds.
Symantec expects that DTC will take any action permitted to be
taken by a holder of notes (including the presentation of notes
for exchange as described below) only at the direction of one or
more participants to whose account the DTC interests in a global
note are credited and only in respect of such portion of the
aggregate principal amount of the notes as to which such
participant or participants has or have given such direction.
Although Symantec expects that DTC will agree to the foregoing
procedures in order to facilitate transfers of interests in each
global note among participants of DTC, DTC is under no
obligation to perform or continue to perform such procedures,
and such procedures may be discontinued at any time. Neither
Symantec, the underwriters, nor the trustee will have any
responsibility for the performance or nonperformance by DTC or
their
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participants or indirect participants of their respective
obligations under the rules and procedures governing their
operations.
Under certain circumstances described in the accompanying
prospectus, DTC may exchange the global notes for notes in
certificated form of like tenor and of an equal principal
amount, in authorized denominations. These certificated notes
will be registered in such name or names as DTC shall instruct
the trustee. It is expected that such instructions may be based
upon directions received by DTC from participants with respect
to ownership of beneficial interests in global securities.
The information in this section concerning DTC and DTCs
book-entry system has been obtained from sources that Symantec
believes to be reliable, but Symantec does not take
responsibility for its accuracy.
Euroclear
and Clearstream, Luxembourg
If the depositary for a global security is DTC, you may hold
interests in the global notes through Clearstream Banking,
société anonyme, which is referred to as
Clearstream. Luxembourg, or Euroclear Bank
S.A./N.V., as operator of the Euroclear System, which is
referred to as Euroclear, in each case, as a
participant in DTC. Euroclear and Clearstream, Luxembourg will
hold interests, in each case, on behalf of their participants
through customers securities accounts in the names of
Euroclear and Clearstream, Luxembourg on the books of their
respective depositaries, which in turn will hold such interests
in customers securities in the depositaries names on
DTCs books.
Payments, deliveries, transfers, exchanges, notices and other
matters relating to the notes made through Euroclear or
Clearstream, Luxembourg must comply with the rules and
procedures of those systems. Those systems could change their
rules and procedures at any time. Symantec has no control over
those systems or their participants, and it takes no
responsibility for their activities. Transactions between
participants in Euroclear or Clearstream, Luxembourg, on the one
hand, and other participants in DTC, on the other hand, would
also be subject to DTCs rules and procedures.
Investors will be able to make and receive through Euroclear and
Clearstream, Luxembourg payments, deliveries, transfers,
exchanges, notices and other transactions involving any
securities held through those systems only on days when those
systems are open for business. Those systems may not be open for
business on days when banks, brokers and other institutions are
open for business in the United States.
In addition, because of time-zone differences,
U.S. investors who hold their interests in the notes
through these systems and wish, on a particular day, to transfer
their interests, or to receive or make a payment or delivery or
exercise any other right with respect to their interests, may
find that the transaction will not be effected until the next
business day in Luxembourg or Brussels, as applicable. Thus,
investors who wish to exercise rights that expire on a
particular day may need to act before the expiration date. In
addition, investors who hold their interests through both DTC
and Euroclear or Clearstream, Luxembourg may need to make
special arrangements to finance any purchase or sales of their
interests between the U.S. and European clearing systems,
and those transactions may settle later than transactions within
one clearing system.
Governing
Law
The indenture and the notes will be governed by, and construed
in accordance with, the laws of the State of New York.
Regarding
the Trustee
Wells Fargo Bank, National Association is the trustee under the
indenture and has also been appointed by Symantec to act as
registrar, transfer agent and paying agent for the notes. We and
our affiliates maintain various commercial and service
relationships with the trustee and its affiliates in the
ordinary course of business, including asset and investment
management and insurance services. In addition, the trustee is
the administrative agent for our 2010 credit facility and an
affiliate of the trustee is a joint lead arranger and joint
bookrunner for the 2010 credit facility.
S-33
UNITED
STATES FEDERAL INCOME TAX CONSIDERATIONS
The following discussion summarizes certain U.S. federal
income tax considerations that may be relevant to the purchase,
ownership and disposition of the notes. Except as discussed
under
Non-U.S. holders
and Information reporting and backup
withholding below, the discussion generally applies
only to holders of notes that are U.S. holders. You will be
a U.S. holder if you are (i) an individual who is a
citizen or resident of the United States for
U.S. federal income tax purposes, (ii) a corporation
(or other entity taxable as a corporation) created or organized
in or under the laws of the United States, any state thereof or
the District of Columbia; (iii) an estate, the income of
which is subject to U.S. federal income taxation regardless
of its source; or (iv) a trust if (A) a court within
the United States is able to exercise primary supervision over
the administration of the trust and one or more United States
persons have the authority to control all substantial decisions
of the trust or (B) the trust has in effect a valid
election under applicable Treasury Regulations to be treated as
a United States person for U.S. federal income tax
purposes. A
non-U.S. holder
is a beneficial owner of a note that is not a U.S. holder.
This summary applies only to those persons holding notes which:
(i) are held as capital assets and (ii) are purchased
by those initial holders who purchase notes at the issue
price, which will equal the first price at which a
substantial amount of the notes is sold for money to the public
(not including bond houses, brokers or similar persons or
organizations acting in the capacity of underwriters, placement
agents or wholesalers). It does not address considerations that
may be relevant to you if you are an investor that is subject to
special tax rules, such as a bank, thrift, real estate
investment trust, regulated investment company, insurance
company, dealer in securities or currencies, trader in
securities or commodities that elects mark to market treatment,
person that will hold notes as a position in a
straddle, conversion or other integrated
transaction, tax-exempt organization, partnership or other
entity classified as a partnership for U.S. federal income
tax purposes, certain former citizens and residents, a person
who is liable for the alternative minimum tax, or a person whose
functional currency is not the U.S. dollar. If
an entity that is treated as partnership for U.S. federal
income tax purposes holds the notes, the tax treatment of a
partner generally will depend on the status of the partner and
the activities of the partnership. If you are a partner in such
an entity, you should consult your tax advisor. In addition,
this discussion does not describe any tax consequences arising
out of the tax laws of any state, local or foreign jurisdiction,
or, any possible applicability of U.S. federal gift or
estate tax.
This summary is based on the provisions of the Internal Revenue
Code of 1986, as amended, (the Code), and the
U.S. federal income tax regulations promulgated under the
Code, rulings and judicial decisions now in effect, all of which
may change. Any change could apply retroactively and could
affect the continued validity of this summary. There can be no
assurances that the Internal Revenue Service (IRS)
will not challenge one or more of the tax consequences described
herein, and we have not obtained, nor do we intend to obtain, a
ruling from the IRS with respect to the U.S. federal income
tax consequences of acquiring, holding or disposing of the notes.
You should consult your tax advisor about the tax consequences
of purchasing or holding notes, including the relevance to your
particular situation of the considerations discussed below, as
well as the relevance to your particular situation of state,
local, foreign or other tax laws.
Payments
or accruals of interest
Payments or accruals of interest on a note will be taxable to
you as ordinary income at the time that you actually or
constructively receive or accrue such amounts (in accordance
with your regular method of tax accounting).
Repurchase
options
In the event that there is a change of control, holders of notes
will have the right to require us to repurchase their notes at
101% of the principal amount plus accrued and unpaid interest,
if any (see Description of Notes Purchase of
Notes upon a Change of Control Repurchase Event). Further,
we may redeem the notes, in whole or in part, at our option (see
Description of Notes Optional
Redemption). If the amount or timing of any payment on a
note is contingent, the note could be subject to special rules
that apply to contingent payment debt instruments.
We intend to take the position that a payment upon a change of
control repurchase event or upon an optional redemption will not
cause a note to be treated as creating a contingent
payment debt instrument for purposes of the original issue
discount provisions of the Code. Our determination that the
notes are not contingent payment debt instruments is binding on
a U.S. holder unless such holder discloses its contrary
position in the manner required by
S-34
applicable Treasury Regulations. Our determination is not,
however, binding on the IRS, and if the IRS were to challenge
this determination, a U.S. holder, under the original issue
discount provisions of the Code and regulations, might be
required to accrue income on its notes in excess of stated
interest and prior to the receipt of cash, and may be required
to treat as ordinary income rather than as capital gain any
income realized on the taxable disposition of a note.
Purchase,
sale, redemption and retirement of notes
Initially, your tax basis in a note generally will equal the
cost of the note to you. When you sell or exchange a note, or if
a note that you hold is retired or redeemed, you generally will
recognize gain or loss equal to the difference between the
amount you realize on the transaction (less any accrued
interest, which will be subject to tax in the manner described
above under Payments or accruals of
interest) and your tax basis in the note. Special
rules may apply to notes redeemed in part.
The gain or loss that you recognize on the sale, exchange,
redemption or retirement of a note generally will be capital
gain or loss. The capital gain or loss on the sale, exchange,
redemption or retirement of a note will be long-term capital
gain or loss if you have held the note for more than one year on
the date of disposition. Net long-term capital gain recognized
by an individual U.S. holder generally is subject to tax at
lower rates (which rates currently are scheduled to increase on
January 1, 2011) than net short-term capital gain or
ordinary income. The ability of U.S. holders to offset
capital losses against ordinary income is limited.
New
Legislation
Newly enacted legislation requires certain U.S. Holders who
are individuals, estates or trusts to pay an additional 3.8% tax
on, among other things, interest on and capital gains from the
sale or other disposition of notes for taxable years beginning
after December 31, 2012. U.S. holders should consult
their tax advisors regarding the effect, if any, of this
legislation on their ownership and disposition of the Notes.
Non-U.S.
holders
For purposes of the discussion below, interest and gain on the
sale, redemption or repayment of notes will be considered to be
U.S. trade or business income if such income or
gain is (i) effectively connected with the conduct of a
U.S. trade or business or (ii) in the case of a person
eligible for the benefits of a bilateral income tax treaty to
which the United States is a party, attributable to a
U.S. permanent establishment (or, in the case of an
individual, a fixed base) in the United States.
Subject to the discussion below regarding backup withholding,
interest paid on the notes to a non-resident alien individual,
foreign corporation, or foreign estate or trust (a
non-U.S. holder),
generally will not be subject to U.S. federal income or
withholding tax if such interest is not U.S. trade or
business income and is portfolio interest.
Generally, interest on the notes will qualify as portfolio
interest if the
non-U.S. holder
(i) does not actually or constructively own 10% or more of
the total combined voting power of all classes of our stock
entitled to vote, (ii) is not a controlled foreign
corporation (in general, a foreign corporation is a controlled
foreign corporation if more than 50% of its stock (by voting
power or value) is owned, actually or constructively, by one or
more U.S. persons that each owns, actually or
constructively, at least 10% of the corporations voting
power) with respect to which we are a related person
within the meaning of the Code, (iii) is not a bank that is
receiving the interest on a loan made in the ordinary course of
its trade or business, and (iv) either (a) certifies,
under penalties of perjury on a
Form W-8BEN
(or such successor form as the IRS designates), prior to the
payment that such holder is not a U.S. person and provides
such holders name and address, or (b) holds the note
through certain foreign intermediaries or certain foreign
partnerships and satisfies the certification requirements under
the applicable Treasury Regulations.
The gross amount of payments of interest that do not qualify for
the portfolio interest exception and that are not
U.S. trade or business income will be subject to
U.S. withholding tax at a rate of 30% unless a treaty
applies to reduce or eliminate withholding. U.S. trade or
business income will be taxed at regular, graduated
U.S. rates rather than the 30% gross rate. In the case of a
non-U.S. holder
that is a corporation, such U.S. trade or business income
may also be subject to the branch profits tax equal to 30% (or a
lower rate under an applicable income tax treaty
S-35
between the United States and the
non-U.S. holders
country of residence) of such amount, subject to adjustments. To
claim the benefits of a treaty exemption from or reduction in
withholding, a
non-U.S. holder
must provide a properly executed
Form W-8BEN
(or such successor form as the IRS designates), and to claim an
exemption from withholding because income is U.S. trade or
business income, a
non-U.S. holder
must provide a properly executed
Form W-8ECI
(or such successor form as the IRS designates), as applicable
prior to the payment of interest. These forms may need to be
periodically updated. A
non-U.S. holder
who is claiming the benefits of a treaty may be required in
certain instances to obtain and to provide a U.S. taxpayer
identification number (TIN) on a
Form W-8BEN.
Subject to the discussion below concerning backup withholding,
if you are a
non-U.S. holder,
any gain you realize on a sale, exchange, redemption or other
disposition of notes generally will be exempt from United States
federal income tax, including withholding tax. This exemption
will not apply to you if (i) the gain is U.S. trade or
business income, in which case the branch profits tax may also
apply if you are a corporate
non-U.S. holder,
(ii) you were a citizen or resident of the United States
and are subject to special rules that apply to expatriates or
(iii) you are an individual who is present in the United
States for 183 or more days in the taxable year of the
disposition and certain other requirements are met.
Special rules may apply to certain
non-U.S. holders
(or their beneficial owners), such as controlled foreign
corporations, passive foreign investment
companies, and certain expatriates, that are subject to
special treatment under the Code. Such
non-U.S. holders
(or their beneficial owners) should consult their own tax
advisors to determine the U.S. federal, state, local and
other tax consequences that may be relevant to them.
Information
reporting and backup withholding
If you are a U.S. holder, you will generally be subject to
information reporting and may also be subject to backup
withholding tax, currently at a rate of 28% (and is scheduled to
increase to 31% for payments made after December 31, 2010),
when you receive interest payments on the note or proceeds upon
the sale or other disposition of a note. Certain
U.S. holders (including, among others, corporations and
certain tax-exempt organizations) are generally not subject to
information reporting or backup withholding. In addition, the
backup withholding tax will not apply if you provide your TIN to
the payor in the prescribed manner unless: (A) the IRS
notifies us or our agent that the TIN you provided is incorrect;
(B) you fail to report interest and dividend payments that
you receive on your tax return and the IRS notifies us or our
agent that withholding is required; or (C) you fail to
certify under penalties of perjury that (i) you provided to
us with your correct TIN, (ii) you are not subject to
backup withholding, and (iii) you are a U.S. person
(including a U.S. resident alien).
Information returns will be filed with the IRS in connection
with payments on the notes to
non-U.S. holders.
If you are a
non-U.S. holder,
you may have to comply with certification procedures to
establish your
non-U.S. status
in order to avoid additional information reporting and backup
withholding tax requirements. The certification procedures
required to claim the exemption from withholding tax on interest
income described above will satisfy these certification
requirements.
The amount of any backup withholding from a payment to a holder
may be allowed as a credit against the holders
U.S. federal income tax liability and may entitle the
holder to a refund, provided that the required information is
furnished to the IRS.
THE PRECEDING DISCUSSION OF FEDERAL INCOME TAX CONSEQUENCES IS
FOR GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. ACCORDINGLY,
EACH INVESTOR SHOULD CONSULT HIS, HER OR ITS OWN TAX ADVISOR AS
TO PARTICULAR TAX CONSEQUENCES TO HIM, HER OR IT OF PURCHASING,
HOLDING AND DISPOSING OF NOTES, INCLUDING THE APPLICABILITY AND
EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS, AND OF ANY
PROPOSED CHANGES IN APPLICABLE LAW.
S-36
UNDERWRITING
Under the terms and subject to the conditions contained in an
underwriting agreement dated the date of this prospectus
supplement, the underwriters named below, for whom
J.P. Morgan Securities LLC, Morgan Stanley & Co.
Incorporated and UBS Securities LLC are acting as
representatives, have severally agreed to purchase, and Symantec
Corporation has agreed to sell to them, severally, the principal
amount of notes set forth opposite their names below:
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Principal
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Principal
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Underwriters
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Amount of 20 Notes
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Amount of 20 Notes
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J.P. Morgan Securities LLC
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$
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$
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Morgan Stanley & Co. Incorporated
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UBS Securities LLC
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Total
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$
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$
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The underwriters are offering the notes subject to their
acceptance of the notes from us and subject to prior sale. The
underwriting agreement provides that the obligations of the
several underwriters to pay for and accept delivery of the notes
offered by this prospectus supplement are subject to the
approval of certain legal matters by their counsel and to
certain other conditions. The underwriters are obligated to take
and pay for all of the notes offered by this prospectus
supplement if any such notes are taken.
The underwriters initially propose to offer part of the notes
directly to the public at the public offering prices set forth
on the cover page of this prospectus supplement and part to
certain dealers at a price that represents a concession not in
excess of % of the principal amount
of 20 notes and of % of
the principal amount of 20 notes. Any such dealers
may resell any notes purchased from the underwriters to certain
other brokers or dealers at a discount not to
exceed % of the principal amount of
20 notes and % of the
principal amount of 20 notes. After the initial
offering of the notes, the offering price and other selling
terms may from time to time be varied by the representatives.
The following table shows the underwriting discount that we will
pay to the underwriters in connection with this offering:
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Paid by Us
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Per 20 note
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$
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Per 20 note
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$
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Total
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$
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Expenses associated with this offering to be paid by us, other
than underwriting discounts, are estimated to be approximately
$1.7 million.
In connection with the offering of the notes, the underwriters
may engage in transactions that stabilize, maintain or otherwise
affect the price of the notes. Specifically, the underwriters
may overallot in connection with the offering of the notes,
creating a syndicate short position. In addition, the
underwriters may bid for, and purchase, notes in the open market
to cover syndicate short positions or to stabilize the price of
the notes. Finally, the underwriting syndicate may reclaim
selling concessions allowed for distributing the notes in the
offering of the notes, if the syndicate repurchases previously
distributed notes in syndicate covering transactions,
stabilization transactions or otherwise. Any of these activities
may stabilize or maintain the market price of the notes above
independent market levels. The underwriters are not required to
engage in any of these activities, and may end any of them at
any time.
We have agreed to indemnify the underwriters against certain
liabilities, including liabilities under the Securities Act of
1933, as amended, or to contribute to payments which the
underwriters may be required to make in respect of any such
liabilities.
Prior to the offering, there have been no active markets for the
notes. The underwriters have advised us that certain of the
underwriters presently intend to make markets in the notes of
each series as permitted by applicable laws and regulations.
Such underwriters are not obligated, however, to make the
markets in the notes and any such
S-37
market making may be discontinued at any time at the discretion
of such underwriters. Accordingly, no assurance can be given as
to the liquidity of, or trading markets for, the notes.
We have agreed that we will not offer, sell, contract to sell,
pledge, otherwise dispose of, enter into any transaction which
is designed to, or might reasonably be expected to, result in
the disposition by us of, file, directly or indirectly, a
registration statement with the Commission in respect of, or
establish or increase a put equivalent position or liquidate or
decrease a call equivalent position within the meaning of
Section 16 of the Exchange Act in respect of any
non-convertible debt securities issued or guaranteed by the
Company, or publicly announce an intention to effect any such
transaction, without, in each case, the prior written consent of
the representatives for a period ending 30 days after the
date on which the notes will be delivered.
From time to time in the ordinary course of their respective
businesses, certain of the underwriters and their affiliates
have engaged in and may in the future engage in commercial
banking, derivatives
and/or
investment banking transactions with us and our affiliates.
J.P. Morgan Securities LLC, Morgan Stanley & Co.
Incorporated and UBS Securities LLC have provided, and continue
to provide, various investment banking services for Symantec and
our respective subsidiaries and other affiliates, for which they
received or will receive customary fees and expenses. Affiliates
of certain of the underwriters, including J.P. Morgan
Securities LLC, Morgan Stanley & Co. Incorporated and
UBS Securities LLC, were lenders under the credit facility we
entered into July 2006, which was terminated when we entered
into the 2010 credit facility. Affiliates of J.P. Morgan
Securities LLC, Morgan Stanley & Co. Incorporated and
UBS Securities LLC are lenders under the 2010 credit facility
and affiliates of J.P. Morgan Securities LLC and Morgan
Stanley & Co. Incorporated are also acting as
co-documentation agents under such facility. In addition, from
time to time in the ordinary course of business, certain of the
underwriters and their affiliates are and have been customers of
us and our affiliates.
European
Economic Area
In relation to each Member State of the European Economic Area
which has implemented the Prospectus Directive, each underwriter
has represented and agreed that with effect from and including
the date on which the Prospectus Directive is implemented in
that Member State it has not made and will not make an offer of
notes to the public in that Member State prior to the
publication of a prospectus in relation to the notes which has
been approved by the competent authority in that Member State
or, where appropriate, approved in another Member State and
notified to the competent authority in that Member State, all in
accordance with the Prospectus Directive, except that it may,
with effect from and including such date, make an offer of notes
to the public in that Member State:
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at any time to legal entities which are authorized or regulated
to operate in the financial markets or, if not so authorized or
regulated, whose corporate purpose is solely to invest in
securities;
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at any time to any legal entity which has two or more of
(1) an average of at least 250 employees during the
last financial year; (2) a total balance sheet of more than
43,000,000; and (3) an annual net turnover of more
than 50,000,000, as shown in its last annual or
consolidated accounts; or
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at any time in any other circumstances which do not require the
publication by us of a prospectus pursuant to Article 3 of
the Prospectus Directive.
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For the purposes of this provision, the expression an
offer of notes to the public in relation to any
notes in any Member State means the communication in any form
and by any means of sufficient information on the terms of the
offer and the notes to be offered so as to enable an investor to
decide to purchase or subscribe the notes, as the same may be
varied in that Member State by any measure implementing the
Prospectus Directive in that Member State and the expression
Prospectus Directive means Directive 2003/71/EC and includes any
relevant implementing measure in that Member State.
United
Kingdom
Each underwriter has represented and agreed that it has only
communicated or caused to be communicated and will only
communicate or cause to be communicated an invitation or
inducement to engage in investment activity (within the meaning
of Section 21 of the Financial Services and Markets Act
2000) in connection with the issue or sale of the notes in
circumstances in which Section 21(1) of such Act does not
apply to us and it has complied and will comply with all
applicable provisions of such Act with respect to anything done
by it in relation to any notes in, from or otherwise involving
the United Kingdom.
S-38
LEGAL
MATTERS
Fenwick & West LLP, Mountain View, California, will
pass upon the authorization and validity of the securities.
Simpson Thacher & Bartlett LLP, Palo Alto, California,
will pass upon certain legal matters for the underwriters with
respect to this offering of the securities. As of
September 10, 2010, attorneys of Fenwick & West
LLP beneficially owned an aggregate of approximately
12,500 shares of our common stock.
EXPERTS
The consolidated financial statements and schedule of Symantec
as of April 2, 2010 and April 3, 2009, and for each of
the years in the three-year period ended April 2, 2010, and
managements assessment of the effectiveness of internal
control over financial reporting as of April 2, 2010, have
been incorporated by reference herein in reliance upon the
reports of KPMG LLP, independent registered public accounting
firm, incorporated by reference herein, upon the authority of
said firm as experts in accounting and auditing.
Such report on the consolidated financial statements as of
April 2, 2010, and for each of the years in the three-year
period ended April 2, 2010, refers to the retrospective
adoption of new accounting requirements issued by the Financial
Accounting Standards Board, which resulted in changes in the
method of accounting for convertible debt instruments that may
be settled in cash upon conversion (including partial cash
settlement) effective April 4, 2009.
S-39
Prospectus
Symantec Corporation
Common Stock, par value $0.01
per share
Debt Securities
We may offer from time to time, in one or more offerings, debt
securities or shares of our common stock, par value $0.01 per
share, including shares of common stock issuable upon conversion
or exchange of debt securities. This prospectus describes the
general terms of these securities and the general manner in
which we will offer them. We will provide the specific terms of
these securities in supplements to this prospectus. The
prospectus supplements will also describe the specific manner in
which we will offer these securities and may also supplement,
update or amend information contained in this prospectus. You
should read this prospectus and the applicable prospectus
supplement carefully before you invest.
Our common stock is listed on the Nasdaq Global Select Market
under the symbol SYMC.
We may sell these securities on a continuous or delayed basis
directly, through agents, dealers or underwriters as designated
from time to time, or through a combination of these methods. We
reserve the sole right to accept, and together with any agents,
dealers and underwriters, reserve the right to reject, in whole
or in part, any proposed purchase of securities. If any agents,
dealers or underwriters are involved in the sale of any
securities, the applicable prospectus supplement will set forth
any applicable commissions or discounts. Our net proceeds from
the sale of securities also will be set forth in the applicable
prospectus supplement.
THIS PROSPECTUS MAY NOT BE USED TO OFFER OR SELL ANY SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
Investing in any of our securities involves certain risks.
See Risk Factors on page 4 in this prospectus,
as well as in supplements to this prospectus.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
The date of this prospectus is September 13, 2010
TABLE OF
CONTENTS
Prospectus
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Page
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2
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2
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2
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3
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3
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4
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4
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4
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4
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12
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13
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13
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You should rely only on the information contained or
incorporated by reference in this prospectus and in any
supplement to this prospectus. We have not authorized any other
person to provide you with different information. If anyone
provides you with different or inconsistent information, you
should not rely on it. You should assume that the information
appearing in this prospectus and the accompanying prospectus
supplement is accurate as of the date on their respective
covers. Our business, financial condition, results of operations
and prospects may have changed since that date.
ABOUT
THIS PROSPECTUS
This prospectus is part of a shelf registration
statement that we have filed with the Securities and Exchange
Commission (the SEC). By using a shelf registration
statement, we may sell, at any time and from time to time, in
one or more offerings, any of the securities identified in this
prospectus or any combination of the securities.
This prospectus only provides you with a general description of
the debt securities we may offer. Each time we sell securities,
we will provide a prospectus supplement that contains specific
information about the terms of those securities. The prospectus
supplement may also add, update or change information contained
in this prospectus. You should read both this prospectus and any
prospectus supplement together with the additional information
described below under the headings Where You Can Find More
Information and Information Incorporated by
Reference.
We are not making an offer of these securities in any
jurisdiction where the offer is not permitted. You should not
assume that the information in this prospectus or a prospectus
supplement is accurate as of any date other than the date on the
front of the document.
When used in this prospectus, the terms Symantec,
we, our and us refer to
Symantec Corporation and its consolidated subsidiaries, unless
otherwise specified.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
All statements included or incorporated by reference in this
prospectus and any accompanying prospectus supplement, other
than statements of historical facts, that address activities,
events or developments that we intend, expect, project, believe
or anticipate will or may occur in the future are
forward-looking statements. This prospectus and any accompanying
prospectus supplement contain forward-looking statements that
are based on current expectations, estimates, forecasts and
projections about us, our future performance, our business, our
beliefs and our managements assumptions. In addition, we,
or others on our behalf, may make forward-looking statements in
press releases or written statements, or in our communications
and discussions with investors and analysts in the normal course
of business through meetings, webcasts, phone calls and
conference calls. Words such as expect,
anticipate, outlook, could,
target, project, intend,
plan, believe, seek,
estimate, should, may,
assume or continue, and variations of
such words and similar expressions are intended to identify such
forward-looking statements. These statements are not guarantees
of future performance and involve certain risks, uncertainties
and assumptions that are difficult to predict. We refer you to
some of the risks, uncertainties and assumptions that could
affect our business including our financial condition and
results of operations in Risk Factors below. We may
update our descriptions of such risks, uncertainties and
assumptions in any prospectus supplement. We have based our
forward-looking statements on our managements beliefs and
assumptions based on information available to our management at
the time the statements are made. We caution you that actual
outcomes and results may differ materially from what is
expressed, implied or forecast by our forward-looking
statements. Reference is made in particular to forward-looking
statements regarding projections of our future financial
performance, capital resources, anticipated growth and trends in
our businesses and in our industries, the anticipated impact of
our acquisitions, and other characterizations of future events
or circumstances. Except as required under the federal
securities laws and the rules and regulations of the SEC, we do
not have any intention or obligation to update publicly any
forward-looking statements after the distribution of this
prospectus and any accompanying prospectus supplement, whether
as a result of new information, future events, changes in
assumptions or otherwise.
WHERE YOU
CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements
and other information with the SEC. Our SEC filings are
available to the public from the SECs web site at
www.sec.gov. You may also read and copy any document we file at
the SECs public reference room in Washington, D.C.
located at 100 F Street, N.E., Washington, D.C.
20549. You may also obtain copies of any document we file at
prescribed rates by writing to the Public Reference Section of
the Securities Exchange Commission at that address. Please call
the SEC at
1-800-SEC-0330
for further information on the public reference room.
2
INFORMATION
INCORPORATED BY REFERENCE
The SEC allows us to incorporate by reference in
this prospectus the information in other documents that we file
with it, which means that we can disclose important information
to you by referring you to those documents. The information
incorporated by reference is considered to be a part of this
prospectus, and information in documents that we file later with
the SEC will automatically update and supersede information
contained in documents filed earlier with the SEC or contained
in this prospectus or a prospectus supplement. We incorporate by
reference in this prospectus the documents listed below and any
future filings that we may make with the SEC under
Sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934, as amended, prior to the termination of
the offering under this prospectus:
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Annual Report on
Form 10-K
for the year ended April 2, 2010 (including those sections
incorporated by reference from our Proxy Statement filed
July 30, 2010);
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Quarterly Report on
Form 10-Q
for the fiscal quarter ended July 2, 2010;
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Current Reports on
Form 8-K
filed May 4, 2010, May 24, 2010, May 28, 2010,
July 7, 2010, August 11, 2010, September 7, 2010
and September 13, 2010; and
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the description of our common stock contained in our
registration statement on
Form 8-A
filed May 24, 1989 (including any amendment or report filed
for the purpose of updating that description).
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To the extent that any information contained in any Current
Report on
Form 8-K,
or any exhibit thereto, was furnished to, rather than filed
with, the SEC, such information or exhibit is specifically not
incorporated by reference in this prospectus.
You may obtain a copy of any or all of the documents referred to
above which may have been or may be incorporated by reference
into this prospectus (excluding certain exhibits to the
documents) at no cost to you by writing or telephoning us at the
following address:
Symantec Corporation
Attn: Investor Relations
350 Ellis Street
Mountain View, California 94043
(650) 527-8000
The mailing address of our principal executive offices is 350
Ellis Street, Mountain View, CA 94043, and our telephone number
at that location is
(650) 527-8000.
SYMANTEC
CORPORATION
Symantec is a global provider of security, storage and systems
management solutions that help businesses and consumers secure
and manage their information. We provide customers worldwide
with software and services that protect, manage and control
information risks related to security, data protection, storage,
compliance, and systems management. We help our customers manage
cost, complexity and compliance by protecting their IT
infrastructure as they seek to maximize value from their IT
investments.
We operate primarily in three diversified markets within the
software sector: security, storage, and systems management. We
believe these markets are converging as customers increasingly
require our help mitigating their risk profiles and managing
their storage needs in order to secure and manage their most
valuable asset information. We have taken a
proactive and policy-driven approach to protecting and managing
information as the tools and processes from these formerly
discrete domains become more integrated.
Founded in 1982, we are incorporated in the State of Delaware.
Our principal executive offices are located at 350 Ellis Street,
Mountain View, California 94043. Our telephone number at that
location is
(650) 527-8000.
We maintain a website at www.symantec.com. The information
contained on our website is not incorporated by reference in
this prospectus or the accompanying prospectus supplement and
you should not consider it a part of this prospectus or the
accompanying prospectus supplement.
3
RISK
FACTORS
Before you invest in any of our securities, in addition to the
other information, documents or reports incorporated by
reference in this prospectus and in the applicable prospectus
supplement, you should carefully consider the risk factors set
forth in the section entitled Risk Factors in any
prospectus supplement as well as in Part I,
Item 1A. Risk Factors, in our most recent annual
report on
Form 10-K,
as may be updated from time to time in Part II,
Item 1A. Risk Factors, in our quarterly reports on
Form 10-Q
filed subsequent to such
Form 10-K
which are incorporated by reference into this prospectus and the
applicable prospectus supplement in their entirety. Each of the
risks described in these sections and documents could materially
and adversely affect our business, financial condition, results
of operations and prospects, and could result in a loss of your
investment.
USE OF
PROCEEDS
Unless otherwise specified in a prospectus supplement
accompanying this prospectus, the net proceeds from the sale of
the securities to which this prospectus relates will be used for
general corporate purposes, after deducting underwriting
discounts and offering expenses. General corporate purposes may
include repayment of our outstanding indebtedness, repurchases
of our outstanding securities, acquisitions, working capital and
capital expenditures. Net proceeds may be temporarily invested
prior to use.
RATIO OF
EARNINGS TO FIXED CHARGES
The following table contains our ratio of earnings to fixed
charges for the periods indicated. For these ratios,
earnings represents (a) income (loss) before
income taxes and loss from joint venture and (b) fixed
charges. Fixed charges consist of interest on all indebtedness,
amortization of debt expense and an estimate of the interest
within rental expense.
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Three Months
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Fiscal Year Ended
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Ended
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April 2,
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April 3,
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March 28,
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March 30,
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March 31,
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July 2, 2010
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2010
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2009
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2008
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2007
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2006
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5.32x
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6.81x
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(1)
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5.36x
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5.94x
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13.52x
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(1) |
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Earnings for the fiscal year ended April 3, 2009 were not
sufficient to cover fixed charges by a total of
$6.6 billion and, as such, the ratio of earnings to fixed
charges has not been computed for this period. Included in the
earnings for fiscal 2009 is an impairment of goodwill of
$7.4 billion. For more information, see Note 6 of the
Notes to the Consolidated Financial Statements in our
Form 10-K
for the fiscal year ended April 3, 2009. |
DESCRIPTION
OF DEBT SECURITIES
The following description of the debt securities we may offer,
together with the additional information included in any
prospectus supplement, describes the material terms of the debt
securities but is not complete. For a more detailed description
of the terms of the debt securities, please refer to the
indenture that we have filed as an exhibit to the registration
statement that includes this prospectus. We will describe in a
prospectus supplement the specific terms of any debt securities
we may offer by this prospectus. If indicated in a prospectus
supplement, the terms of the debt securities may differ from the
terms described below.
The debt securities will be our senior unsecured debt securities
and will rank equally with all other existing and future
unsecured and unsubordinated debt obligations of Symantec. We
will issue our debt securities under an indenture between
Symantec and Wells Fargo Bank, National Association, as trustee.
The following summaries of the senior unsecured debt and the
indenture are subject to, and qualified in their entirety by
reference to, all the provisions of the indenture and any
supplement thereto, including the definitions of terms, and any
officers certificate pursuant to which notes are issued
pursuant thereto.
We may issue the debt securities from time to time in one or
more series. We will also determine the terms and provisions of
the debt securities, which must be consistent with the
indenture, including terms such as maturity,
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principal and interest. Unless otherwise specified in the
applicable prospectus supplement, the senior debt securities
when issued will be unsecured and unsubordinated obligations of
Symantec and will rank equally with all other existing and
future senior unsecured and unsubordinated indebtedness of
Symantec, including Symantecs 0.75% Convertible
Senior Notes due 2011 and 1.00% Convertible Senior Notes
due 2013 and indebtedness we may incur from time to time under
the four-year senior unsecured $1.0 billion revolving
credit facility that we entered into on September 8, 2010
(the 2010 credit facility).
The indenture does not limit the amount of other debt that we
may issue and does not contain financial or similar restrictive
covenants. The indenture does not contain any provision intended
to provide protection to holders of debt securities against a
sudden or dramatic decline in the credit quality of Symantec
that could, for example, result from a takeover,
recapitalization, special dividend or other restructuring.
Each prospectus supplement will describe the following terms
relating to each series of debt securities that we may issue:
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the title;
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the price or prices at which we will issue the debt securities;
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the person to whom any interest on a debt security of the series
will be payable, if other than the person in whose name that
debt security (or one or more predecessor debt securities) is
registered at the close of business on the regular record date
for interest;
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the maturity date(s) or the method of determining the maturity
date(s);
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the interest rate(s), which may be fixed or variable, or the
method for determining the rate(s) and the date(s) interest will
start to accrue, the date(s) on which interest will be payable
and the regular record dates for interest payment dates or the
method for determining the interest payment dates;
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the place(s) where payments may be made and the manner of
payments;
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Symantecs right, if any, to defer payment of interest and
the maximum length of any deferral period;
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the dates, if any, after which, and the price(s) at which, the
series of debt securities may be redeemed at Symantecs
option under any optional redemption provisions, and other
related terms and conditions;
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the obligation, if any, of Symantec to redeem or purchase any of
the debt securities under any sinking fund or analogous
provision or at the option of the holder and the date(s), if
any, on which, and the price(s) at which Symantec is obligated,
under those provisions or otherwise, to redeem or purchase the
series of debt securities and other related terms and provisions;
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the denominations in which any of the debt securities will be
issued, if other than denominations of $2,000 and any integral
multiple of $1,000;
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if the amount of payments of principal or interest is to be
determined by reference to an index or a formula, or based on a
coin or currency other than that in which the debt securities
are stated to be payable, the manner in which these amounts will
be determined and the calculation agent, if any;
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if other than United States dollars, the currency, currencies or
currency units in which payments on the debt securities will be
payable and whether the holder may choose a different currency
for payment;
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the currency, currencies or currency units of payment of
principal or interest and the period, if any, during which a
holder may elect payment in a currency other than the currency
in which the debt securities are denominated;
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if other than the entire principal amount, the portion of the
principal amount of the debt securities that will be payable
upon declaration of acceleration of maturity;
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the terms that apply to any debt securities issued at a discount
from their stated principal amount;
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if the principal amount payable at the stated maturity of any
debt securities will not be determinable before the stated
maturity, the amount that will be deemed to be the principal
amount as of any date for any purpose,
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including the principal amount that will be due and payable upon
any maturity other than the stated maturity or that will be
treated as outstanding as of any date (or the manner in which
the deemed principal amount is to be determined);
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if applicable, that the debt securities, in whole or any
specified part, are defeasible;
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conversion or exchange provisions, if any, including conversion
or exchange prices or rates and adjustments to those prices and
rates;
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whether any of the debt securities will be issued in global form
and, if so, who the depositary will be and the terms of the
global securities;
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any subordination provisions;
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any deletion of, or change or addition to any event of default
or covenant;
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any change in the right of the trustee or the holders to declare
the principal amount of any of the debt securities due and
payable;
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terms and conditions, if any, under which any of the debt
securities are secured; and
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any other specific terms of the debt securities.
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If any debt securities are sold for any foreign currency or
currency unit or if any payments of the debt securities are
payable in any foreign currency or currency unit, the prospectus
supplement will contain any restrictions, elections, tax
consequences, specific terms and other information about the
debt securities and the foreign currency or currency unit.
The debt securities may be issued as original issue discount
securities. An original issue discount security is a debt
security, including any zero-coupon security, that is sold at a
price that is lower than the amount payable upon its stated
maturity and provides that upon redemption or acceleration of
the maturity, an amount less than the amount payable upon the
stated maturity becomes due and payable. An original issue
discount security also may bear no interest or bear interest at
a below-market rate. The prospectus supplement will also contain
any special tax, accounting or other information about original
issue discount securities or other kinds of debt securities that
may be offered, including debt securities linked to an index or
payable in currencies other than United States dollars.
Conversion
and Exchange Rights
The terms on which any series of debt securities may be
convertible into or exchangeable for common stock or other
securities of Symantec will be described in the applicable
prospectus supplement. These terms will include whether
conversion or exchange is mandatory, at the option of the holder
or at the option of Symantec. These terms may also include
provisions for adjustment in the number of shares of common
stock or other securities of Symantec to be received by the
holders of the series of debt securities and provisions for
calculation of the number of shares of common stock or other
securities to be received by the holders upon conversion or
exchange of debt securities according to the market price as of
a specific time.
Form,
Exchange and Transfer
The debt securities of each series will be issuable only in
fully registered form, without coupons, and, unless otherwise
specified in the applicable prospectus supplement, only in
denominations of $2,000 and integral multiples of $1,000. At the
option of the holder, subject to the terms of the indenture and
the limitations that apply to global securities described in the
applicable prospectus supplement, debt securities of any series
will be exchangeable for the other debt securities of the same
series, in any authorized denomination and of like tenor and
aggregate principal amount.
Subject to the terms of the indenture and the limitations that
apply to global securities described in the applicable
prospectus supplement, debt securities may be presented for
exchange or for registration of transfer at the office of the
security registrar or at the office of any transfer agent
designated by Symantec for that purpose. Unless otherwise
specified in the debt securities to be exchanged or transferred,
there will not be a service charge for any
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registration of exchange or transfer of debt securities, but
Symantec may require payment of any taxes or other governmental
charges. Symantec has appointed the trustee as security
registrar. Any transfer agent in addition to the security
registrar that Symantec initially designates for any debt
securities will be named in the applicable prospectus
supplement. Symantec may at any time designate additional
transfer agents or rescind the designation of any transfer agent
or approve a change in the office through which any transfer
agent acts, except that Symantec will be required to maintain a
transfer agent in each place of payment for the debt securities
of each series.
If the debt securities of any series are to be redeemed in part,
Symantec will not be required to:
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issue, register the transfer of or exchange any debt security of
that series during the
15-day
period before the day of mailing of a notice of redemption of
any debt security that may be selected for redemption; or
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register the transfer of or exchange any debt security selected
for redemption, in whole or in part, except the unredeemed
portion of any debt security being redeemed in part.
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Global
Securities
We may issue a series of debt securities in whole or in part in
the form of one or more global certificates that will be
deposited with a depositary we will identify in a prospectus
supplement. We may issue global debt securities in either
registered or unregistered form and in either temporary or
definitive form. We will describe the specific terms of the
depositary arrangement for any series of debt securities in the
applicable prospectus supplement.
Except as described in the applicable prospectus supplement, no
global security may be exchanged for debt securities registered,
and no transfer of a global security may be registered, in the
name of any person other than the depositary for the global
security or any nominee of the depositary unless:
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the depositary has notified us that it is unwilling or unable to
continue as depositary for the global security or has ceased to
be qualified to act as depositary as required by the
indenture; or
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an event of default with respect to the debt securities
represented by the global security has occurred and is
continuing.
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As long as the depositary, or its nominee, is the registered
holder of a global security, the depositary or its nominee will
be considered the sole owner and holder of the debt securities
represented by that global security for all purposes under the
indenture. Except in the limited circumstances referred to
above, owners of beneficial interests in a global security:
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will not be entitled to have the debt securities represented by
a global security registered in their names;
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will not receive or be entitled to receive physical delivery of
the debt securities in definitive form; and
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will not be considered the owners or holders of the debt
securities under the indenture.
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We will make all payments of principal and premium, if any, and
interest, if any, on a global security to the depositary or its
nominee.
The laws of some jurisdictions require that specified purchasers
of securities take physical delivery of the securities in
definitive form. These laws may limit the ability of those
persons to own, transfer or pledge beneficial interests in a
global security.
Ownership of beneficial interests in a global security will be
limited to institutions that have accounts with the depositary
or its nominee, referred to as participants, and to
persons that may hold beneficial interests through participants.
Upon the issuance of a registered global security, the
depositary for the registered global security will credit, on
its book-entry registration and transfer system, the
participants accounts with the respective principal
amounts of the debt securities represented by the global
security beneficially owned by the participants. Any dealers,
underwriters or agents participating in the distribution of the
debt securities will designate the accounts to be credited.
Ownership of beneficial interest in a global security will be
shown only on, and the transfer of that ownership interest will
be made only through, records maintained by the depositary for
participants interests or on the records of participants
for interests of persons holding through participants.
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Each person owning a beneficial interest in a global security
must rely on the procedures of the depositary for the global
security and, if the person is not a participant, on the
procedures of a participant through which the person owns its
interest, to exercise any right of a holder under the indenture.
Payments, transfers, exchanges and others matters relating to
beneficial interests in a global security may be subject to
various policies and procedures adopted by the depositary from
time to time. None of Symantec, the trustee or any of our agents
or agents of the trustee will have any responsibility or
liability for any aspect of the depositarys or any
participants records relating to, or for payments made on
account of, beneficial interests in a global security, or for
maintaining, supervising or reviewing any records relating to
the beneficial interests.
Payment
and Paying Agents
Unless otherwise indicated in the applicable prospectus
supplement, payment of interest on a debt security on any
interest payment date will be made to the person in whose name
the debt security, or one or more predecessor debt securities,
is registered at the close of business on the regular record
date for that interest.
Unless otherwise indicated in the applicable prospectus
supplement, principal of and any premium and interest on the
debt securities of a particular series will be payable at the
office of the paying agent(s) designated by Symantec, except
that at Symantecs option interest payments may be made by
check mailed to the holder. Unless otherwise indicated in the
applicable prospectus supplement, the corporate trust office of
the trustee will be designated as Symantecs sole paying
agent for payments on debt securities of each series. The
applicable prospectus supplement will name any other paying
agents initially designated by Symantec for the debt securities
of a particular series. Symantec may at any time designate
additional paying agents or rescind the designation of any
paying agent or approve a change in the office through which any
paying agent acts, except that Symantec will be required to
maintain a paying agent in each place of payment for the debt
securities of a particular series.
All moneys that Symantec pays to a paying agent or the trustee
for the payment of the principal of or any premium or interest
on any debt security that remain unclaimed for a period ending
the earlier of 10 business days before the money would escheat
to the state or at the end of two years after the relevant
principal, premium or interest has become due and payable will
be repaid to Symantec, and the holder of that debt security may
look only to Symantec for payment.
Consolidation,
Merger and Sale of Assets
Under the terms of the indenture, Symantec may consolidate with
or merge into another entity or convey, transfer or lease all or
substantially all of our assets to another entity, if Symantec
is the continuing entity or, if Symantec is not the continuing
entity:
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the continuing entity is organized under the laws of the United
States;
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the continuing entity expressly assumes all of our obligations
under the debt securities and the indenture and, if required,
executes a supplemental indenture, in a form satisfactory to the
trustee, which will be delivered to the trustee;
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immediately after giving effect to the transaction, there is no
default on the debt securities and the transaction does not
cause a default on the debt securities; and
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we or the continuing entity deliver to the trustee an
officers certificate and opinion of counsel stating that
the transaction and the supplemental indenture, if any, complies
with this covenant and that all conditions precedent in the
indenture relating to the transaction have been satisfied.
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Events of
Default
Unless otherwise described in a prospectus supplement, each of
the following will be an event of default under the indenture
with respect to any series of the debt securities:
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failure to pay the principal or any premium when due;
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failure to pay interest for 30 days after the date payment
is due and payable, if the time for payment has not been
extended or deferred;
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failure to make any sinking fund payment when due;
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failure to perform any other covenant for 60 days after
written notice from the trustee or the holders of at least 25%
in aggregate principal amount of the outstanding debt securities
of that series;
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events in bankruptcy, insolvency or reorganization of
Symantec; and
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any other event of default specified in a supplemental indenture
or officers certificate under which we issue a series of
debt securities.
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The occurrence of an event of default under the indenture
governing the debt securities would constitute an event of
default under our 2010 credit facility and may constitute an
event of default under future credit agreements or facilities in
existence from time to time. In addition, the occurrence of an
event of default or an acceleration under the indenture may
constitute an event of default under certain of our other
indebtedness outstanding from time to time.
An event of default for a particular series of debt securities
is not necessarily an event of default for any other series of
debt securities issued under an indenture. If an event of
default involving any series of debt securities has occurred and
is continuing, other than an event of default caused by events
in bankruptcy, insolvency or reorganization of Symantec, either
the trustee or the holders of at least 25% in aggregate
principal amount of the outstanding debt securities of each
affected series may declare the principal amount of the debt
securities of that series to be due and payable immediately. If
an event of default caused by events in bankruptcy, insolvency
or reorganization of Symantec has occurred and is continuing,
the principal amount of all the outstanding debt securities of
that series will automatically, and without any action by the
trustee or any holder, become immediately due and payable. After
any acceleration, but before a judgment or decree based on
acceleration, the holders of a majority in aggregate principal
amount of the outstanding debt securities of that series may,
under certain circumstances, rescind and annul acceleration if
all events of default, other than the non-payment of accelerated
principal (or other specified amount), have been cured or waived
as provided in the indenture. For information about waiver of
defaults, see Modification and Waiver.
Subject to the provisions of the indenture, if an event of
default has occurred and is continuing, the trustee will not be
obligated to exercise any of its rights or powers under the
indenture at the request or direction of any of the holders of
the applicable series of debt securities, unless those holders
have offered the trustee an indemnity satisfactory to it.
Subject to these provisions for the indemnification of the
trustee, the holders of a majority in aggregate principal amount
of the outstanding debt securities of any series will have the
right to direct the time, method and place of conducting any
proceeding for any remedy available to the trustee or exercising
any trust or power conferred on the trustee with respect to the
debt securities of that series.
A holder of a debt security of any series will have a right to
institute a proceeding under the indenture, or to appoint a
receiver or a trustee, or to seek any other remedy only if:
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the holder has previously given written notice to the trustee of
a continuing event of default with respect to the debt
securities of that series;
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the holders of at least 25% in aggregate principal amount of the
outstanding securities of that series have made a written
request, and have offered an indemnity satisfactory to the
trustee, to the trustee to institute the proceeding as
trustee; and
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the trustee has not instituted the proceeding, and has not
received from the holders of a majority in aggregate principal
amount of the outstanding securities of that series other
conflicting directions within 60 days after that notice,
request and offer.
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These limitations do not apply to a suit instituted by a holder
of a debt security to enforce payment of the principal of or any
premium or interest on that debt security on or after the
applicable due date specified in the debt security.
Symantec will periodically file statements with the trustee
regarding its compliance with certain of the covenants in the
indenture.
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Modification
and Waiver
Symantec and the trustee may change the indenture with the
consent of the holders of a majority in aggregate principal
amount of the outstanding debt securities of each series
affected by the change. The following changes, however, may be
made only with the consent of the holder of each outstanding
debt security affected:
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change the stated maturity of any debt security;
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reduce the principal amount or premium, if any, of any debt
security;
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reduce the rate or extend the time of payment of interest;
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reduce the amount of principal of any debt security issued with
an original issue discount that is payable upon acceleration or
provable in bankruptcy;
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any reduction in the premium payable upon the redemption of any
debt security of a particular series;
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change the place or currency of payment of principal, premium,
if any, or interest;
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impair the right to institute suit for the enforcement of any
payment on any debt security;
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in the case of subordinated debt securities, modify the
subordination provisions in a manner materially adverse to the
holders of the subordinated debt securities;
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in the case of debt securities that are convertible or
exchangeable into other securities of Symantec, adversely affect
the right of holders to convert or exchange any of the debt
securities other than as provided in the indenture;
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reduce the percentage in principal amount of holders of debt
securities of any series whose consent is required to change the
indenture for that series;
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reduce the percentage in principal amount of holders of debt
securities of any series necessary for waiver of compliance with
certain provisions of the indenture or for waiver of certain
defaults; or
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modify the provisions on modification and waiver.
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The indenture will provide that the holders of a majority in
aggregate principal amount of the outstanding debt securities of
any series may waive compliance by Symantec with specific
restrictive provisions of the indenture on behalf of the holders
of all debt securities of that series. The holders of not less
than a majority in principal amount of the outstanding debt
securities of any series may waive any past default under the
indenture of debt securities of that series on behalf of all
holders of debt securities of that series, except a default in
the payment of principal, premium, if any, or interest on any
debt security of that series or a default in respect of a
covenant or provision of the indenture that cannot be amended
without the consent of the holder of each outstanding debt
security of the series affected.
The indenture will provide that in determining whether the
holders of the requisite principal amount of debt securities
have given or taken any direction, notice, consent, waiver or
other action under the indenture as of any date:
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the principal amount of an original issue discount security that
will be treated as outstanding will be the amount of the
principal of that debt security that would be due and payable as
of that date upon acceleration of the maturity to that date;
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if, as of that date, the principal amount payable at the stated
maturity of a debt security is not determinable (for example,
because it is based on an index), the principal amount of that
debt security treated as outstanding as of that date will be an
amount determined in the manner prescribed for that debt
security; and
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the principal amount of a debt security denominated in one or
more foreign currencies or currency units that will be treated
as outstanding will be the U.S. dollar equivalent,
determined as of that date in the manner prescribed for that
debt security, of the principal amount of that debt security.
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Certain debt securities, including those for whose payment or
redemption money has been deposited or set aside in trust for
the holders and those that have been fully defeased, will not be
treated as outstanding.
Except in limited circumstances, we will be entitled to set any
day as a record date for determining the holders of outstanding
debt securities of any series entitled to give or take any
direction, notice, consent, waiver or other action under the
indenture, in the manner and subject to the limitations provided
in the indenture. In limited circumstances, the trustee will be
entitled to set a record date for action by holders. If a record
date is set for any action to be taken by holders of a
particular series, only persons who are holders of outstanding
debt securities of that series on the record date may take that
action. To be effective, holders of the requisite principal
amount of those debt securities must take that action within a
specified period following the record date. For any particular
record date, this period will be 180 days or a shorter
period as may be specified by Symantec (or the trustee, if it
set the record date), and may be shortened or lengthened (but
not beyond 180 days) from time to time.
Defeasance
and Covenant Defeasance
Symantec can discharge or defease its obligations under the
indenture as stated below or as provided in the applicable
prospectus supplement.
Unless otherwise specified in the applicable prospectus
supplement, Symantec may, at its option, discharge its
obligations to holders of any series of debt securities that
have not already been delivered to the trustee for cancellation
and that have either become due and payable or are by their
terms to become due and payable, or are scheduled for
redemption, within one year. Symantec may effect a discharge by
irrevocably depositing with the trustee cash or
U.S. government obligations, as trust funds, in an amount
sufficient, in the opinion of a firm of certified public
accountants, to pay, when due, whether at maturity, upon
redemption or otherwise, the principal of, premium, if any, and
interest on the debt securities. Symantec must also pay all
other amounts it is obligated to pay under the indenture and
deliver to the trustee an opinion of counsel to the effect that
all conditions to discharge of the indenture have been satisfied.
Unless otherwise specified in the applicable prospectus
supplement, Symantec may also discharge any and all of its
obligations to holders of any series of debt securities at any
time, which is referred to as defeasance. Symantec
may also be released from the obligations imposed by any
covenants of any outstanding series of debt securities and
provisions of the indenture, and may omit to comply with those
covenants without creating an event of default under the trust
declaration, which is referred to as covenant
defeasance. Symantec may effect defeasance and covenant
defeasance only if, among other things, Symantec irrevocably
deposits with the trustee cash or U.S. government
obligations, as trust funds, in an amount that will provide
money in an amount sufficient, in the opinion of a firm of
certified public accountants, to pay the principal of, premium,
if any, and interest on all outstanding debt securities of the
series on their stated maturities. In addition, Symantec must
deliver an opinion of counsel to the trustee. In the case of
covenant defeasance, the opinion must be to the effect that
holders of the series of debt securities will not recognize
income, gain or loss for federal income tax purposes as a result
of the defeasance and will be subject to federal income tax on
the same amount, in the same manner and at the same times as if
no covenant defeasance had occurred. In the case of defeasance,
the opinion must be to the effect that Symantec has received a
ruling from the United States Internal Revenue Service, the
Internal Revenue Service has published a ruling or there has
been a change in tax law, and based on that ruling or change,
holders of the series of debt securities will not recognize gain
or loss for federal income tax purposes as a result of the
defeasance and will be subject to federal income tax on the same
amount, in the same manner and at the same times as if no
defeasance had occurred. Symantec will remain subject to
obligations to exchange or register the transfer of debt
securities, to replace stolen, lost or mutilated debt
securities, to maintain paying agencies, to hold moneys for
payment in trust and, if applicable, to effect conversion of
debt securities.
Notices
Notices to holders of debt securities will be given by mail to
the addresses of the holders as they appear in the security
register.
11
Title
Symantec, the trustee and any agent of either Symantec or the
trustee may treat the person in whose name a debt security is
registered as the absolute owner of that debt security, whether
or not it may be overdue, for the purpose of making payment and
for all other purposes.
Governing
Law
The indenture and the debt securities will be governed by, and
construed in accordance with, the laws of the State of New York.
Regarding
the Trustee
If the trustee becomes a creditor of Symantec, the indenture
limits the right of the trustee to obtain payment of claims or
to realize on property received in respect of any such claim as
security or otherwise. The trustee may engage in other
transactions. If the trustee acquires any conflicting interest
and there is a default under the securities of any series for
which it serves as trustee, however, the trustee must eliminate
the conflict or resign.
PLAN OF
DISTRIBUTION
We may sell the securities (1) through underwriters or
dealers, (2) through agents
and/or
(3) directly to one or more purchasers. We may distribute
the securities from time to time in one or more transactions at:
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a fixed price or prices, which may be changed;
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market prices prevailing at the time of sale;
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prices related to the prevailing market prices; or
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negotiated prices.
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We may solicit directly offers to purchase the securities being
offered by this prospectus. We may also designate agents to
solicit offers to purchase the securities from time to time. We
will name in a prospectus supplement any agent involved in the
offer or sale of our securities.
If we utilize a dealer in the sale of the securities being
offered by this prospectus, we will sell the securities to the
dealer, as principal. The dealer may then resell the securities
to the public at varying prices to be determined by the dealer
at the time of resale.
If we utilize an underwriter in the sale of the securities being
offered by this prospectus, we will execute an underwriting
agreement with the underwriter at the time of sale and we will
provide the name of any underwriter in the prospectus supplement
that the underwriter will use to make resales of the securities
to the public. In connection with the sale of the securities,
we, or the purchasers of securities for whom the underwriter may
act as agent, may compensate the underwriter in the form of
underwriting discounts or commissions. The underwriter may sell
the securities to or through dealers, and the underwriter may
compensate those dealers in the form of discounts, concessions
or commissions.
We will provide in the applicable prospectus supplement any
compensation we pay to underwriters, dealers or agents in
connection with the offering of the securities, and any
discounts, concessions or commissions allowed by underwriters to
participating dealers. Underwriters, dealers and agents
participating in the distribution of the securities may be
deemed to be underwriters within the meaning of the Securities
Act and any discounts and commissions received by them and any
profit realized by them on resale of the debt securities may be
deemed to be underwriting discounts and commissions. We may
enter into agreements to indemnify underwriters, dealers and
agents against civil liabilities, including liabilities under
the Securities Act, or to contribute to payments they may be
required to make in respect thereof.
The securities may or may not be listed on a national securities
exchange. To facilitate the offering of securities, certain
persons participating in the offering may engage in transactions
that stabilize, maintain or otherwise affect the price of the
securities. This may include over-allotments or short sales of
the securities, which
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involves the sale by persons participating in the offering of
more securities than we sold to them. In these circumstances,
these persons would cover such over-allotments or short
positions by making purchases in the open market or by
exercising their over-allotment option. In addition, these
persons may stabilize or maintain the price of the securities by
bidding for or purchasing securities in the open market or by
imposing penalty bids, whereby selling concessions allowed to
dealers participating in the offering may be reclaimed if
securities sold by them are repurchased in connection with
stabilization transactions. The effect of these transactions may
be to stabilize or maintain the market price of the securities
at a level above that which might otherwise prevail in the open
market. These transactions may be discontinued at any time.
The underwriters, dealers and agents may engage in transactions
with us, or perform services for us, in the ordinary course of
business.
LEGAL
MATTERS
Unless otherwise specified in the prospectus supplement
accompanying this prospectus, Fenwick & West LLP,
Mountain View, California, will provide opinions regarding the
authorization and validity of the securities. Any underwriters
will also be advised about the validity of the securities and
other legal matters by Simpson Thacher & Bartlett LLP,
Palo Alto, California, or any other counsel to the underwriters
named in the applicable prospectus supplement.
EXPERTS
The consolidated financial statements and schedule of Symantec
as of April 2, 2010 and April 3, 2009, and for each of
the years in the three-year period ended April 2, 2010, and
managements assessment of the effectiveness of internal
control over financial reporting as of April 2, 2010, have
been incorporated by reference herein in reliance upon the
reports of KPMG LLP, independent registered public accounting
firm, incorporated by reference herein, upon the authority of
said firm as experts in accounting and auditing.
Such report on the consolidated financial statements as of
April 2, 2010, and for each of the years in the three-year
period ended April 2, 2010, refers to the retrospective
adoption of new accounting requirements issued by the Financial
Accounting Standards Board, which resulted in changes in the
method of accounting for convertible debt instruments that may
be settled in cash upon conversion (including partial cash
settlement) effective April 4, 2009.
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