Symantec 2008 Annual Report Download - page 37

Amendment and Termination of the 2004 Plan. Our Board may at any time terminate or amend the 2004 Plan
in any respect, including without limitation our Board may amend the non-employee director formula restricted
stock unit grants; provided,that our Board may not, without the approval of the stockholders of Symantec, amend
the 2004 Plan to increase the number of shares that may be issued under the 2004 Plan, change the designation of
employees or class of employees eligible for participation in the 2004 Plan or materially modify a provision of the
2004 Plan if the modification requires stockholder approval under rules of the NASDAQ Stock Market. In addition,
except in connection with certain corporate transactions involving the Company, including stock splits, stock
dividends, mergers, spin-offs and certain other similar transactions, the Committee may not reduce the exercise
price of (reprice) options or stock appreciation rights issued under the 2004 Plan without prior approval of
Symantec’s stockholders. Unless earlier terminated, the 2004 Plan will terminate on July 20, 2014.
Summary of Federal Income Tax Consequences of Awards Granted under the 2004 Equity Incentive Plan
The following is a general summary as of the date of this proxy statement of the U.S. federal income tax
consequences to Symantec and participants in the 2004 Plan with respect to awards granted under the 2004 Plan.
U.S. federal tax laws may change and U.S. federal, state and local tax consequences for any participant will depend
upon his or her individual circumstances.
Tax Treatment of the Participant
Incentive Stock Options. An optionee will recognize no income upon grant of an ISO and will incur no tax
upon exercise of an ISO unless for the year of exercise the optionee is subject to the alternative minimum tax
(“AMT”). If the optionee holds the shares purchased upon exercise of the ISO (the “ISO Shares”) for more than one
year after the date the ISO was exercised and for more than two years after the ISO’s grant date (the “required
holding period”), then the optionee generally will realize long-term capital gain or loss (rather than ordinary
income or loss) upon disposition of the ISO Shares. This gain or loss will equal the difference between the amount
realized upon such disposition and the amount paid for the ISO Shares upon the exercise of the ISO.
If the optionee disposes of ISO Shares prior to the expiration of the required holding period (a “disqualifying
disposition”), then gain realized upon such disposition, up to the difference between the option exercise price and
the fair market value of the ISO Shares on the date of exercise (or, if less, the amount realized on a sale of such ISO
Shares), will be treated as ordinary income. Any additional gain will be capital gain, and treated as long-term capital
gain or short-term capital gain depending upon the amount of time the ISO Shares were held by the optionee.
Alternative Minimum Tax. The difference between the exercise price and fair market value of the ISO Shares
on the date of exercise is an adjustment to income for purposes of the AMT. The AMT (imposed to the extent it
exceeds the taxpayer’s regular tax) is currently 26% of an individual taxpayer’s alternative minimum taxable
income (28% in the case of alternative minimum taxable income in excess of $175,000). Alternative minimum
taxable income is determined by adjusting regular taxable income for certain items, increasing that income by
certain tax preference items and reducing this amount by the applicable exemption amount. If a disqualifying
disposition of the ISO Shares occurs in the same calendar year as exercise of the ISO, there is no AMT adjustment
with respect to those ISO Shares. Also, upon a sale of ISO Shares that is not a disqualifying disposition, alternative
minimum taxable income is reduced in the year of sale by the excess of the fair market value of the ISO Shares at
exercise over the amount paid for the ISO Shares.
Non-Qualified Stock Options. An optionee will not recognize any taxable income at the time a NQSO is
granted. However, upon exercise of a NQSO, the optionee must include in income as compensation an amount equal
to the difference between the fair market value of the shares on the date of exercise and the optionee’s exercise price.
The included amount must be treated as ordinary income by the optionee and will be subject to income tax
withholding by Symantec if the optionee is an employee. Upon resale of the shares by the optionee, any subsequent
appreciation or depreciation in the value of the shares will be treated as long-term or short-term capital gain or loss
depending upon the amount of time the NQSO shares were held by the optionee.
Restricted Stock Units. In general, no taxable income is realized upon the grant of a restricted stock unit
award. The participant will generally include in ordinary income, which will be subject to income tax withholding
by Symantec if the participant is an employee, the fair market value of the shares of stock that are delivered to the
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